Do you import from or export to the EU? If yes, then you may need to make some changes to your processes. What things do you need to think about?
From 1st January 2021 import declarations will have to be completed for all shipments from the EU to Great Britain and duties may have to be paid. HM Government have provided a document laying out the steps for how to import goods from the EU into GB. You can view a copy of this document here.
There are other points to consider, such as:
From 1st January 2021 all goods moving between UK and EU will require a customs declaration which should be submitted electronically using the National Export System. If you’re going to do this yourself rather than appointing an agent, you’ll need to register for the National Export System. You may make a full declaration which must be made before the goods arrive at the port of export, or you may be using the simplified declaration procedures.
HM Government have also provided a document laying out the steps for how to export goods from GB into the EU. You can view a copy of this document here.
There are other points to consider, such as:
Some of our customers already store goods that they import from outside the UK in customs warehouses – and defer the Customs Duty and import VAT that is due until they remove the goods and put them into 'free circulation'.
Other customers already use third party Customs/Compliance tools from vendors like Ricardo, BlueJay and Britannia.
We’ve delivered projects for customers to support both scenarios and would be happy to execute a project to help you do the same. In doing so we will use some of our nHanced products (nHanced Consignments) together with custom code that we can reuse to accelerate the process.
You will need to start thinking about changing your VAT Posting Setup and your VAT Statement. These changes must be in place for Purchase Invoices posted with a date on or after 1st January 2021.
VBPG = VAT Business Posting Group (From Customer or Vendor card)
VPPG = VAT Product Posting Group (From Item card or G/L Account)
These notes should be read in conjunction with the Excel Spreadsheet of VAT Statements - click here to access.
NOTE: The suggestions below are based on the assumption that you should only report the Base value and VAT amounts of non-UK Purchases as provided in the HMRC monthly statements. Other configurations and changes to your setups can also achieve the desired result.
NB: When you run the calc & post VAT statement in test mode you will notice the total will not match box 5 as it normally does, this will be out by the PVA (Postponed VAT Accounting). When carrying out the calc & post this will close all VAT entries and credit the Postponed VAT Account and debit the VAT liability/settlement account.
OR for any businesses who need more time to close December's activities
Any businesses with VAT Reporting Quarter ending on 31st January 2021 or 28th February 2021 will need to report EU VAT under current scheme and new scheme from January. To support this combined scheme reporting a new VAT Business Posting Group for EU and 2 new VAT Statement (interim & permanent) are required. Briefly these are explained as follows:
New VAT Posting Setup
Interim VAT Statement - to be used for the straddling quarter ONLY
This will include both:
New Permanent VAT Statement - to be used from first full quarter in 2021
This statement will include new EUROPE VAT setup only
Data Changes
The following data needs to be updated:
Need more time to close December’s Activities?
The above solution is also advised for any businesses that report VAT on a monthly basis or have their VAT quarter ending on 31st December 2020 but need to continue processing December’s activities into January simultaneously with January’s activities. However, there is no need for the Interim VAT Statement.