When the UK leaves the EU, it will become a third country from a customs perspective and the free circulation and free movement of goods between the EU and the UK will end. This will increase substantially the number of businesses that will have to complete customs formalities and other related obligations for trade with the UK and through the UK landbridge to the EU. This will present a significant challenge for many of those businesses which have not had any experience of third country trade and customs formalities.
I am advised by Revenue that in the last few months as part of its ongoing multi-layered trader engagement programme, Revenue wrote to all businesses who traded with the UK in 2018 or in the first six months of 2019, outlining the practical preparatory steps to take based on their trade pattern with the U.K. In addition, businesses with significant or frequent trade with the UK received or will soon receive a follow up phone call from Revenue. I understand that follow up calls will be completed by Revenue by the end of September.
In regard to VAT, under existing rules, when the UK becomes a third country, VAT on import will be chargeable at the point of importation unless the importer is approved to use the current deferred payment system, which allows approved traders to defer payment of certain charges, including customs and VAT at import, until the 15th of the month following importation. The Deputy will be aware that I made provision in the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019 for the introduction of postponed accounting for VAT registered traders importing goods from non-EU countries, which will be implemented if the UK leaves the EU without a withdrawal agreement.
Revenue continue to assist businesses planning to register for VAT in Ireland for the first time as a result of Brexit, and for businesses that may choose to make their Mini One Stop Shop digital sales VAT returns through Ireland following a UK departure from the EU.