The consequences of Brexit on VAT and customs for French companies

Brexit has radically affected procedures, especially concerning VAT on imports, and importers must follow customs clearance requirements and submit their specific customs declaration to the UK customs administration.

From January 1 2021, the UK-EU Trade and Cooperation Agreement requires that all deals with the UK are subject to a customs declaration and are checked at the border. Indeed, the goods are subject on the one hand to VAT on imports and on the other hand to customs duties.

The trade agreement also makes sure that there will be no customs duty and no quota for goods traded as long as the products originally come from the European Union and vice versa.

Recovery of VAT on imports: Originally, a liable company in France that is exporting goods to the United Kingdom, and not registered for VAT in the United Kingdom, could request a refund of import VAT according to EU regulations. From now on this VAT is recovered through the 13th directive applicable to all countries outside the EU.

It is possible for businesses that import and are registered for English VAT to account for VAT on imports in their VAT return instead of paying directly to customs.

To conclude, Brexit has added an administrative complexity to the exchanges of good between France and the United Kingdom.

 

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