Introduction
Customs, VAT and Excise update
David Vallely
HM Revenue & Customs
The Border Operating Model webinar gathered on 23 September 2020 over 600 business, government, and industry stakeholders from across Europe.
Officials from the UK’s Border and Protocol Delivery Group presented on border controls to be implemented at the end of the transition period in three stages up until 1 July 2021.
The event was part of the DIT ‘Keep Business Moving’ campaign, ensuring EU businesses can continue trading smoothly with the UK at the end of the year.
More info at www.gov.uk/eubusiness
More useful links
These slides do not cover movements in relation to the Northern Ireland Protocol. The business guidance is available at
www.gov.uk/government/publications/moving-goods-under-the-northern-ireland-protocol
The UK Border Operating Model was published on 13 July 2020 – the full document is available at www.gov.uk/government/publications/the-border-operating-model
The International Chambers of Commerce publish standard trading terms and conditions available at
www.iccwbo.org/resources-for-business/incoterms-rules/incoterms-2020/
Get an EORI number at www.gov.uk/eori
Further details on being UK established can be found on
www.gov.uk/guidance/check-if-youre-established-in-the-uk-or-eu-for-customs
Customs, VAT and Excise update. Further details on customs can be found on
www.gov.uk/topic/business-tax/import-export
How to import goods from the EU into GB from January 2021:
assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/910155/How_to_import_goods_from_the_EU_into_GB_from_January_2021.pdf
How to export goods from GB into the EU from January 2021:
assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/910156/How_to_export_goods_from_GB_into_the_EU_from_January_2021.pdf
Using the UKCA mark from 1 January 2021
www.gov.uk/guidance/using-the-ukca-mark-from-1-january-2021
Content
First of all thanks all, uh for joining today and I'll give you a brief, uh, customs update that kind of covers the uh, the import and export declaration requirements, uh as well as a brief overview of uh of the goods, vehicle movement service, um, that will be in places as the uk.
Exits eu.
At the end of the year.
Um, I also have my colleague, john meller, um, who will also help me cover off a few of the bits? Uh today.
So, firstly, um we'll, look at, um, an overarching, uh bit of what's of what's going to be happening.
So for movements between gb and the eu and we'll be introducing border controls at the end of the transverse transition period in stages as margaret's already alluded to.
And that started with some controls from the 1st of january 2021 and moving for to full controls for all goods from july, the 1st 2021.
So those are two kind of key dates, um.
So first of all, uh from from january 2021, um, most traders will be able to defer submitting information and payment of customers duties to hmrc for up to six months.
Uh from the date of the import and traders involved in controlled goods, such as excise goods will be expected to follow standard customs requirements and the requirements of safety and security regulations on import or ens, uh, these will be waived for for six months on imports as margaret's again, already, uh, alluded to, um.
And the uk.
Will be joining the the common transit convention in its own right and will be subject to the the full requirements of this as moving to that in in stages.
Um won't be applicable as it's an international agreement.
Um, what I'll do now is I'll go through initially, the import requirements from uh, january 2021, uh.
And then do the exports.
And then my colleague, joel will take you through what will be required, um from july so moving on quickly.
So yeah, um.
So with regards to imports and import declaration requirements from january 2021 to july, uh, traders, bringing goods from the eu to tv will need to declare their goods to customs and goods.
Goods must be declared in advance of crossing if moving through a listed roll on roll-off ports or location without an existing system.
However, what we have done to to facilitate this and facilitate that readiness is that traders moving non-controlled goods to gb will be able to declare their their goods by making entry in their own records, uh, also known as eidr entrance in declarance records, um.
And what is required of that is listed on gov.ek as well as it's part of cfsp, uh, customs rate, simplified procedures as a pre-existing, um way of of making declarations, um.
But then businesses would be required to keep keep a record of those imports.
And then submit that information via supplementary declaration within six months of that import and pay those required duties via an approved duty, deferment account it's worth saying at that point that it is a a rolling six months so it's, not that all those declarations made between, uh, january and july have to be made in one one.
Here, it's case of if you bring something in january, you have six months equally, if you brought stuff in in june, you'd have six months in june, um, but worth being uh, clear on that.
Um, however, there is an exception to this so traders, moving controlled goods, such as excise goods, we'll need to make a a frontier declaration, um goods.
And as again, margaret mentioned about the border operating model, there is an annex that describes what we mean when we say, uh, controlled goods.
And there is a list of those.
And that declaration on on the controlled goods can be either a full or simplified declaration.
And that depends on the the authorizations of that trader, um or equally, a trader, could you choose to use transit? Um, if they're good to come in if those controlled goods again are coming through a location without a system that would allow the trader to notify hmrc that the goods have been imported.
The trader would need to manually arrive that declaration in hmrc systems.
And if it's excise goods that would include, um, the excise movement and control system or emcs as it's known.
And that would all need to be done by the the end, the following day after the physical crossing of the goods, and so just very quick to recap what we won't be requiring.
So it will be requiring, um traders to submit safety and security declarations for imports for that six months or requiring carriers to submit entry, summary, declarations, um and there's, a range of reasons for implementing those controls, um, for example, uh, keeping the uk.
Borders, safe and secure collecting the right, customs v80 and excise duties and make sure that all the uh exports and imports will be treated equally.
And and with all of this stuff there is there is more at detailed dot.
Uk.
So just to recap very quickly on that standard goods, uh can be declared into your own records with a supplementary declaration after six months, controlled goods will need to be declared, um.
And then there won't be any need for sns decorations for uh for six months.
And so what I'll do now is I will move on to exports from january.
So uh.
So on exports, um declaration.
And the requirements are on the declarations of these from from january 2021 again, to july 2012 and traders exporting goods from gb into eu, will need to submit export declarations, but for all goods and traders will be required to submit safety and security information.
And this can be done via a combined export declaration or a loan excerpt summary declaration.
And again, if the goods aren't moving via, uh, or if the goods are moving via a non-inventory, linked location, the customs declaration will need to be submitted as arrived while the goods are still at the trader's premises.
And then hmrc will notify the trade automatically of whether those goods have the permission to progress, or if they do need to be taken to a facility to be checked.
And if the goods are moving through a location with an existing inventory system, uh, the standard rest of world export model and will be followed, which should be uh familiar to those trading with the rest of the world and for exercise goods or goods, moving under duty, suspense, only if moving the goods through a location that does have a system to automatically.
So it does not have a system to automatically communicate to hmrc that the goods have left the country.
The trader would need to uh to provide proof hmrc that those those goods have indeed left and and exited the uk.
Um, if you're exporting goods by post, um for more information on that, please go to gov.uk and just like before with regards to impulse further details and exporting can also be found on gov dot.
Uk.
And what I will do now is, I shall ask to my colleague, joel who will now cover, um, the detail for uh from july.
So over to joel.
FAQs
What is the VAT adjustment on a customs entry? ›
However, VAT would need to be added on any incidental expenditure between the port of entry and the point of delivery. This mechanism, known as Vat Value Adjustment, is a very old approach from when operators in and around ports were not VAT registered and therefore unable to charge VAT on their services.
What is VAT for customs? ›VAT varies by country, but it is generally between 7 and 20 percent of the value of the merchandise. For imports, VAT is based on the customs value of your goods. The United States does not currently charge a VAT tax on imports, but you will likely have to pay this tax if you import goods into the European Union.
How to avoid customs charges from USA to Greece? ›There is no way to avoid customs duties, customs officers will check all items entering the country and charges will be applied where necessary. If you simply put 'gift' on the customs invoice, this does not mean it will not attract duty as they will still check the value of what is in the box.
How can I avoid customs charges from USA to UK? ›How can you avoid customs duty in the UK? Unfortunately, there's no real way to avoid customs taxes on goods coming into the UK from the USA if they're due. What you have to pay – and how much – depends on the goods, whether their value comes under or above the threshold, and what you intend to do with them.
What is the VAT adjustment and why is it charged? ›The VAT adjustment can be used to adjust the amount of input VAT being claimed on shared expenses. There are different methods that can be used to calculate the proportion of VAT that can be claimed on certain expenses so if you have any queries you should always consult a professional.
Is VAT refund connected to U.S. customs? ›the United States does not participate in the VAT tax refund, and U.S. Customs and Border Protection officers are not mandated to stamp VAT tax forms.
How much is import VAT from USA? ›The amount of import tax and duties to be paid depends on the country from which the goods are imported. Duty tax rates are between 0 to 37.5% with the typical rate being 5.63%. A flat rate of 3% applies to e-commerce purchases that are in excess of the US import tax threshold limits.
Who pays VAT on goods? ›VAT is ultimately paid by their customers, but it is the business' responsibility to pay this to HMRC. Businesses can usually reclaim VAT paid on business related purchases, known as input tax. Some items are not eligible for VAT reclaims.
Who pays the VAT on importation? ›Value-Added Tax (VAT) is payable at point of importation into the State. Imported goods are liable to VAT at the same rate as applies to similar goods sold within the State. For example, goods which are zero-rated on sale within the State are zero-rated at importation.
Should I bring US dollars to Greece? ›Greece uses the euro as its currency, and businesses only accept Euros for payment. It's a good idea to carry some Greece currency for cash transactions, especially in remote areas. The best way to get euros in Greece is via an ATM or to exchange American dollars for euros before arriving.
Do I have to pay customs from USA to Europe? ›
If you import goods, you have to pay customs duties and VAT (value-added tax). If you import to a Member State of the European Union, the customs rates in your destination country are the same as in the whole EU. However, it should be noted that the VAT rate differs.
Do I have to pay customs for package from USA to Greece? ›Almost all shipments crossing international borders are subject to duty and tax assessment, with customs officials basing this on information provided on the commercial invoice and other relevant documents, such as bank payment receipts.
Do I have to pay VAT from USA to UK? ›Importing goods from the US to the UK
If you're importing goods from the USA, there's no requirement for VAT-registered businesses to account for VAT. If you're importing something from the US, the US sales tax will not be added, but rather, the UK tax rate (usually 20%) will be paid upon import.
You go through customs after your flight, once it lands in the UK, but that doesn't mean you don't need to prepare earlier. When going through customs at an airport, you need to figure out what steps you need to take while still on the plane.
How much customs will I pay from USA to UK? ›Value Added Tax (VAT) also needs to be paid on anything being imported into the UK from the USA. This is calculated on top of import duties and is at the same rate if you had bought the items in the UK – 20%. Importantly, it also includes the door-to-port cost of shipping the items to the UK.
How can I avoid charging VAT? ›You cannot charge VAT on exempt goods or services. If you buy or sell an exempt item you should still record the transaction in your general business accounts. VAT exempt goods and services include: financial services, investments and insurance.
Is VAT charged to US customers? ›No, the United States has no VAT. The federal government raises money primarily through the income tax system. The states and local governments establish and collect their own sales taxes.
Is VAT charged on everything? ›VAT is charged on things like: goods and services (a service is anything other than supplying goods) hiring or loaning goods to someone. selling business assets.
Do tourists get VAT refund? ›Yes. The goods must accompany you when you leave the EU. You cannot buy VAT-free goods if for any reason, you cannot or do not wish to take the goods with you when leaving the EU. Moreover, you have to be ready to demonstrate those goods to the customs officer who will stamp your VAT refund form.
Do I have to declare purses at customs? ›You must declare all items you purchased and are carrying with you upon return to the United States, including gifts for other people as well as items you bought for yourself. This includes duty-free items purchased in foreign countries, as well as any merchandise you intend to sell or use in your business.
How much goods can you bring back to US? ›
Mailing and Shipping Goods - Customs Duty Guidance
Up to $1,600 in goods will be duty-free under your personal exemption if the merchandise is from an IP. Up to $800 in goods will be duty-free if it is from a CBI or Andean country. Any additional amount, up to $1,000, in goods will be dutiable at a flat rate (3%).
Is there VAT in the U.S.? There is no VAT in the United States. But even though the United States doesn't have a value-added tax, it does require consumers to pay federal excise taxes on the purchase of gasoline, alcohol, tobacco and other products.
What is the customs limit in the US? ›Depending on the countries you have visited, your personal exemption will be $200, $800, or $1,600. There are limits on the number of alcoholic beverages, cigarettes, cigars, and other tobacco products you may include in your duty-free personal exemption.
How much customs duty will I pay? ›Duty rates vary from 0 to 37.5 percent, with a typical duty rate about 5.63 percent. Some goods are not subject to duty (e.g. some electronic products, or original paintings and antiques over 100 years old). The United States has signed Free Trade Agreements (FTAs) with a number of countries.
What items are exempt from VAT? ›- Education and training.
- Insurance, finance and credit.
- Fundraising events by charities.
- Medical treatments provided by hospitals.
- Subscriptions to membership organisations.
- Selling, leasing and letting of commercial land and buildings — though authorities can waive this exemption.
Certain goods and services are exempt from VAT. This means that they are not subject to VAT, and therefore do not incur the standard 20% VAT charge. Examples of exempt goods and services include insurance, education, and health services.
What are the 3 types of VAT? ›- standard rate.
- reduced rate.
- second reduced rate.
- zero rate.
- livestock rate.
VAT calculation example
If the products or services are subject to the 20% standard rate of VAT: You must add 20% to the price you charge for the goods or service. You can do this by multiplying the price you charge by 1.2.
Here's how: Vatable Sales = Total Sales/ 1.12. VAT = Vatable Sales x 1.12.
Who are subject to VAT? ›VAT is imposed upon any person who, in the course of trade or business, sells, barters, exchanges, leases goods or properties, and renders services, and any person who imports goods as provided under Section 105 of the National Internal Revenue Code, as amended.
How much is $1 US in Greece? ›
| USD | GRD |
|---|---|
| 1 USD | 312.369 GRD |
| 5 USD | 1,561.84 GRD |
| 10 USD | 3,123.69 GRD |
| 25 USD | 7,809.22 GRD |
Whenever you tip during your trip to Greece it is important to use the local currency, that is - Euros. Otherwise you'll leave your service providers with cash they can't use without paying high fees on currency exchange.
Can I use my American credit card in Greece? ›Credit cards from major card companies like VISA, Mastercard, and American Express are generally always accepted in Greece.
Do US citizens have to go through customs? ›If you are a U.S. citizen planning to travel abroad, you must comply with the document requirements for that country. For a list of Foreign Consular Offices in the U.S. visit the U.S. Department of State website. Each individual arriving into the United States must complete the CBP Declaration Form 6059B.
Does customs check every international package? ›Does customs check every package? The short answer is yes. Customs checks all inbound international packages and mail. During this process, a customs officer in the country you're shipping to will review the package to make sure it meets the country's laws, regulations and policies.
Do I go through customs when leaving us? ›You'll go through customs and immigration both ways on an international trip—when you arrive in the foreign country you're visiting, and again when you return to your home country from abroad.
How much is import tax from US to Greece? ›The Tax Free Threshold Is 0 EUR
The import tax charged on a shipment will be 24% on the full value of your items.
- 200 cigarettes, 100 cigarillos, 50 cigars, or 250g of tobacco.
- 2 liters of still table wine.
- 1 liter of spirits or strong liqueurs over 22% volume or 2 liters of fortified wine, sparkling wine or other liqueurs.
- 60ml of perfume.
- 250ml of tap water.
Greece's standard VAT rate is 24%. Some goods and services are subject to a reduced VAT rate of 13% and 6%. There are also preferential rates applicable for the islands of Chios, Kos, Leros, Lesbos, and Samos which are 17%, 9%, and 4%. Some services, including health and medical services, are VAT exempt.
Do US citizens get VAT back in UK? ›You may be able to get a VAT refund if you're only traveling to Great Britain in order to change planes. You must be travelling to a non EU country and the goods must be in your hold luggage at all times. Check the rules on bringing goods into Great Britain.
What does USA use instead of VAT? ›
The U.S. is one of the few countries that does not charge VAT or GST. Instead, the U.S. uses state sales tax as its method of taxation.
How do I bypass customs charges? ›Tell the seller explicitly that the item is for personal use. Import duties typically apply to items imported for commercial use (business or resale)—not personal or retail sales. If you're importing something for your own personal use or as a gift for someone else, you don't have to pay them.
What do American citizens need to enter the UK? ›Your identity document (for example your passport or identity card) will be checked when you arrive at a UK port or airport to make sure you're allowed to come into the country. It should be valid for the whole of your stay. You may also need a visa to come into or travel through the UK, depending on your nationality.
Do Americans go through customs in London? ›If your baggage is checked through to your final destination, that's where you clear customs. If you're collecting your baggage and checking in to your next flight yourself, you need to pass through customs at Heathrow.
What countries have US customs preclearance? ›Today, CBP has more than 600 officers and agriculture specialists stationed at 15 Preclearance locations in 6 countries: Dublin and Shannon in Ireland; Aruba; Bermuda; Abu Dhabi in the United Arab Emirates; Nassau in the Bahamas; and Calgary, Toronto, Edmonton, Halifax, Montreal, Ottawa, Vancouver, Victoria, and ...
How do I avoid customs fees UK? ›- samples.
- professional equipment.
- items for auction.
- exhibition goods.
- demonstration goods.
How do the rules work for imports? Since 1 January 2021, the rules for the import of goods from outside the UK are now essentially the same, regardless of whether the goods originate in an EU or non-EU country. Travellers are allowed to bring in up to £390 worth of goods without paying customs duty.
How do I pay customs duty UK? ›You'll be contacted by Royal Mail, Parcelforce or the courier company if you need to pay any VAT , duty or delivery charges ('handling fees') to receive your goods. They'll send you a bill stating exactly which fees you need to pay. They'll normally hold your parcel for about 3 weeks.
Is VAT different from customs duty? ›Value-added tax (VAT) is a type of consumption tax separate from a customs duty, of special importance in the European Union (EU). It is applied to imported and domestic products and services.
How do I adjust a VAT return? ›You can calculate the net value of errors by subtracting any VAT you've overpaid from any VAT you've underpaid. If your mistake meets these criteria, then you can amend them in your next VAT return by adding the net value to Box 1 (tax owed to HMRC) or Box 4 (tax due to your business) of your VAT return.
How do you calculate customs value? ›
On the basis of customs value, import duty for customs clearance of goods is determined. For instance, if your shipment has 10 items and the value of each item is US$ 20, then the customs value of your goods would be US$ 200.
What is customs tax refund? ›U.S. Customs and Border Protection (CBP) offers the opportunity to receive refunds, resulting from overpayment of Customs duties, taxes, and fees, electronically through Automated Clearinghouse (ACH). If you sign up for ACH Refund, your refund will automatically be deposited directly into your bank account.
Do I have to pay VAT on goods from USA? ›VAT and Customs Duty Tax when shipping from the USA
As the USA is not a member of the EU, a customs duty may apply on top of a 20% VAT payment. VAT and duty amounts are dependant on the mode of transport used to import the goods, the goods themselves as well as the country of origin.
In such cases, VAT is charged and due in the EU country where the goods are consumed by the final consumer. Likewise, VAT is charged on services at the time they are carried out in each EU country. VAT isn't charged on exports of goods to countries outside the EU.
How much is customs duty in USA? ›How much are the US import tax and duties? The amount of import tax and duties to be paid depends on the country from which the goods are imported. Duty tax rates are between 0 to 37.5% with the typical rate being 5.63%.
What is the time limit for VAT adjustments? ›Corrections of under and overclaims of past input tax will always be included on a VAT return. The relevant time period for input tax adjustments is the last six years, which is different to the four-year period that applies to adjusting past errors on returns.
What is the correction period for VAT? ›4 years from the due date of the return for the prescribed accounting period in which the error occurred in respect of under-claimed input tax.
What is the time limit for VAT corrections? ›The general time limit within which errors can be corrected is four years from the end of the prescribed accounting period in which the error occurred, VAEC7410 provides further guidance on time limits.
What is the rule 3 of customs valuation rules? ›Further, Rule 3(3) provides that where buyer and seller are related, the transaction value can be accepted if the examination of circumstances of the sale of the imported goods indicate that the relationship did not influence the price or if the importer demonstrates that the declared value of the goods being valued, ...
What are the 6 methods of customs valuation? ›- Method one – transaction value. ...
- Method two – transaction value of identical goods (“identical goods method”) ...
- Method three – transaction value of similar goods (“similar goods method”) ...
- Method four – deductive value. ...
- Method five – computed value. ...
- Method six – residual basis of valuation.
What is the rule 7 of customs valuation? ›
(6) “the imported goods being valued” means the goods being valued for customs purposes. (7) “identical goods” means goods which are the same in all respects, including physical characteristics, quality and reputation.
Which countries have VAT refunds? ›Tax-free shopping is currently available in the following countries: Argentina, Armenia, Australia, Austria, Azerbaijan, Belgium, Bulgaria, China, Colombia, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Guernsey, Greece, Hungary, Iceland, Indonesia, Ireland, Israel, Italy, Japan, Korea, ...
How do I get a VAT refund in Europe? ›To qualify for a VAT refund, your purchases should be more than a certain amount. This also differs from one EU country to the next, but in the majority of cases you must spend at least that amount in a particular location. If the minimum, for example, is 100 EUR, you can not spend 10 EUR at 10 different locations.
How is VAT refund calculated? ›For a 19% VAT rate, it will be (Price-Price/1.19)*0.91=your refund and so on. Want to know how much you are paying for the item? Take off the price the refund amount, and that's it. Better yet, use Refundit's calculator here.