Movement of Goods post Brexit

Andy Dawbarn profile image

Andy Dawbarn, Partner, Head of Indirect Taxes

Andy joined Wilkins Kennedy in 2010, having spent over thirty years in VAT, the first five of which were with HM Customs & Excise (as was) and the latter years have been spent in practice.

March 18, 2019


We are aware that VAT registered businesses have been receiving letters from HMRC recommending that an ‘EORI’ number (Economic Operator Registration and Identification number) should be applied for by 29 March 2019, in preparation for Brexit. 

Regardless of what may or may not happen on 29 March, in our view, if, as a business, you are involved with the movement of goods, then applying for an EORI number is a prudent thing to do.

But, what is this EORI number and why would a business need it?

Current EU reporting

Businesses that buy and sell or transfer goods between the UK and other EU member states, will be used to the completion of additional boxes on the VAT returns, specifically:

  • Box 2 – to declare VAT on the acquisition of goods into the UK.
  • Box 8 – to declare the net value of goods sent from the UK to business customers in other EU Member States.
  • Box 9 – to declare the net value of goods received from EU business suppliers.

In addition to this, there may be the requirement to complete EU compliance declarations, including:

  • EC Sales lists – to report the value and the VAT number of the customer receiving goods from the UK.
  • Intrastat – to declare the type of goods plus volume/weight being moved to/from the UK.

Businesses that import or export goods will also be aware of the Customs clearance requirements, including the payment of VAT and possibly duty on goods being imported into the UK.

What is an EORI number?

As part of these import/export requirements, businesses must have an EORI number. This number is a group of 12 digits specific to a business that imports and/or exports goods from the EU (each member state issues an EORI number which may be used in numerous member states).

For businesses that are registered for VAT in the UK, the EORI number is simply the prefix ‘GB’, followed by the VAT registration number with ‘000’ at the end to make up the 12 digit number.  For example: GB 123 4567 89 000.

For unregistered businesses, it will be a series of digits usually starting with a ‘0’.

An EORI number must be applied for.  A business that is VAT registered cannot just add 000 to the end of the VAT number, likewise an unregistered business cannot make up 12 numbers.  Instead, the number must be approved and issued by HMRC.

In practical terms, an EORI number is requested by freight forwarders to clear goods through Customs to register that business as an importer and/or exporter – this number is then used by HMRC to process the documents and any import VAT payable by the importer is charged and either paid directly by the importer or by the freight forwarder on behalf of the importer.  An import VAT certificate (“C79”) is issued to the business during the month following importation and this is used as evidence to reclaim VAT on a return – the freight forwarder’s charge and any invoice it might issue cannot be used to reclaim VAT.

Although VAT registered businesses have received the letters from HMRC, if any business not registered for VAT starts importing or exporting then an EORI number is still necessary to link to that business for payment of VAT and duty.

EU goods movements after Brexit

The result of the UK leaving the EU means goods will no longer be subject to current EU reporting via the VAT return.  Instead they would be treated in the same way as goods being imported/exported from the EU – so an EORI number will become essential.

Registration is a relatively straightforward process and can be done online via HMRC’s website.

The EORI number lasts as long as the VAT registration number exists; if there are address changes these can be done by resubmitting the same application and using the tick box to confirm the enquiry relates to an existing EORI number.

If an unregistered business has an EORI number and becomes registered for VAT, a new EORI application should be submitted to HMRC to link the registration with the VAT number, so import VAT certificates can be received to reclaim input VAT (if eligible).

If you think you already have an EORI number, you can check by visiting the European Commission’s website and entering the number. Without an EORI number, a business may be seen as a private individual or “consumer”, goods could be delayed at the ports, and the business might not get a C79!

Irrespective of what happens on the 29 March, we would recommend registering for an EORI number. If you would like further information or assistance with an application, contact one of the Wilkins Kennedy VAT team to see how we can help.

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