UK Import Border changes

News release from HMG

News released from HMG late yesterday confirmed that the UK import border will be in place with no easements by 1 Jan 2021 https://www.gov.uk/government/news/government-confirms-plans-to-introduce-import-controls

UK Import border changes are a change of direction.  Deputy PM Gove held a meeting with heads of trade associations to tell them HMG policy is to have a “hard” import border.  No special arrangements, easements or special processes for EU trade until an electronic border can be made ready in 2025.  Schemes announced in 2019 have been shelved (e.g. TSP/postponed VAT accounting).

Key Points

• No easements or simplifications for 1 Jan 2021.Neither TSP or postponed VAT schemes previous announced will be activated.
• Customs import security decs required in addition to full import declarations from 1 Jan 2021.
• EU shipments will be processed in same way as rest of world today using routine border clearance procedures. Prepare now.
• Business must now get ready for full import process into UK on 1 Jan 2021, don’t expect simplifications.
• Grant scheme (training etc) extended to 2021

Change of Direction

To date the UK side of the border with EU had been less problematic. HMRC had made their policy prioritising trade flow over regulation. HMG view now is there is 10 months to get ready so no easements are needed, get ready ! These decisions are now the choice of the UK government. They are choosing to enforce routine rules at the borders rather than allow importers a free hand. UK traders have now been put on notice to prepare for the change of direction.

Import VAT

In conclusion,  no change this year however for EU trade this is confirmation full import clearance will be the reality on 1 Jan 2021.  From 1 Jan 2021  you need to plan for import declarations from the EU and Import VAT for EU origin shipments is now back in play,

VAT will be treated as it is today for rest of the world  i.e. payable at import which could be a cash flow impact.