Pointers for Importers.
Over the recent months you will have read in the media that changes are afoot for importers to the EU from 1 January 2021. Customs Declaration Forms will be necessitated for all imports from the EU. However, the submission of Customs Declaration Forms may be deferred for up to six months through the duty deferment account and guarantee waiver.
Most small importers will be eligible, unless you have a poor previous track record with HMRC. The advantage of this is being able to defer payment of your import VAT & duty, by up to 175 days. Using this process, your goods will generally be cleared by Customs for release quicker.
In order to apply for a duty deferment account guarantee waiver approval, you must have a UK Economic Operators Registration & Identification Number (EORI Number). It can take up to a week to receive your EORI number.
If you are already registered for VAT in the UK, you will automatically be assigned an EORI number by HMRC if you were VAT registered prior to 24 November 2020.After this date you will need to apply separately for your EORI number.
Using the Postponed Accounting Regime, you can account for import VAT on your VAT return. This avoids the need to pay the import VAT at the port of entry and, be able to offset it on your VAT return. It provides the same outcome but most importantly improves your short term cash flow position as no physical payment is required.
A guarantee waiver means that you will not require a bank to guarantee the amount of debt that could arise through duty payments. Any applications for waivers under £10,000do not require a PFS1 form, unlike a larger waiver which does. Even though Customs Declaration Forms may be delayed, it’s essential that full import records be kept.
The HMRC Customs Freight Simplified Procedures and Entry in Declarants Records (CFSP EIDR) will run until July2021. Controlled goods however, such as tobacco, chemicals and alcohol will require a full declaration at importation date. CFSP EIDR allows goods, once they have reached the border, to be released using a simplified frontier declaration (SFD).
EIDR allows importers to use a simplified data set through their own personal electronic commercial records. There is a minimum requirement list of data you need to keep in order to maintain your own EIDR records.
The final import clearance process is completed with a Supplementary Import Declaration (SID) submitted at anytime up to 175 days after the goods have been imported into Great Britain from the EU.
We hope this short update will help provide importers, and potential importers, with a way of protecting your cashflow in these extremely turbulent times.