The Brexit Centre

Brexit FAQ (Jan 2021)

Brexit is the name given the process by which Great Britain and Northern Ireland voted to leave the European Union. A national UK referendum on the 23rd June 2016 resulted in the people of the UK voting by a majority to leave the customs and regulatory union it joined on the 1st January 1973.

Following the Vote in 2016 the UK Government commenced a process of negotiating an Exit Treaty with the European Union. As of the 31st January 2020 Britain ceased to officially be a member of the European Union. From that time the UK had been in a “transition period” meaning by and large its trading arrangements with the EU remained in place. The transition period ended at 11.00pm GMT on the 31st December 2020. Following lengthy negotiations commencing in 2016 a treaty was agreed on the 29th December 2020.

The core principle of the exit treaty means that customs tariffs will not be charged on goods coming from and going to the UK market. There is to be added administration on hauliers, exporters and importers. Crossing the UK land bridge to Ireland will be more complex. Customs Declarations need to be filed in respect of goods being exported to the UK. In addition companies using the UK as a land bridge to the EU will also need to lodge an Exit Summary Declaration (EXS) with the UK Authorities within certain time limits. 

Some measures have been introduced to ease the administration. The French government has introduced a “smart port” at Calais meaning the administration can now be done in advance.

To ensure no border is created in the Island of Ireland, Northern Ireland is subject to different rules to the UK. Goods can travel freely between the two jurisdictions. Goods travelling from Northern Ireland to the UK mainland will be subject to customs checks.

There are other consequences for fisheries as the access to the UK fishing waters is now reduced. Over the phasing in period of five and a half years, 25% of EU boats’ fishing rights in UK waters will be transferred to the UK fishing fleet. After this period the access and quotas will be subject to annual negotiation.

There are other sector specific changes which we have set out in our other information pages.

Ireland and the UK enjoy the benefits of a pre-EU treaty which enshrined the principles of the Common Travel Area. The arrangements date back to 1922 and include Ireland, the UK, the Channel Islands and the Isle of Man. It is important to note that the benefits of the CTA apply to citizens of Ireland the UK only.

In 2019 a Memorandum of Understanding was signed by the UK and Irish Government reaffirming the benefit of the Common Travel Area arrangement. This is not impacted by Britain’s exit from the EU.

Irish and UK citizens have the right to live, travel, work and study within the Common Travel Area of Ireland and UK. Other benefits of the CTA involve mutual access of Irish and UK citizens to social benefits, healthcare, social housing supports and certain rights to vote in either country. Citizens can travel without the need for passports however passports are required for security and identification reasons at point of entry to either country.

The CTA does not deal with the movement of goods or services across the borders between each jurisdiction. As an EU member state Ireland is now aligned to the terms of the UK-EU withdrawal agreement.

There is difference to be drawn between Tariffs and Duties. The withdrawal agreement provides that no tarriff’s will apply on goods travelling between the UK and the EU. Tariff’s are a direct taxation measure Countries or Federations such as the European Union introduce to protect the trade in their territory. The EU-UK Withdrawal Agreement removed customs duties except for goods already subject to excise duties such as tobacco and alcohol.

Special provision has been made for Northern Ireland. It has remained inside the EU customs union. Businesses there must also complete customs declarations on the transfer of goods to mainland UK.

Duties on excisable goods such as alcohol and tobacco are still payable. Changes introduced by Brexit now mean that Irish/EU Tax Warehouses can no longer hold alcohol under “duty suspension” where the goods originated from the UK. UK Warehouses are no longer part of the EU Excise Management Control Systems (ECMS) network. This will impact on UK distributors with a subsidiary businesses in Ireland. 

The first measure to undertake for an Irish business is to register for an Economic Operators Registration and Identification (EORI) number. A number issued by the UK previously will no longer be valid. This application can be made via the Irish Revenue Commissioners online portal or through the ROS system. Even if your business is using a haulage service to transport the goods the Export Declaration required by your business must reference your correct EORI number.

The complexity of exporting to the UK will be identifying the correct Commodity Codes. Commodity codes are a harmonised list of goods agreed by the World Customs Organisation. All goods in export to the UK must now be identified by reference to a customs tariff and the commodity code. The customs tariff will in each case be the Common Customs Tariff.

The second component, the Commodity Code is primarily the issue causing the delay at the ports in the UK. An incorrect commodity code will prevent the entry or exit of goods to and from the UK until it is rectified. The list of Commodity Codes can change from year to year. The current list can be downloaded from this link.

Online retailers selling products to consumers in the UK by postal delivery must consider the value of their trade for UK VAT purposes. If the value of your trade is below £70,000.00 annually then the retailer must charge VAT at the Irish rate on the sale. There is no need to register with the UK for VAT purposes. However if your trade is likely to exceed £70,000.00 annually then you must register your business in the UK and charge VAT on the sales at the prevailing UK VAT rate. Your business should also have an up to date and valid EORI number.

We will be constantly updating our section on Brexit related information

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