As we move closer towards the end of the transition period and negotiations continue, we anticipate that updates and guidance will start to come out at pace.
Over the last week, the UK Government has released more information on the future of UK REACH, the UK's chemical regulatory framework. We have also seen several updates on how business will be done between Great Britain and Northern Ireland (NI), related to EORI numbers and VAT.
As further developments are made and guidance comes out to help businesses prepare for 1 January 2021, ADS will keep members updated through these bulletins, blogs and the ADS Brexit Hub.
Our next webinar will take place on Wednesday 18 November at 1.30pm and it will look at the requirements for defence exports when the transition period ends. In addition, you can view the Q&A from our previous webinar on the Border Operating Model and Guidance on Importing and Exporting on our website.
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Negotiations between the UK and EU over their future relationship after the transition period are continuing this week in London.
After two weeks of intensified discussions concluded this weekend, negotiators on both sides reflected on progress made but outlined that differences in positions remain. Boris Johnson said that the "outlines" of an agreement were clear and a deal was "there to be done", while EU Commission President Ursula von der Leyen said "large differences" remained over fisheries, environmental and employment regulations, and state aid.
The tone surrounding the talks had been cautiously optimistic over the past few weeks with little evidence of leaks from discussions, suggesting that the substantive issues were being worked through. However, the political rhetoric has recently increased in volume following a lack of progress on these issues.
In terms of timescales, the next ten days is the broadly accepted period for a final deal to be struck in time, as both the European and UK Parliaments are required to vote on any agreement.
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News on EORI numbers - if you trade with Northern Ireland
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One of the key steps businesses in the UK can take to help prepare for new trading arrangements with the EU has been to secure an EORI number in the UK that starts with the letters ‘GB’.
The latest guidance for businesses who move goods to or from Northern Ireland now states that businesses may need an EORI number starting with ‘XI’ (for NI) from 1 January 2021.
Businesses will need an XI EORI in order to move goods between NI and non-EU countries, make a declaration in NI, and to get a customs decision in NI.
How to get an XI EORI:
- Businesses must already have an EORI number that starts with GB – register for one here.
- HMRC will automatically send XI EORI numbers to businesses they think need one from mid-December 2020.
- Sign up to the Trade Support Service before 23 November 2020 and HMRC will send you an XI EORI if you need one.
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Accounting for VAT on goods moving between GB and Northern Ireland from 1 January 2021
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The Northern Ireland Protocol means Northern Ireland will maintain alignment with the EU VAT rules for goods and the movement of goods. However, NI will remain part of the UK’s VAT system, meaning HMRC will still be responsible for the operation of VAT and the collection of revenues in NI. Those already VAT registered will continue to charge customers VAT as per regular invoicing. Sellers who are charged VAT may be able to reclaim VAT as input VAT, subject to the normal rules.
Under the Protocol, import VAT will be due on goods entering NI from Great Britain and broadly the reverse is also true. Businesses moving their own goods from NI to Great Britain will not be required to account for VAT. Further information is available on gov.uk.
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THE BACKGROUND
The UK Government will implement a new domestic chemicals registration regime at the end of the transition period. This will largely replicate the existing EU REACH regime and will be called ‘UK REACH’. This new regime will apply regardless of the outcome of negotiations.
Great Britain-based manufacturers, importers and downstream users of chemicals over one tonne per year will need to ensure they register these substances with the UK REACH system from 1 January 2021. Companies in Northern Ireland will continue to operate in the EU REACH regime, as per the arrangements set out in the NI Protocol.
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ACTIONS FOR BUSINESSES TO TAKE
In an effort to minimise initial cost and disruption to industry, the UK Government will transfer existing registrations held by UK companies on the EU REACH system to the new UK REACH system without a fee.
There will be then two steps for businesses to take:
- Within 120 days, UK companies with EU registrations will have to notify the Health and Safety Executive (HSE) and provide basic data such as company name, company details, substances registered, quantities produced and evidence of their existing ECHA registration.
- Within two years of the 300 day deadline (28 October 2021), a full information package to support the registration will be required, depending on tonnage band.
If you are importing chemicals from the European Economic Area (EEA) then there is a slightly different notification timeline:
- Within 300 days, companies would be required to notify the HSE of the substances they import from the EEA, including basic information about the substance and its safe use.
- Within two years of the 300 day deadline (28th October 2021), a full information package to support the registration would be required, depending on tonnage band.
For full guidance and regular updates visit the HSE website.
For further information and guidance visit the ADS Brexit Hub.
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Wednesday 18 November | 13:30
In this webinar, the Export Control Joint Unit (ECJU) at the Department for International Trade will outline the scope of Export Controls before detailing what will change as a result of leaving the EU. Expect the ECJU to cover export licenses, the unique circumstances for NI-GB trade, trade sanctions and the proactive steps members should take to ensure they are correctly registered and able to continue exporting.
BOOK NOW
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Listen again to our most recent webinar where we heard from DEFRA to explain the new system for chemical regulations in detail, outlining what action businesses need to take, and by when, to ensure they can continue to import, produce and use chemicals in the UK after we have left the EU's REACH regime.
LISTEN TO RECORDING
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