Brexit: UK Trader Scheme to support movement of goods between Britain and Northern Ireland

The UK Trader Scheme (UKTS) has now been launched to support businesses moving goods between Great Britain and Northern Ireland after the Brexit transition period ends. Here’s what you need to know:

What is the UK Trader Scheme?

Simply put, the UKTS will ensure that UK traders do not pay international tariffs on the movement of goods into Northern Ireland where those goods “remain in the UK’s customs territory”.

When transporting goods between countries, authorised traders will self-declare that there is “no risk” of the goods entering the EU via the Republic of Ireland or otherwise. More information about the UKTS and “at risk” goods can be found here.

When does the scheme come into effect?

Immediately after the Brexit transition period ends, so 01 January 2021.

Who can sign up to the scheme?

The scheme is open to traders of all sizes and industries who operate under the Northern Ireland Protocol (NIP). Traders must also meet several “basic requirements” and show that they can “accurately declare and evidence whether goods are ‘at risk’ or not”.

How can I register?

Businesses can apply for UKTS authorisation from this week. If you choose not to sign up, businesses may have to pay tariffs on their goods. Click here to start the registration process.

Brexit trade deal negotiations continue as businesses warned to prepare for a ‘no deal’ scenario

Sunday’s deadline for reaching a post-Brexit trade deal between the UK and EU came and went as both sides committed to continue negotiating ahead of the end of the Brexit transition period at 11pm UK time on 31 December 2020.

The decision to keep negotiations open appears to have been driven by progress on tariffs, suggesting a deal may still be possible.

By default, Governments place tariffs on items being brought into their countries to protect local suppliers from advantages firms overseas might gain from factors such as state subsidies, lighter regulation or lower labour costs.

A trade deal will usually involve reducing tariffs, limiting them to specific circumstances or scrapping them entirely by creating other mechanisms to ensure businesses on one side of the deal do not have an unfair competitive advantage over those on the other side.

This is the ‘level playing field’ that negotiators are trying to agree on and could take the form of guaranteed minimum standards of regulation on anything from workers’ rights to animal welfare.

While the logic of a ‘level playing field’ is straightforward, the task of actually creating one that takes into account multiple advanced economies and all sorts of sector-specific issues is hugely complicated, which is why such negotiations usually take many years.

Added to the mix, as a consequence of the UK’s withdrawal from the EU earlier this year, is the challenge of creating a ‘level playing field’ that continues to function effectively over time while both sides retain political independence from each other. News reports suggest that this is one of the trickiest issues that negotiators must now overcome to reach a deal.

Ultimately, any trade deal involves balancing tariff-free access to markets against the need to implement measures to create a ‘level playing field’.

In reaching the best possible deal for their own side, negotiators need to make the other side believe that they are willing to walk away without a deal, which may in part explain some of the pessimistic statements from both sides about the possibility of a deal.

However, this does not explain all of the pessimism and a ‘no-deal’ Brexit may even be probable. Given the complexity of this trade-off and the short time remaining to achieve a deal that meets the requirements of all the EU’s member states and the UK, there is a significant possibility that negotiators will not reach a deal in time to be ratified by 31 December 2020.

In that scenario, instead of level playing field measures, tariffs – some of which will increase costs several times over – will apply to goods being moved between the UK and EU and vice versa.

If your business trades with the EU and you have not prepared for a no-deal Brexit, you should take action immediately to ensure that you can continue to trade if talks break down in the coming days.

To find out more about preparing for a no-deal scenario, please visit the Brexit pages on our website today.

VAT under the Northern Ireland Protocol

Under the newly agreed Northern Ireland Protocol, the Value Added Tax Act (1994) will be amended so that Northern Ireland maintains alignment with the EU VAT rules for goods.

This means that the rules for intra-EU movements of goods that currently apply, will continue to apply after the end of the transition period on 31 December 2020, which includes current EU rules on distance selling and acquisition VAT.

This should ensure that VAT will be accounted for by businesses and individuals in a similar way as it is today so that minimal disruption is caused.

In addition to this, according to Government documents, the updated Protocol will:

  • Specify the VAT liable on goods moving between Great Britain and Northern Ireland and allow HMRC Commissioners to determine with whom the liability lies.
  • Minimise, as far as possible, changes to VAT business processes when goods are moved between Great Britain and Northern Ireland while remaining within the parameters of EU law as applied to NI.
  • Protect VAT revenues and ensure the efficient flow of goods between Great Britain and Northern Ireland.

This measure does not cover the provision of services to or from Northern Ireland, as services are not in the scope of the Protocol.

Acquiring an XI number 

In preparation for the changes to VAT, businesses that trade with Northern Ireland will need to obtain ‘XI’ VAT and EORI numbers before 1 January 2021. These are to be used on invoices, statistical reporting and customs documents to help HMRC and the EU with transactions where:

  • Goods are located in Northern Ireland at the time of sale;
  • Goods are supplied in Northern Ireland by VAT-registered EU businesses; or
  • There is a sale or movement of goods from Northern Ireland to the EU.

If businesses are involved in any of these transactions, they must notify HMRC so that they can be provided with their XI number.

If a business is already using the Government’s free Trader Support Service, which assists with moving goods into Northern Ireland they may already have been given this number, which they must retain and use.

The VAT treatment of goods – The basics 

For Northern Irish business to business trade with Great Britain, goods moving between Ireland and Northern Ireland between established traders will continue to be treated as movements across internal EU borders. This means they remain intracommunity VAT zero-rated transactions.

Business to consumer sales between Northern Ireland and Ireland will still also be subject to the distance selling threshold rules and subject to the VAT rate of the consumer’s country of residence.

However, from 1 July 2021, under the EU e-commerce package, distance selling thresholds will be scrapped and Northern Irish businesses will be able to use a single VAT return instead via the One-Stop-Shop.

Any business to business goods moving between Great Britain and Northern Ireland will be treated as domestic UK VAT supplies.

EU VAT recovery

Under the unique arrangements of the Protocol, Northern Irish businesses will continue to benefit from continued access to the EU 8th Directive VAT reclaims electronic portal.

This allows for easy reclaiming of EU VAT incurred on travel, entertainment, travel, promotion and advertising expenses incurred in any EU member state.

In comparison, businesses based in Great Britain will have to use a paper-based country-by-country reclaim process after 31 December 2020.

Here to help

The rules around VAT and the Northern Ireland Protocol are complex. While this article touches upon many of the rules, it is important that you seek advice before the end of the transition period to ensure you and your business are prepared.

Northern Ireland customs duty arrangements confirmed

The Government has confirmed further details of the customs duty arrangements that will apply to Northern Ireland with the publication of the Taxation (Post-transition Period) Bill.

The Bill enacts several of the arrangements contained in the Northern Ireland Protocol, a critical element of the Withdrawal Agreement that is designed to prevent the introduction of a “hard” border between Northern Ireland and the Republic of Ireland following the end of the Brexit transition period on 31 December 2020.

The new arrangements, which are currently before Parliament, mean that no duty will be due on goods:

  • imported into Northern Ireland from the EU; or
  • moved from Great Britain to Northern Ireland that are not deemed “at risk” of then being moved into the EU.

However, duty will be chargeable on goods:

  • moved into Northern Ireland from Great Britain and which are deemed “at risk” of being moved into the EU or which are non-domestic goods;
  • moved from Northern Ireland to Great Britain that are not Qualifying Northern Ireland Goods;
  • moved from Northern Ireland to Great Britain that are Qualifying Northern Ireland Goods but which have been moved for the purpose of avoiding customs duties; and
  • goods from the rest of the world imported into Northern Ireland.

Qualifying Northern Ireland Goods are defined in legislation as those that are “processed” in Northern Ireland or which are present in Northern Ireland and “not subject to any customs supervision, restriction or control”.

Meanwhile, the Treasury will make regulations setting out which goods are deemed “at risk” of being moved into the EU. However, the Chancellor of the Duchy of Lancaster, Michael Gove, has confirmed that this will not include goods intended for selling to consumers or for use in Northern Ireland.

The actual duties that will be levied will depend on whether a trade deal is reached between the UK and the EU before the end of the Brexit transition period on 31 December and on the detail of any deal.

Crucially, the measures mean that declarations will be required from businesses moving goods from Great Britain into Northern Ireland. If you move goods into Northern Ireland, you should complete the following steps urgently:

  1. Sign up for the Government’s free Trader Support Service

This free-to-use service is available to businesses of any size moving goods into Northern Ireland, providing guidance, training, a digital declaration support service and support from customs experts.

Sign-up here.

  1. Obtain an EORI number beginning with XI

Economic Operators Registration and Identification (EORI) numbers are standard identification codes used across the EU in customs procedures. Many UK businesses trading with EU countries before Brexit will not have needed an EORI number because the UK was also a member of the EU.

Following the end of the transition period, businesses in Great Britain must have a 12-digit EORI number beginning with ‘GB’ to export to or import from the EU.

However, to move goods in and out of Northern Ireland, businesses must have EORI numbers beginning with “XI”.

If you do not have an EORI number, you must apply for an EORI number beginning with GB as soon as possible here. You will then be able to obtain an EORI number beginning with XI.

Businesses in Great Britain that move goods in and out of Northern Ireland and export to or import from the EU will need “GB” and “XI” EORI numbers.

For more information about moving goods into Northern Ireland after the end of the Brexit transition period, please contact us.

Government launches new export finance guarantee scheme

The Government has launched a new export finance guarantee scheme, targeted at SME exporters.

The General Export Facility scheme will provide an 80 per cent Government guarantee on financial support of up to “around £25 million” from lenders to support the general costs of exporting.

To be eligible, a business must certify that at least 20 per cent of its annual turnover has been from exports in any one of its last three financial years, or that at least five per cent of its annual turnover has been from exports in each of its last three financial years.

Businesses must also meet several other criteria, including having premises and employees in the UK and pay Corporation Tax or National Insurance in the UK (or the Isle of Man of Channel Islands).

The must also manufacture goods, deliver services or produce intangibles from the UK, which would qualify for a UK Chambers of Commerce Certificate of Origin.

Additionally, businesses applying for the scheme must not solely supply goods manufactured outside the UK or services provided by a person who ordinarily carries on business outside the UK.

Businesses will be able to access the scheme directly through HSBC, Lloyds Bank. Natwest, Santander and Barclays, with other lenders expected to be added in ‘due course’.

The guarantee will be provided automatically for facilities of up to £5 million that are approved by the lender. UK Export Finance approval will be required for larger facilities.

The finance available through the scheme including trade loans, bonds, letter of credit lines, Cap Ex and invoice financing, with maximum repayment terms of up to five years.

Unlike previous export support schemes, the new scheme is not tied to individual export contracts and can be used to fund general costs linked to exports and scaling up operations, including fulfilling multiple export contracts, labour costs, building inventories and easing cash flow constraints.

Graham Stuart, the Minister for Exports, said: “UKEF’s support for smaller businesses is shifting up a gear. The new General Export Facility will make a huge difference for entrepreneurs who need the financial backing to go global and benefit from our free trade agreements. It will help us bring genuine optimism back to exporters.

“We were the only top ten exporting nation to grow exports last year. I’m determined for that success to continue as we recover from Covid-19. By transforming access to the world’s best export credit agency, we can unlock the entrepreneurial energy needed to make that a reality.”

Stephen Pegge, Managing Director of UK Finance, said: “Supporting British exporters at this time is vital, which is why UK Finance and five of the main export lenders have been working closely with UKEF on the development of this new guarantee scheme.

“We expect business to apply from the new year as the General Export Facility enables lenders to support an even wider range of small and medium-sized firms, giving businesses the confidence to win new contracts by having an agreed revolving facility in place.”

Businesses requiring support worth more than £25 million should contact their local UK Export Finance Export Finance Manager.

How can your business prepare for customs and VAT after Brexit?

We are now less than one month away until the UK officially leaves the European Union. For businesses, this means new processes, protocols and procedures.

In this blog, we are going to explore how your business can approach just two of these issues: customs and VAT.

Here’s what you need to know.


After the UK leaves the EU on 31 December 2020, the Government will be free to impose its own customs and VAT regimes.

Until now, the UK and the EU have shared the same customs and VAT schemes, which made moving goods between the UK and the EU seamless and simple.

However, there are now a set of actions your business must do if it is to continue trading smoothly and avoid disruption. This includes:

  • Hiring or training a customs intermediary to complete and submit declarations
  • Applying for a duty deferment account, enabling duties to be paid once a month rather than on individual consignments
  • Preparing to pay or account for VAT on imported goods
  • Ensuring you have International Driving Permits, and
  • Applying for a GB Economic Operator Registration and Identification (EORI) number.

If you are a business who imports or exports products overseas, you may be entitled to grant funding to cover the cost of recruiting, training and adapting your business to the new demands of global trade. For more information, get in touch with our expert team.


While most UK businesses will be able to rely on specialist customs intermediaries to process goods, VAT will likely prove more difficult.

The VAT rules around importing and exporting goods to and from the single market will change after the end of the transition period. This includes when and where VAT should be accounted for.

Although VAT will now be payable on import on goods from every country (including the EU), the Government will introduce a new “postponed VAT” accounting regime to help businesses avoid cash flow issues. This scheme will enable you to account for VAT on imported goods on your next VAT return and goods can be released from customs without the need for immediate payment.

For help and advice on related matters, please get in touch with our expert team today.

UK launches points-based post-Brexit immigration system

The UK’s new points-based immigration is now live to help businesses as they prepare for the end of the Brexit transition period on 31 December 2020.

The new system outlines who can work in the UK once the free movement agreement with the EU ends on 1 January 2021.

There are several new Immigration categories under the new system, which include routes for international students and graduates, skilled workers with job offers and highly skilled experts without job offers.

The new system applies to all individuals who intend to work in the UK, whether an EU citizen or other foreign national. Applications for skilled worker visas will be judged based on a points system, which is similar to existing systems that operate in countries like Australia.

Under the skilled worker route, points are awarded for various factors, such as having a job offer at the appropriate skill level in an eligible occupation, knowledge of English and a salary threshold, which will typically be at least £25,600.

Where the applicant’s salary is below £25,600 but above £20,480, they may be able to rely on an exception to make an application.

The cost of applying for a visa will be between £610 to £1,408 and applicants must be able to demonstrate that they have sufficient means to support themselves.

Employers looking to recruit under the new system will need to obtain a sponsor licence to be able to employ individuals from outside the UK.

At the same time, applications have also opened for the Global Talent, Innovator and Start-Up visas designed to attract people with exceptional talent and expertise, particularly in the fields of arts and culture, engineering, science, technology and culture. New rules for international students also came into force from October 2020.

The new visa system does not apply to EU citizens already living in the UK by 31 December. Instead, they should apply to the EU Settlement Scheme. They have until 30 June 2021 to acquire either settled or pre-settled status.

EU citizens that are successfully accepted into the EU Settlement Scheme will be able to continue living and working in the UK.

The new rules do not apply to Irish citizens, who do not need to apply to the scheme or apply for a visa come to the UK, as the UK and Ireland are both a part of the Common Travel Area.

Full details of the new visa and immigration system, including the application process, can be found by clicking here.

Business Secretary writes to professional services sector ahead of end of Brexit transition period

The Business Secretary has written to the professional and business services sector warning them about the actions they need to take to prepare for the end of the Brexit transition period.

With just a month to go, the letter, titled Are You Ready For New Rules For Business With The EU, sets out the key steps businesses in industries such as financial services and legal need to take ahead of the transition deadline.

According to the Business Secretary Alok Sharma, businesses can avoid interruption when the transition period ends on 1 January 2021 by taking the following actions:

  • Get your professional qualifications recognised by EU regulators to be able to practice or service clients in the EU. Professionals should start this process early to avoid disruption.
  • Check if a visa or work permit is required to travel to the EU for work purposes and apply if necessary. You may face delays or refusal at the border should you travel without the correct documentation.
  • Be prepared on data protection and data transfers. Should the UK fail the EU data adequacy test, UK businesses will need to invest in additional data safeguards to process data from the EU.
  • If you are planning to recruit from overseas from 1 January 2021, you will need to register as a licensed visa sponsor. UK businesses cannot legally hire people from outside the UK without one.

Writing to businesses, Mr Sharma said: “There is just over a month to go until the end of the transition period and there will be new rules to follow from 1 January 2021 onwards. As Business Secretary, I urge you to act now to avoid your business operations being interrupted when the transition period ends.

“These are challenging times, but the transition period is ending on 31 December 2020 and there will be no extension. Unless you take action, there is a risk your business operations will be interrupted. The Government will be there to help you to take advantage of the many new opportunities that being an independent trading nation will bring.”

For help and advice on related matters, please get in touch with our expert Brexit advisory team today.

Access to European Union VAT refund system to end on 31 March 2021, HMRC confirms

HM Revenue & Customs (HMRC) has confirmed that access to the European Union VAT refund system for expenses incurred before 01 January 2021 will cease on 31 March 2021.

After this date, UK businesses wishing to claim a VAT refund will have to do so manually through the relevant member state’s VAT system.

Any expenses incurred after the Brexit transition period will also need to be reclaimed using the process for the EU member state where you’re claiming a refund.

For EU businesses not registered for VAT in the UK, the UK will continue to accept refund claims through the EU VAT refund system for VAT charged in the UK before 01 January 2021 until 31 March 2021.

Any claims after this date, or claims for expenses incurred after the Brexit transition period ends, should be filed using the manual process for businesses outside the UK.

To quickly find information about each European member state’s tax refund protocols, please click here.

For help and advice on related matters, please get in touch with our expert VAT support team today.