HMRC has recently sent letters to VAT-registered businesses trading with the EU and/or the rest of the world highlighting actions they need to take before the end of the transition period.
Different letters have been sent to businesses based in Great Britain and Northern Ireland.
These letters confirm that there will be no changes to the terms for trading with the EU or the rest of the world during the transitional period, unless the rules change for the whole of the EU. This means EU rules for customs, VAT and excise will continue to apply to the movement of goods and trade up to 31 December 2020.
From 1 January 2021, the way that UK businesses trade with the EU will change, and they will need to prepare for life outside the EU, including new customs arrangements. For example, for trade between Great Britain (GB) and the EU, businesses will need to make customs declarations to import and export goods once the UK is outside of the EU’s customs territory.
HMRC undertakes to provide more information and guidance during the implementation period as the negotiations progress. Businesses can keep up to date with these changes by registering for HMRC’s email updates.