At 23:00 GMT on 31st December 2020 the UK left the EU VAT Regime, Customs Union and the Single Market. Therefore continued trade between the EU and UK will be conducted under the new Trade and Cooperation agreement.
For VAT all transactions will be IMPORTS & EXPORTS not EU transactions. For goods B2B transactions will be 0% export and import VAT under postponed accounting which will have a cashflow neutral affect. However, for goods B2C the accounting for import VAT must be done through indirect representation/fiscal representation or OSS when established.
Under the Unions Customs Code all transactions with GB will be treated as transactions with a Third Country (countries outside the EU). Under the EU-UK Trade & Cooperation agreement there are Zero Tariffs and Quotas (Rules of Origin Apply) however all movement of goods will require a Customs Declaration. All goods will require a TARIC code and businesses will need to follow all Import & Export procedures required for their goods and packaging.
As trade will now be conducted under International Chamber of Commerce Trade rules all contracts must be revised to include Incoterms. This will clarify the Obligations, Risks & Costs involved in the movement of goods.
Transport, Hauliers must now ensure that the relevant Insurances, Licences and permits are in place for transport outside of the EU. They must adhere to the guidelines in the agreement.
See attached summary guidelines
