The changes proposed under the Protocol mean that Northern Ireland will remain part of the UK customs territory but will remain somewhat aligned with the EU’s customs union and single market to avoid certain checks on goods on the Irish border.
While 60 per cent of businesses in Northern Ireland are aware of the Trader Support Service, a free customs advisory and services tool for businesses launched by the UK Government this week, 38 percent aren’t sure whether or not the system would apply to them. 18 percent of respondents have registered their interest in the scheme to date.
Public Policy Lead in Chartered Accountants Ireland Cróna Clohisey commented:
“Northern Ireland faces unprecedented upheaval in terms of VAT and customs next year. There are several changes coming down the tracks and the devil is most certainly in the detail.
“Take VAT for example. Next year, the UK will have three different VAT systems across goods and services with Northern Ireland following EU rules on goods. This will make the system the most complicated in the EU meaning businesses are going to have to align both their knowledge and systems to be ready.
“Our research showed that almost two thirds of those surveyed are confused about the changes.”
Northern Ireland will continue to follow EU customs rules with no customs controls, declarations or duties required for the movement of goods between NI and the Republic of Ireland. However, customs controls will be needed when goods move from GB to NI and very likely on imports into NI from the rest of the world.
This means in addition to significant changes in VAT rules, businesses in Northern Ireland will also have to follow different customs rules depending on the countries they trade with.
Chair of Chartered Accountants Ireland’s Northern Ireland Tax Committee, Alan Gourley said:
“Come 1 January, many businesses in Northern Ireland will be dealing with customs formalities for the first time. These are the same businesses that are already struggling with the impact of Covid-19 and may not have the resources at this particular time to get up to speed with import processes and customs and safety declarations.”
“The Trader Support Service might suit these businesses. It is free to use and will guide traders through what the Northern Ireland Protocol means for them and the steps that they must take to comply with the new rules.
“Businesses can choose whether they use the system as an education resource or whether they also want the service to complete digital declarations on their behalf. Whichever option they take, we urge businesses to act now to access the information they need to make the preparations required for 1 January. “
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