After Brexit, all UK companies exporting goods to the EU need to comply with new rules. The UK government has issued recommendations for UK businesses to follow, in order to help minimize interruptions in the trade between UK and EU companies and facilitate the transition process for both sides.
In this article, we’ll look into the details of the government’s recommendations.
Steps to follow if you’re exporting goods from the UK into the EU
If you’re a UK company exporting to the EU, you need to follow these steps:
- Obtain an EORI number. EORI is short for Economic Operators' Registration and Identification and serves as an identification number when dealing with customs administrations in the EU.
- Get the relevant export certificates or licenses, if you need any. Some goods, such as fresh produce, might require certification. Controlled products are also subject to additional certification and licensing procedures.
- Keep track of all export transactions. You need to store detailed records of all exports for the next 6 years. You might need these records to claim refunds or provide them to the authorities upon request.
- Consider working with a customs agent. Exports and imports might be quite complex for small businesses to tackle independently. Consider working with a qualified customs intermediary who can help you comply with all regulations and follow the correct procedures.
Many businesses work with a customs intermediary to assist them with the export of goods. If you have prior experience with exports and imports to other countries before Brexit, you might be able to navigate the changes on your own. It might still be a good idea to consider consulting with a specialist to make sure you understand the relevant procedures and are able to comply with all regulations.
Besides that, you also need to ensure that you’re complying with EU tax regulations, and charging and remitting VAT correctly.
VAT compliance for companies exporting to the EU
If you’re exporting goods to other countries, including EU member states, you don’t have to remit VAT in the UK. You need, however, to complete your VAT registration in the countries in which you’re selling, if you’re selling to end customers (B2C transactions).
On July 1, 2021, the EU will introduce a new VAT package, which will affect both online marketplaces and sellers alike. After that date, you’ll be able to register in a single country and use the OSS (One-Stop-Shop) scheme to declare and pay taxes, including the VAT that you’re collecting. For B2C transactions, it will either be your responsibility or the responsibility of the marketplace (that is facilitating the sale) to charge VAT, depending on the value of the goods. If the goods have a value of under €150, the marketplace will need to collect VAT and remit it; otherwise, it’ll be the seller’s responsibility.
Besides that, if you’re able to comply with the rules of origin requirements for the goods that you’re exporting to the EU, you might be able to benefit from preferential customs fees or zero-tariff exports.
Here Is Where Fonoa Tax Comes In Handy
At Fonoa, we have developed a platform that allows digital service providers to meet their tax compliance obligations across the world in a plug-and-play manner. With our Lookup tool, you can automatically or manually validate tax numbers from your customers and suppliers in different countries.
Our tax engine easily integrates with your existing systems (API) and automatically calculates the correct amount of tax you need to charge your customers, anywhere in the world. And with our invoice generator, your transactions will always be accompanied by a locally compliant tax invoice to your customers. In their language, in your house style.
Reach out to us and we will help you handle your tax obligations.