Bill Miller: With less than a month to go, are you Brexit ready?

InsightFeatures Fri 4th Dec 2020 by KBBFocus

Bill Miller: With less than a month to go, are you Brexit ready?

Bill Miller: With less than a month to go, are you Brexit ready?

The countdown has started, but there's no need to panic – Kitchen Bathroom Buying Group MD Bill Miller reveals what you can do now to get your paperwork straight and your business ready for Brexit. 

Kitchen retailers – are you Brexit ready?
With Brexit now only a matter of a few weeks away, is your business fully prepared? There remains a huge amount of uncertainty around what will happen on the 1st January 2021, but here’s what we do know. The European kitchen furniture suppliers will be responsible for completing the export paperwork prior to the goods leaving their factories. If you purchase your kitchens direct from a European supplier and pay in Euros, then you are more than likely going to be considered as the ‘importer’ by HMRC, and this has significant implications. 

If there is a ‘no deal’ Brexit, then the free movement of goods from the EU to the UK ends and it will be necessary for a UK business that imports goods from the EU to register for an EORI number, make a customs declaration for each order and pay duty and VAT on each delivery. What is less clear is what happens in the event of a deal being done with the EU. It is unlikely, even in the event of a deal, that the free movement of goods will continue as it does now and a simplified customs declaration will still probably have to be made. This customs declaration must be made on the HMRC’s own online system; however this system is not readily available to UK businesses, so the recommendation is to use a Customs Agent who can do this for you. As for the customs duty, kitchen furniture is classed as receiving a 2.7% tariff, payable to the HMRC. This can be paid immediately or deferred for a period. Retailers need to apply for a 'Duty Deferment Account' and may also need a bank guarantee. 

As a UK VAT registered business, you will be able to account for import VAT on your VAT returns for both goods imported from the EU and anywhere else in the world. This will be done by declaring and recovering import VAT on the same VAT return, without the need to pay the VAT at the time of import. This is commonly referred to as ‘postponed accounting’ and offers simplification and cash flow advantages compared to the current rules for imports from outside of the EU. 

So, what do you need to do now? My recommendation is if you have not already done so, apply for an EORI number, which you can do via this link on the Government website. Speak to your suppliers to understand what their plans are from 1st January, as some suppliers may delay making deliveries to the UK in January, or may insist on confirmation that the declarations have been made prior to dispatching goods. Importantly, register with a UK Customs Agent. Find out what information they are going to need from you in order to complete the declaration and VAT payment on your behalf. Understand the additional costs you are going to incur in duty and agents’ fees etc. The important thing is do not delay, Brexit is going to happen, and you are going to be responsible, like it or not, for importing goods into the UK. If you do nothing, then there is a strong possibility you will not be able to receive your kitchen delivery and you will incur unexpected additional costs. Remember – you have been warned! 

The KBBG is the UK arm of Der Kreis – Europe’s biggest kitchen and bathroom buying group. With over 3,500 members in nine countries, Der Kreis offers independent retailers enhanced buying conditions from leading suppliers, as well as access to unique private label kitchen furniture ranges.

Tags: features, insight, bill miller, kbbg, der kreis

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