1. EU-VIETNAM FTA
The EU-Vietnam Free Trade and Investment Agreements come into effect from the 1 st August 2020. The final text was agreed on the 18 June 2020 after the Vietnam’s National Assembly ratified the European Union Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investment Protection Agreement (EVIPA) 10 days earlier. The European Parliament had given consent to both Agreements on 12 February 2020 and the Free Trade Agreement was concluded by European Council on 30 March 2020. Once in force, the EU-Vietnam Trade Agreement will use the REX (Registered Exporter) system for declaring preferential origin. Though the trade agreement on goods comes into force from 1 st August 2020 the benefits will be staggered over a period of 15 years with may imports into the EU still incurring customs duties at the start of the trade agreement.
2. UK CUSTOMS AND TRADE LAWS 1-01-2021
A reminder that as things stand from 1st January 2021 new UK Customs laws will replace the current EU legislation for customs and international trade. The key Act is the Taxation (Cross-border Trade) Act 2018 which will replace the EU Union Customs Code (UCC). Below are some of the main regulations drafted in 2018/2019, to become UK law Statutory Instruments in 3 main areas, Customs, VAT and Excise have been prepared to support these regulations
- UK Taxation (Cross-border Trade) Act 2018
- The Customs (Import Duty) (EU Exit) Regulations 2018
- The Customs (Reliefs from a liability to Import Duty) (EU Exit) Regulations 2019
- The Taxation (Cross-border Trade) (Miscellaneous Provisions) (EU Exit) Regulations 2019
- The Cash Controls (Amendment) (EU Exit) Regulations 2019
- The Customs (Export) (EU Exit) Regulations 2019
- The Customs (Record Keeping) (EU Exit) Regulations 2019
- The Customs (Import Duty) (EU Exit) Regulations 2018
- The Customs (Special Procedures and Outward Processing) (EU Exit) Regulations 2018
- The Customs Transit Procedure (EU Exit) Regulations 2018
- The Taxation (Cross-border Trade) Act 2018
- The Customs Tariff (Preferential Trade Agreement) (EU Exit) Regulations 2019
- The Customs Transit Procedure (EU Exit) Regulations 2018
3. UK TRADE AGREEMENTS
The UK has left the EU. The Withdrawal Agreement sets out how the UK can continue to be covered by EU – 3 rd -country trade agreements until 31 December 2020. On this basis, EU trade agreements continue to apply to the UK but after 31 st December 2020 EU trade agreement will not apply to the UK. To ensure continuity of trading arrangements for UK businesses, the UK is seeking to reproduce the effects of existing EU agreements. On 29th June 2020, The Department for International Trade (DIT) provided information on the UK trade agreements that should be available from 1 st January 2021.
Other agreements are under discussion though trade agreement discussions with countries in
Customs Unions with the EU (Andorra, San Marino, and Turkey) will be influenced by the agreement the UK reaches with the EU. The UK has also signed Mutual Recognition Agreements (MRA) and discussing new trade agreements with Australia, New Zealand, and the USA.
4. UK DIT & DFID TO MERGE
16 June 2020, the UK Prime Minister announced that the Department for International Developments (DFID) and the Foreign and Commonwealth Office (FCO) will be merged into a new department. Work has started on the merger and the newly created Foreign, Commonwealth and Development Office (FCDO) will be established in early September 2020 led by the Foreign
Secretary. The Prime Minister said that the UK’s Trade Commissioners will come under the
authority of UK Ambassadors overseas. Speculation that the Government is proposing to integrate
the Department of International Trade (DIT) into the new Foreign, Development and Commonwealth Office has been denied though it was confirmed that there would be some alignment on the network of trade envoys. The objectives of the new overseas department will be shaped by the outcome of the Integrated Review, which is expected to conclude in the autumn, and is the biggest review of foreign, defence and development policy since the Cold War
5. DIGITAL SERVICES TAX (DST)
Countries across the world are rapidly extending Value Added Tax (VAT) and Goods and Services Tax (GST) indirect taxes to the sale of electronic / digital services by online providers and platforms to consumers. (B2C) The definition of e-services varies between jurisdictions, but typically includes income for the sale of: streaming media and games; e-books; software; apps; web hosting and other cloud services; subscriptions to membership websites; online newspapers and journals; and online gambling. It can also include broadcast (TV and radio) or satellite services, as well as online voice and data telephony services.
In response to the growth of these taxes, the United States Trade Representative (USTR) announced the initiation of a Section 301 investigation into digital services taxes (“DST”) to focus on the taxes being introduced or discussed in the EU Member States, Brazil, China, India, Indonesia, Mexico (where it applies to B2B and B2C), Philippines, Turkey, UK and many other countries.
6. EU EXIT READINESS BRIEFINGS/ QA:
OneCall Briefings covering EU Exit Readiness which will run every 2 weeks until the end of the year. They are practical, inactive and question driven, not just going through slides – questions sent to us in advance will form the basis of each session but there is time for you to ask questions during each briefing to the S&H panel of expert practitioners. So, though all briefings will be around EU Exit each session will be different. The sessions are FREE for S&H Onecall or Business Support members.
The Briefings are free and run for 1 hour from 4pm to 5pm BST. You can book your free slot on the
Briefing by clicking on the date you require below, we are monitoring the number of attendees so
you have time to ask specific questions and speak with our advisors, who will be on the call to assist as well as provide a brief summary at the start of each session. If you cannot attend a session as a S&H OneCall/BSP member you will see all key points covered in each session the next Members’ DYK updates and most of the questions will be posted on the FAQ page on our website. The briefing will continue throughout the year but below are the next 8 scheduled sessions:
1. Wednesday 15th July 2020: OneCall Briefing 4pm to 5pm (fully booked)
2. Thursday 30th July 2020: OneCall Briefing 4pm to 5pm
3. Thursday 13th August: OneCall Briefing 4pm to 5pm
4. Thursday 27th August 2020: OneCall Briefing 4pm to 5pm
5. Thursday 10th September 2020: OneCall Briefing 4pm to 5pm
6. Wednesday 23rd September 2020: OneCall Briefing 4pm to 5pm
7. Thursday 9th October 2020: OneCall Briefing 4pm to 5pm
8. Wednesday 22nd October 2020: OneCall Briefing 4pm to 5pm
You can also send you questions in advance to Brexit Briefings and we will address your questions
during the session you have booked or get back to you if you cannot attend the sessions. Please be
aware that we may not have all the answers right away, but S&H are involved in numerous customs committees and relevant trade meetings to pose your questions to the relevant departments. We need to work together to ensure we understand how the exit will work from 1st January 2021, how trade between GB-NI-IE will remain “unfettered” and ensure your challenges and concerns are flagged to the authorities. We look forward to seeing you at one of our Briefings.
7. FAQ FROM ONECALL BRIEFING 1-07-2020
A full list of FAQ will be published on our website and in the members’ area but here is a sample of
the questions addressed during the first EU Exit Readiness Briefing
Q1. What are the import easements the UK intends to introduce next year?
A1. The current easements proposed by the HMRC is that you will not have to complete full
declarations on arrival at ports/ ferry ports until 6 months after the 1 st January 2021 if you can use CFSP. The easements are only for goods that are non-controlled so if the goods are non-controlled you will be able to declare the goods by making an entry into your own records, otherwise known as EIDR, but note that you will be need to submit a supplementary declaration within the 6 months, this can be done by either yourselves or by a Customs Clearance Agent. If you are importing controlled goods, for example excise products you will need to make a frontier declaration so that is a declaration at the arrival of port, this can be a full, simplified or transit declaration and that is depending on your authorisation. Under the easement process for non-controlled goods, note that the haulier or your trucking company or your agent will also need to have the declarant EORI number to hand so this can be on the shipping paperwork, invoices, packing lists whichever is best suited to your business, this will enable the driver to provide this information to border force if the haulier is stopped for inspection at the arrival port so if the haulier arrives at the arrival port and is stopped for inspection, he must be able to provide UK Border Force with the declarant EORI number so again going over that, the current easements proposed by the HMRC the full declarations will not need to be submitted for 6 months for July up until January 2021.
Q2. Along with the EORI number on the documents are there any other information that must
be on the invoice for instance tariff code country of origin should they be on there it is something we are wanting the suppliers to do, we just want to make sure that we are asking them for everything that will be required.
A2. It would be exactly the same as an non-EU arrival so it would be the full description of the
product, the invoice value and obviously the exporter, the importer is yourselves and obviously now given the easements that your EORI number will have to be on the invoice as well or be on the
packing list for the haulier to be able to show that reference number.
Q3. Will there be duty to pay at arrival or later so this is to do with the easements when will duty
has to be paid?
A3. Duty will have to be paid under the easements when you do your full supplementary
declaration within the 6 months’ time frame so there will be duty to be paid on controlled goods so
controlled goods would need to be a full declaration at the port of arrival so let’s say Dover for
example , supplementary entry can be raised by yourselves or by your agent and this is when the
duty will be accounted for, I have got a note here which is, however there is no reason at present
why you cannot make a full declaration at the arrival point of non-controlled goods , it is entirely up to you if you want to go with the easements, if you want to or do a full declaration at the port of
arrival you can do, there is no reason why not.
Q4. It is my belief that importers have to apply to HMRC to use postponed vat accounting, is that
still the case or is it now freely available to everybody?
A4. As far as we are aware postponed accounting is going to be made available to all vat
registered importers, so I am not aware of having to apply for it in fact if you think about it there are that many VAT registered importers in the United Kingdom that I think customs would be making a rod for their own back if they had some sort of registration process so as far as I am aware there is a system on CHIEF already so for those of you who are familiar with CHIEF you will know about the famous tax lines Box 47 and the method of payment you simply use the code for postponed accounting so at the moment if you use code F for deferred payment or you use code D for flexible accounting system then come the 1 st of January you will use code G for George to indicate postponed accounting.
Q5. Will we still have to submit Intrastat reports for exports and imports?
A5. We are awaiting confirmation from Intrastat Trade Stats policy on this, but we do know that
regarding Intrastat, the policy, so HMRCs fiscal office has the policy for Intrastat will continue
through 2021. This will be applicable for all companies that are currently authorised to complete
Intrastat returns so if you import goods to the value of £1.5 million and you export goods over
£250,000 then you have to continue to submit Intrastat reports regardless of the fact that you may
complete a full declarations from January 1 st or use the import easements.