The following are answers to some pertinent Brexit questions arising for businesses.

Question:

A beef farmer in the Republic of Ireland (ROI) who sends cattle for slaughter to factory in Northern Ireland (NI). The final chilled product is destined for the UK retail market

1) What does the farmer need to do from a customs perspective in order to move cattle in 2021 to the factory in NI?

Trade with NI will be the same post-1 January 2021 as it is today. No customs or health checks or documentation required.

2) From a customs perspective, what does the NI beef processor have to do in order to sell final product to UK retailers?

As part of the NI protocol, NI will operate the rules of the EU’s Single Market and Customs Union. The British government has promised NI traders “unfettered access” to the GB market for qualifying goods.

The UK draft EU (exit) regulations provide a full definition of a qualifying NI good. In summary, the definition of qualifying NI goods is described as follows:

  • Any good that is present in NI (and not subject to any customs supervision, restriction or control which does not arise from the goods being taken out of the territory of NI or the EU);
  • Any good that has undergone processing operations in NI incorporating either domestic goods or goods not under customs supervision, restriction or control at the time of processing.
  • Consequently, a meat processor in NI should be able to sell their finished product to GB, as currently is the case. UK government guidance currently states that for qualifying goods:

  • No import customs declarations for goods entering the UK from NI.
  • No safety and security declarations.
  • No tariffs applied.
  • No customs checks.
  • No new regulatory checks.
  • No additional approvals required for placing goods on the market in the rest of the UK.
  • The EU has indicated it will require an exit declaration on goods leaving NI for GB. However, clarity is still needed in this regard from the joint committee.

    We would also recommend that NI businesses sign up for the UK Trader Support System, as it is specifically designed to assist NI businesses trading with the UK.

    Question:

    What will the customs and VAT implications be for importing farm machinery (for example tractor) from Britain to Ireland?

    The UK vendor would normally act as the exporter of record (EoR). It would be very difficult for an Irish entity with no establishment in the UK to act as the EoR from the UK.

    Depending on the delivery terms, the Irish customer may have to act as the importer of record (IoR), as the UK company with no establishment in the EU will find it difficult to fulfil this function.

    The IoR must have an EU/Irish EORI number.

    The IoR will be responsible for managing all the paperwork to be lodged with the Irish authorities.

    Therefore, assuming the IoR will use the services of a customs agent, they must provide the agent with the appropriate commodity code for the tractor and valuation for the goods being imported.

    Revenue will want to see an invoice as proof of the value of the goods.

    All vehicles, including tractors, that are brought into Ireland are subject to vehicle registration tax (VRT).

    At a high level, from 1 January 2021 when an Irish VAT-registered entity purchases a tractor in the UK, UK VAT at 0% should be charged where the supplier exports the tractor from the UK to the Irish customer in Ireland.

    Note - you would need to be VAT registered in the UK if purchasing on an ex-works basis.

    Irish import VAT will be payable in Ireland (VAT will likely be postponed to the Irish VAT return and will be accounted for on the reverse charge basis).

    Carol Lynch will be joining the upcoming Irish Farmers Journal Brexit webinar in December and will be able to answer any further questions.

    Speak to a member of our BDO Brexit Taskforce who can provide practical Brexit advice for your business.

    Carol Lynch

    Partner Customs & Intl. Trade

    +353 1 4700 491

    Ciara Dillon

    Director Food/Drink & Agri-Business

    +353 1 4700 375

    David Savage

    Manager Customs & Intl. Trade

    +353 1 4700 371

    Or visit us online at www.BDO.ie

    Alternatively

    Declaron is the new specialist customs clearance service launched by BDO and Fexco.

    Do you need a customs clearance agent?

    Visit www.declaron.ie