HMRC have issued a Brexit Special version of their regular Agent Update. We have summarised the key content for you with links to our detailed guidance on the topics covered.

HMRC Brexit communications resources

An Economic Operator Registration and Identification (EORI) number is a unique ID for businesses trading goods. To help businesses get ready for Brexit, HMRC have published an EORI myth buster which corrects some misunderstandings about EORI numbers.

Grants for businesses completing customs declarations

£16m in new government funding is now available to help businesses train staff in making customs declarations, and to help businesses who support others who trade goods to invest in IT.

Businesses based in or with a branch in the UK can apply for grant funding ahead of the UK leaving the EU to support:

  • training costs for businesses who complete customs declarations, or who will do in the future.
  • IT improvements; this is available to small and medium sized employers who are currently involved in trade as an intermediary.

More information about grants can be found here

Changes for UK employers sending workers to the EU, the EEA or Switzerland

If the UK leaves the EU without an agreement, there may be changes for UK employers who have people working in the EU, EEA or Switzerland.

  • Currently the EU Social Security Coordination Regulations ensure employers and their workers only need to pay social security contributions (such as NIC) in one country at a time.
  • If we leave without a deal, this coordination between the UK and the EU will end; employees working in the EU, EEA or Switzerland may need to make social security contributions in both the UK and the country in which they are working.

Businesses should do the following to prepare:

  • If your employee is working in the EU, EEA or Switzerland and has a UK-issued A1/E101 form, they will continue to pay UK NIC for the duration of the time shown on the form.
  • If the end date on the form goes past Brexit day, you will need to contact the relevant EU /EEA or Swiss authority to confirm whether or not your employee needs to start paying social security contributions in that country from that date.
  • If your employee is a UK or Irish national working in Ireland, their position will not change after Brexit and you, as their employer, won’t need to take any action.
  • A replacement for the A1/E101 form will be issued for new applications after Brexit.

The Government is seeking reciprocal arrangements with the EU or Member States to maintain existing social security coordination for a transitional period until 31 December 2020 so that individuals affected will only pay social security contributions in one country at a time.

Register for Transitional Simplified Procedures

If businesses import, HMRC recommends they register for easy import procedures known as Transitional Simplified Procedures (TSP).

  • If you are new to customs processes, this likely to be the best option for you.
  • TSP will provide extra time to send in customs documentation and pay import duties when you import goods from the EU to the UK.
  • Not everyone is eligible; businesses need to check online first to see if they can register.

New ways to declare Merchandise in Baggage

  • If you or your clients will travel to or from EU countries after Brexit and will carry small amounts of goods for trade or business use in your baggage or small vehicle you must declare them as ‘merchandise in baggage’ (MiB).
  • To find out more about when you need to declare MiB, visit GOV.UK.

VAT IT system changes for businesses outside the UK

Checking UK VAT numbers:

  • Businesses will be able to use the UK’s VAT checking service to check the validity of a UK VAT number. They will no longer be able to use the EU’s VAT number validation service.

Paying VAT on sales of digital services provided to UK consumers:

  • Businesses will not be able to use the VAT Mini One Stop Shop (MOSS) to report and pay VAT on sales of digital services to consumers in the UK.
  • They must register and pay VAT in the UK as soon as they supply services to a UK consumer.
  • They must use HMRC’s VAT correction process to correct a UK VAT figure submitted in a previous MOSS return. See Errors: VAT how to correct

Claims for VAT on business expenses before Brexit:

Claims for VAT on business expenses before Brexit can be made using the EU VAT refund electronic system; businesses should allow enough time for their member states to send the claim to the UK.

  • If a claim is sent through the online system after Brexit, it will not reach the UK.

Claims for VAT on business expenses after Brexit:

Businesses will no longer be able to use the EU VAT refund electronic system to claim refunds of VAT incurred in the UK. They must follow the processes for businesses outside the UK.

More information for businesses on Brexit:

HMRC is running a series of webinars to help businesses get ready for Brexit. Register online here.

HMRC alert service: HMRC will continue to provide the latest guidance to help you prepare your business for Brexit. You can stay up-to-date by signing up for HMRC’s Brexit alert service.

External links:

Agent Update: Brexit special

HMRC Brexit communications