40 Brexit Frequently Asked Questions – 2023 Update

If you are buying goods online (or by mail order), you as the buyer are ultimately responsible for the accuracy of the customs declaration and to pay any duty and tax to Revenue.  This is the situation at present if you purchase goods online from countries outside the EU like the US. Unfortunately, some websites do not include details of duty and VAT in their prices so figuring out the final price can be challenging.

If the order is sent by post by the supplier, their postal provider or courier will require them to complete a form for the customs declaration. When it arrives in Ireland, An Post or your courier will calculate the VAT and duty owed and facilitate payment on collection - payment must be made before or on delivery [make sure to factor in VAT when comparing prices available in Ireland]. There will be a Customs docket with the delivery to prove that the customs declaration was made.

A fee of 1% of the value of the packet or parcel, with a minimum charge of €10, is charged by An Post for customs clearance of parcels imported from countries outside the EU. This fee is in addition to any duty or VAT payable.

Post Brexit, Goods purchased in the UK could be subject to Customs. The UK is now outside the EU. If you buy goods online from a UK website as an Irish resident this is considered an import. An EU/UK trade and cooperation agreement means that products coming into the EU from the UK that are made in the UK are not subject to customs. But goods originating outside the UK, to include those originally made in an EU country and exported to the UK, and then sold on to Ireland (or another EU country) may also be subject to import duty.

• Import duty is not charged on any purchases to Ireland from the UK that are valued at under €150. The €150 limit excluding UK VAT (approx. £130 depending on exchange rates) is per package/order, NOT per item. If you plan on ordering 2 or more items with a combined value of more than €150 (excluding delivery charges, insurance and handling charges), you could avoid any worries about import duty by ordering them separately.
• When an order from the UK has a value of more than €150, the rate of import duty will vary according to the category of product. Many products have a zero rate of duty. Gold/silver jewellery has 2% Import Duty and Leather soled shoes 17% as per EU Access to Markets website [as stated above if the product’s country of origin is the UK – then there will be NO customs/import duty].
• Online marketplaces and platforms (like Amazon) as the deemed supplier will account for VAT and customs for all parties involved. They can register in one country and remit all VAT on sales across the EU thereby reducing their administration.

If buying an item in the UK for dispatch to Ireland, the UK retailer is supposed to include Irish VAT rates, generally 23% as per the category of the product, in the total which they forward to Revenue in Ireland. If it is not charged, An Post or the courier company will collect the VAT and an admin fee when they are calculating the Import duties. Some UK retailers continue to charge the UK rate as their systems cannot deal with Irish vat – in this case you will be charged the full 23% Irish VAT rate before final delivery, which could work out very expensive.

2022 Update: Receiving Gifts in the Post from UK

If someone sends you a gift in the Post/by courier from the UK you will have to pay the Customs Duty and VAT unless the value of the gift is under €45 (including insurance, freight and postage costs). Your postal provider will notify you and collect payment.

PARCEL MOTEL UPDATE:

These changes resulted in the closure of Parcel Motel - a service which provided an address in the UK and forwarded then forwarded all goods to your Irish address for a fee. A businesses of its time it solved a key problem that a lot of UK retailers and suppliers would not ship to Ireland.

All goods imported into Ireland must be declared to Revenue in advance of arrival. Among other things, customs officers make sure that any goods declared for import are moving legally and are not prohibited or restricted. All interaction with Revenue for customs purposes is done electronically. For instance each customs import declaration is submitted electronically using Revenue’s Automated Import System (AIS)

In December 2022, Revenue published A Guide to Customs Import Procedures to outline and explain the procedures and customs formalities involved in importing goods to Ireland. When you import goods from outside the EU VAT area, VAT must be declared and paid based on Irish vat rates. The EU VAT area includes Northern Ireland but excludes Great Britain (GB).The VAT due on the goods is calculated on the total cost of the goods. This includes transport costs, insurance costs and any applicable Customs Duty.

Customs duty rates on goods being imported into the EU can be checked on TARIC, the integrated tariff of the EU

In general, VAT is payable at the point of importation into Ireland or Northern Ireland. However if you are approved to use the deferred payment system, VAT will not be due at this time. The deferred payment system allows you to defer payment of certain import charges. These import charges include Customs Duty and VAT. The payment of these charges can be deferred until the 15th of the month after importation. Imported goods are liable to VAT at the same rate that applies to those goods when sold in Ireland.

If you are a VAT registered trader, you are generally entitled to take credit for VAT paid on goods imported for the purposes of your business. You must claim this credit in your return in the taxable VAT period concerned, subject to the normal restrictions.

BTW, if you are selling goods online (for example Clothes) in one or more other EU states e.g France, your business can register with the Irish One Stop Shop portal and charge Irish VAT, until total sales in those EU countries reach the EU threshold of €10,000 at which time you have to charge the VAT rate in each of those countries but you will continue to use the Irish One Stop Shop to declare and pay the VAT due.   For more see: https://taxation-customs.ec.europa.eu/where-tax_en

How the import process is generally managed depends on the volume, frequency and value of the import trade.

A. Large scale importer
Large scale importer will probably have internal staff and systems for importing. They will have registered with Customs /Revenue and use the prescribed software to declare imports electronically using the new AIS system (for more see Q.14).

These businesses will probably avail of the Ready for Customs Grant from Enterprise Ireland which provides up to €9,000 per employee working on Customs Clearance. They may also avail of Skillnet Ireland's Clear Customs online training which is described as being ideal for those trading regularly with the UK.

B. Less frequent importer or smaller business
A smaller business or one which imports less frequently will probably work with a Customs Agent to arrange import clearance. I had a great conversation with Ed Campion of Campion Freight, a freight forwarder which has been offering Customs Clearance services in Mayo for over 20 years, working with global clients importing and exporting beyond the EU to China, the US and Canada. Campion Freight charges a customs clearance fee of EUR 65 for import clearance and EUR 45 for export clearance. The sector is expecting to be very busy as a result of Brexit.

C. Direct Importers using Couriers and An Post.
The procedure for importing and the documentation involved in importing goods using the postal system and couriers depends on the value of the goods/ consignment. Your supplier will complete the customs declarations see Post Office UK website for details which will be attached to the outside of the package. To conclude, under international postal agreements all packages received from outside of the EU require a customs declaration

There are media reports that there will huge delays in shipments to the UK to include the landbridge to Europe. I spoke to a small bespoke engineering solution company in Mayo who said that the inability to order parts in very small order quantities on a 2-3 day turn around from the UK would impact on their ability to provide top-quality service to their customers. It would be near impossible to keep in stock all the possible required parts given the range of parts that they use across their projects.

There are no direct fees levied by Revenue for dealing with Customs in Ireland. The additional costs will arise from compliance costs as per the options outlined in Q13.

I was talking to a company involved in fashion production who have an extensive catalogue with many products made to order which result in small orders to input suppliers based in the UK. The sustainability of their extensive product lines is now called into question unless they increase their stock range.

It is anticipated that there will be an increase in agents and intermediaries who will import in bulk replacing smaller direct orders from microenterprise with specialist suppliers in the UK. This will add a layer of cost to the supply chain and affect the competitiveness of some sectors particularly engineering.

You are legally obliged, as an importer of goods from GB, to submit an electronic import declaration to Irish customs. Full detail on electronic customs systems and information on the technical requirements for customs is available on the Revenue website

Revenue will implement a new national import system on Monday, 23 November 2020 at 9:00 am. This new Automated Import System (AIS) has been introduced to comply with the provisions of the Union Customs Code (UCC). AIS will ensure that businesses can import goods legally from outside the EU using the most efficient process possible. This will replace the Automated Entry Processing (AEP) system. Revenue operates a helpline for queries on the system. It is intended that the AIS will integrate fully with ROS the Revenue Online Service.

Payment of duties is via ROS (Revenue Online Service). Payment can be by credit and debit card, or bank transfer and direct debit.

Revenue also offers a deferred payment method which allows payment of import charges to be made on the 15th day of the month following import.

If you wish to avail of this facility, you will have to apply for authorisation from Revenue and have been approved for a comprehensive guarantee from your bank. A comprehensive guarantee is a guarantee issued by a bank or financial institution, undertaking to Revenue to pay duty owed by a business up to a prescribed limit, in the event that the business defaults on payment.

The Customs Guarantee is discussed in the EI Customs Online Course.

Yes the Customs Insights Course is free - sign up via PrepareforBrexit.com - it says that it takes about 40 minutes but I spent probably 2 hours and it was time well spent. This is how the programme is described on the website:

The Irish Exporters Association IEA is a great source of information, links and important contact details to help your businesses prepare to trade with the UK. Similar to Q.13 regarding imports the options will be to manage export administration internally, to use an agent, or to rely on the postal system and couriers.

In Mayo, I was talking to a kitchen manufacturer who sells a lot of premium kitchens in the UK particularly in London. He has an installer based in London. He arranges delivery using a local company who load up 3 van loads per kitchen to deliver to London. The likelihood is that the kitchen manufacturer will work with a Customs Agent to ensure that the current arrangement can continue - along with potential shipment delays, the big concern is currency fluctuations.

In April 2022, Revenue published 'A Guide to Customs Export Procedures’. The 43 page pdf  is for anybody who plans to send goods from Ireland out of the European Union (EU). At present there are 27 Member States of the EU as follows: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.

There are no export taxes, duties or levies in force on goods exported from the EU on the basis that import duties will have to be paid in the country of destination. The business must ensure that the goods have left the EU and have evidence of export. Each export is declared (by the business or their Agent) to Revenue using a customs export declaration submitted electronically using Revenue’s Automated Entry Processing (AEP) System. If you are a trader who imports or exports goods (excludes services) into or out of the European Union you will need an EORI number.

To import to the UK, Irish based businesses will need a second Economic Operator Registration and Identification (EORI) number: a UK EORI is available from HM Revenue and Customs separate to the EU EORI obtained from Irish Revenue. Used on customs declarations, an EORI number uniquely identifies the exporter in customs procedures and documentation.

Licences are required to export certain types of goods from the EU - some goods are prohibited or restricted to include live or dead animals, fish birds or plants and certain foodstuffs, mainly milk, fish or products thereof. A license, permit or authorisation will be required to import or export such goods. See Revenue for full list of prohibited and restricted goods

The UK Revenue & Customs will allow importers into the UK to delay production of post-Brexit customs declarations and tariff payment between 1 January and 30 June 2021. All records will be kept by the company and passed onto HMRC along with payment in July 2021.  This is relevant for companies, including Irish businesses based in the UK, who import into the UK that are approved to use simplified declarations by HMRC. It is not anticipated that this arrangement will be reciprocated by the EU.

This is relevant if you intend to continue to use the infamous landbridge that the UK has become for goods to and from Ireland. This is a situation where a freight forwarder or customs agent is the best option. You do need to be careful in completing the paperwork to ensure that you are not charged VAT on the goods in transit.

Your Agent (or internal expert) will utilise the Transit Procedure, a customs procedure that allows goods to be moved across international borders under customs control a customs procedure that allows goods to be moved across international borders under customs control. A comprehensive guarantee as per Q15 is required to secure all charges on the goods.

Exports will continue to be managed through the AEP system until 2023. The Automated Entry Processing (AEP) system handles the validation, processing, duty accounting and clearance of customs declarations.

If you are a trader who imports or exports goods into or out of the EU you will need an Economic Operators Registration and Identification (EORI) number. Yes, every business needs to get an EORI if they intend to trade with the UK - no exceptions. This number is valid throughout the EU. It is used as a common reference number for interactions with the customs authorities in any Member State. Consult with the Revenue website to find out more and to register for your EORI number.

BTW, there are also separate UK EORI and Northern Ireland EORI numbers. The UK EORI is needed to move goods between the UK and non-EU countries while from 1 January 2021 you’ll need an EORI number that starts with XI to move goods between Northern Ireland and non-EU countries.

Incoterm an abbreviation of “International Commercial Terms” defines a transaction between importer and exporter, so that both parties understand the tasks, costs, risks and responsibilities, as well as the logistics and transportation of a product from one country to another. The following are examples:

• Ex Works (EXW) – The seller makes the goods available at a designated location, and the buyer must cover the transport costs.
• Free on Board (FOB) –The seller must load the goods on board of the ship, nominated by the buyer at which point all liability transfers to the buyer.
• Free Alongside Ship (FAS) – The seller must place the goods alongside the ship at the named port, the risk of loss or damage to the goods passes when the goods are alongside the ship, and the buyer bears all the costs from that moment on.

The fine print of a contract dictates which party is the importer and exporter of record ie who is responsible for making the export declarations and ensuring the accuracy of the information.

Prior to Brexit, an Irish VAT registered business importing either goods or services from a VAT registered UK business you would not be charged VAT. The Irish company would have accounted for VAT using what is known as a reverse charge mechanism. The Irish VAT charge is applied in their next VAT return and a simultaneous credit is taken for it as if a reclaim had been made. This situation has now changed.

VAT is now charged on all services delivered in Ireland by UK based businesses at Irish rates. The UK business will have to register for VAT in Ireland. Their business customers can reclaim VAT as appropriate.

As explained in the answer to Q.13 all goods imported into Ireland must be declared to Revenue. Customs charges may apply if the consignment value is over €150 depending on the country of origin details and category of good.

VAT is now charged on all Goods delivered to Ireland by UK based businesses at Irish rates. The UK business will have to register for VAT in Ireland. Their business customers can reclaim VAT as appropriate. The Irish business can also opt to act as the importer of record for consignments valued over €150 and thereby take responsibility for paying the relevant import VAT and any duties. Postponed accounting for VAT facilitates VAT registered Traders as they do not have to pay VAT at the time of importation.

CONSUMERS

This December 2020 Irish Times article explains that online purchases after Brexit could see 40% price hikes for online shoppers. This RTE article stated that Irish consumers at that time made 70% of their online purchases from the UK.

Irish consumers importing from a UK business will not be charged UK VAT rather they will pay the equivalent VAT applied in Ireland when the product is delivered generally 23%.  VAT is charged on the value of the item plus the transport, delivery and insurance fee.<br><br>

If buying an item in the UK for dispatch to Ireland, the UK retailer is supposed to include Irish VAT rates, generally 23% as per the category of the product, in the total which they forward to Revenue in Ireland. If it is not charged, An Post or the courier company will collect the VAT and an admin fee when they are calculating the Import duties. Some UK retailers continue to charge the UK rate as their systems cannot deal with Irish vat – in this case you will also be charged the full 23% Irish VAT rate before final delivery, which could work out very expensive.

The next Question, #25 will deal with eCommerce businesses selling to UK Consumers. Irish businesses selling directly to UK end consumers, probably using An Post, will need to be VAT registered  in the UK from your first sale.

Exporting Goods to UK

Goods sold to UK businesses will now be considered as exports of goods from Ireland. The 0% rate of Irish VAT should continue to apply to such exports, assuming goods are transported to mainland UK and the UK customer is responsible for the goods on point of entry into the UK (paymen of VAT and any import duties). The UK business would need to provide a valid UK VAT number.

Alternatively, the Irish business could opt to charge their UK business customer the UK VAT rate and include the transaction in its VAT return to HM Revenue & Customs.

As per Q.26, VAT will be charged by all Irish businesses on all services to UK and NI based customers both consumers and business - the reverse charge mechanism has been removed as referenced in Q.23.

If you are selling to consumers in the UK, mostly likely via an eCommerce site such as Shopify, you will need to be VAT registered from your first sale.

• VAT is charged on all goods sent from outside the UK to Great Britain at UK rates, generally 20%. Irish VAT is not charged in this instance.
• The exception - VAT is not charged on goods that are gifts worth £39 or less. Specific rules apply to gifts.
• If your customer is a Business with a Vat number, they can reclaim the VAT as normal from HRMC.
• The Irish business will do a VAT return in the UK every quarter. There is no threshold so every business will have to register. The alternative is to decide not to sell online to UK based consumers.
• The UK consumer will have to do a Customs declaration. This is managed on their behalf by the courier or postal service. The Irish operator fills in a form provided by courier or postage service that accompanies the package.
• With regard to Customs, a Zero Customs rate may apply depending on ‘rules of origin’ if the product is sourced from Ireland.
• The consignment value is also important as no Customs charges apply where the consignment value is under £135.
• Customs Duty is charged on all goods sent from outside the UK that are excise goods or worth more than £135. It is charged on both the price paid for the goods and postage, packaging and insurance.
• Merchant using an Online Marketplace (OMP) like Amazon to supply imported goods with a value below £135 to UK customers, the VAT liability will be shifted to the OMP.
• Your customer will ultimately be liable for payment of UK VAT and any customs. The customer will be contacted by Royal Mail or the courier company with details of VAT, duty or delivery charges (‘handling fees’) to receive their goods. Details of all charges should be provided with the Irish delivery docket (customs declaration) to avoid any further charges being levied on your UK customer.

Please note that your UK customer (B2C) will also be responsible for paying Customs Clearance fees. A google search finds this Parcelforce page which explains that the customs fee is £12 for all import parcels below a contents value of £873 (equivalent to €1000) and £25.00 where the parcel is valued over €1000/£873.

So what to do:
Talk to your accountant to register for VAT in the UK or do it yourself. Or look at a service like https://simplyvat.com in the UK. [You don't need to set up a company in the UK]

Talk to An Post or courier. DPD have a great website: https://dpd.ie/Shipping/Brexit-Update-For-Shippers

Look at an eCommerce fulfilment service like RWB Connect.com

Talk to your web developer to have a plan to segregrate consumers from the UK depending on whether the basket purchase is above or below the £135 threshold. The system will need to account for Pricing/VAT, and logistics to include customs declarations.

Online Marketplaces (OMP)

Post Brexit, the UK Government introduced a new model for the VAT treatment of goods arriving into Great Britain from outside of the UK. One significant change applies to Online Marketplaces (OMPs) like Wish, Amazon and Etsy.

Where an Irish merchant uses an Online Marketplace (OMP) to supply imported goods with a value below £135 to UK customers, the OMP will pay the import VAT, which they can later reclaim, and also levy UK VAT on all products sold to its customers and pass this to HRMC.

My understanding from this Gov.uk Guide to Changes to VAT treatment of overseas goods from 1 January 2021 is that where the consignment value is over £135 that the Irish Trader will pay the import VAT which they can later reclaim. The OMP will continue to levy UK VAT and customs duty on all products sold to its customers and pass this to HRMC, so there is no change in user experience for the end customer.

If you are an Irish business selling in the UK, all the guidance is that you will have to register for VAT in the UK with HRMC for both services and goods. No threshold applies. You won’t be charging VAT from Ireland so no need to declare to Revenue in Ireland. UK Consumers will pay the full amount including VAT at the applicable UK rate.  Your business customer can then reclaim the VAT as normal from HRMC if they are registered for VAT. Professional services are not affected by WTO Tariffs and Customs procedures.

Personal experience: As a small sole trader in Ireland, I have 2 UK Clients one in Northern Ireland. So I went to register for VAT in the UK. Fortunately, after the application process I was told that I did not have enough activity in the UK to justify a VAT registration. So I was instructed to put a statement on my invoices to UK based clients that they would have to declare and make the VAT payment on the amount charged using the Reverse Charge mechanism. So if the fee is €1000 plus VAT, I just charge €1000 - I ask them to pay me in Euro not sterling.

• It must be acknowledged that UK customers want to deal with Irish companies who are committed to the market. It is advisable to register a UK business if you want to sell professional services. I spoke to an Architect and a Lean Consultant who both sell on a subcontract basis to one customer in the UK. They would not need to register a company in the UK in this instance but would find it difficult to expand the business on this basis.
• I spoke to a software company who have now moved their UK clients to Amazon servers in the UK with all other clients hosted from HQ in Mayo using EU based amazon servers. This is to comply with Data regulation to include GDPR (which will no longer apply in the UK).
• I also spoke to a kitchen installer. If they send staff to install in the UK they would need to do a customs declaration on the equipment that they use to allow it to be transported into and back out of the UK.
• I also spoke to a company who sell Statistical analysis consultancy to UK customers - I highlighted the issue of data transfer as a potential issue. The key recommendation is to talk to your customer as ultimately it is an issue that they must manage.
• The Law Society has an extensive FAQ on Brexit in terms of recognition of qualifications and provision of legal services.

The other issue for service businesses arises when employees are based more permanently in the UK. This will require registering as a business and an employer in the UK. But Irish people won't need to apply for a Visa*.

*The UK's immigration system will now apply to EU, EEA and EU citizens. For visits under 6 months, EU, EEA and Swiss citizens will be able to enter the UK without applying for a visa. They may participate in business-related activities, such as meetings, events and conferences. If you require EU, EEA or Swiss citizens to go to the UK to work for longer than 6 months, you’ll need to check the UK’s immigration laws. The new rules do not apply to Irish citizens because of the Common Travel Area arrangement.  Under the long standing CTA, British and Irish citizens can move freely and reside in either jurisdiction and enjoy associated rights and privileges, including the right to work, study and vote in certain elections, as well as to access social welfare benefits and health services.

Provisions relating to Northern Ireland are covered by the revised Protocol to the Withdrawal Agreement effective from 1 January 2021 and the Windsor Framework agreed on 28th February 2023. Northern Ireland:

• legally remains part of the customs territory of the UK
• Effectively remains within the EU Single Market for the movement of goods only.Northern Ireland EORI numbers have been updated with a new country code 'XI'. XI EORI numbers are accepted on the Irish customs clearance systems.
• EU VAT rules on services no longer apply to Northern Ireland. If an Irish based business provides services to a NI based company, UK VAT will be due on the services.

The intention of the EU-UK Trade and Cooperation Agreement and the NI Protocol is to facilitate frictionless trade North/South in terms of Customs controls/documentation.

This issue is also addressed under the National Brexit Readiness action plan under Connectivity, Transport and Travel. After the end of the transition period, UK driving licences will no longer be valid for persons living in Ireland - they can be easily exchanged. Driving licenses will be valid for short term trips in both jurisdictions.

No but hopefully yes. This issue is addressed under the National Brexit Readiness action plan under Connectivity, Transport and Travel

At the end of the transition period, access for Irish consumers to Roam-Like-At-Home in the European Union will no longer apply in relation to travel to the UK. Mobile operators will as a result be able to apply a surcharge on roaming customers. This will include in relation to travel by Irish consumers to Northern Ireland. The majority of telecommunication operators have indicated their intention to continue with the present regime after December 2020, this however could be subject to change over time.

UPDATE: Yes, all the major Irish mobile operators continue to include UK roaming in their standard plans without additional charges