21st August 2013

Did You Know? Issue 164

1. Changes to Intrastat Threshold: 2. Free Trade Agreement between EU and Colombia: 3. EU Trade deal with Honduras, Nicaragua and Panama becomes operational: 4. Retrospective changes made to the list of EU GSP beneficiary countries: 5. UK Export Licensing Control – OGEL/ OIEL:  6. China VAT changes affect UK/EU Importers:  7. Myanmar/ Burma back on EU GSP: 8. National Duty Repayment Centre (NDRC) in Dover: 9. ICS Software Release: 10. Pet food exports

1. Changes to UK Intrastat Threshold: A statutory instrument is to be brought before UK Parliament to increase the Intrastat Arrivals Threshold to £1,200,000 (currently £600,000) from 1 January 2014.  There are no plans to change the Intrastat Dispatches threshold, which sits at £250,000, nor the threshold over which more detailed information must be provided, eg Incoterms (£16,000,000).  These changes are for Intrastat only, and do not change in any way UK VAT return or EC Sales List obligations.  The increase of the Intrastat Arrivals Threshold to £1,200,000 from 1 January 2014 will mean that many businesses will no longer have to submit the returns, which I think will be a great relief for many of them!  We understand that once the Statutory Instrument has made its way through Parliament (it won’t be debated!) HMRC will monitor the value of Arrivals reported and if the value is less than £1,200,000 at the end of the year, they will write to the businesses concerned to tell them to stop submitting them.  If you believe that you should no longer be liable to submit Intrastat Arrivals returns and have heard nothing by, say, 10 January 2014, I suggest that you e-mail the Intrastat Unit onIntrastatEnquiries@hmrc.gsi.gov.uk  just in case you have slipped through the net.  As a footnote, whilst I think everyone is aware that it is a criminal offence not to submit Intrastat returns when you are liable to do so, you may not know that it is also a criminal offence to submit Intrastat returns when you are not liable to do so.  So, if you are required to stop sending them in, please stop.
2. Free Trade Agreement between EU and Colombia: A bilateral FTA between the EU and Colombia became live on the 1st August 2013. This adds Colombia to the existing FTA between EU and Peru which was published in December 2012.  With immediate effect on the 1st August 2013 certain imports (depending on the commodity code) have a reduced duty levied on arrival into the EU and Colombian customers can request EUR1 Forms.  Check the Agreement to see if your goods qualify – Link to Agreement:  Link to further information
3. EU Trade deal with Honduras, Nicaragua and Panama becomes operational:  As of 1 August 2013, EU and Honduras, Nicaragua and Panama will start applying the trade part of an Association Agreement signed in 2012.  The agreement will open up markets and create a stable business and investment relation with our Central American partners. This is not a Free Trade Agreement.  More information
4. Retrospective changes made to the list of EU GSP beneficiary countries: The right to claim GSP access to the EU markets has been retrospectively granted to South Sudan. The Netherlands Antilles has been dissolved so each new country has been grant GSP status in their own right: Bonaire, St Eustatius and Saba, Curacao and St Maarten.  This permits back-dated claims for GSP duty rates to be applied to any qualifying import into the EU from 1st January 2013.  Further information
5. UK Export Licensing Control – OGEL/ OIEL:  In May 2013 we had a DYK covering the requirement for users of Open General and Open Individual Export Licences to make quarterly returns to the UK Export Control Organisation (ECO).  In a recent announcement the ECO have said that the requirements have be significantly reduced/
a)              Reporting will not be required on licence use in 2013 but is being deferred until 2014
b)              reports will now be made on an annual rather than a quarterly basis
c)               you will not be required to report the rating or goods description.
Read More
6. China VAT changes affect UK/EU Importers: The following Notice with regard to Chinese VAT was issued – it was applicable from 1st August 2013:  'In accordance with the Circular 37 (Chi Shui (2013) No. 37) on "Tax Policy Regarding Nationwide Implementation of VAT Pilot Programme on Transportation & Modern Services Sectors", jointly issued by the Ministry of Finance (MOF) and the State Administration of Taxation (SAT) of PRC on May 24, 2013, the relevant VAT policies will be expanded nationwide in China effective from August 1st 2013. At the same time, tax regulations governing the VAT pilot program implemented since January 1, 2012 are to be abolished.'
In compliance with the above mentioned policy, an additional 6% Value Added Tax (VAT) will be levied by all shipping lines and transport companies from 1st August 2013 (Invoice date). This charge is payable in China ONLY, and is chargeable against Ocean Freight, Air Freight, and all local charges (booking fee, transportation, customs clearance).
UK Importers purchasing under FOB terms should not see any increase in charges. In the case of Ex-Works shipments, VAT would be applicable on the local charges only. For those importers buying under CIF/CFR terms, you may want to consider changing the terms to FOB to avoid the VAT; your account manager will be happy to provide a freight quotation if required. UK Exporters responsible for DAP/DAT movements would also be subject to the 6% VAT on destination landing, delivery and clearance costs.  Any VAT payable in China would be considered deductible for companies eligible to the VAT deduction program. We are fully investigating this program to have a better understanding about the scope of companies that can claim back the VAT and will keep you fully updated about our investigations.
7. Myanmar/ Burma back on EU GSP: Myanmar/Burma’s reinstatement in the EU Generalised System of Preferences (EU GSP) took effect on July 19, 2013, applicable retrospectively to June 13, 2012. All products originating in Myanmar, except ammunition and arms, will benefit from full duty-free and quota-free access to the EU market. Claims for refunds of duty paid on imports since June 13, 2012, will be allowed under certain circumstances. This reinstatement comes less than three months after the EU’s decision in May 2013 to formally lift its sanctions regime against Myanmar/Burma (with the exception of the arms embargo, internal repression controls, and related ancillary services), as reported in our May newsletter. The restoration of the US Generalized System of Preferences for Myanmar/Burma is also presently under consideration. Importers should review and identify whether belated claims for preferences can be submitted for past imports between June 13, 2012, and July 19, 2013, and ensure that they have the appropriate documentation in place going forward to claim preferential treatment under EU GSP for relevant imports into the EU. Companies not yet sourcing from Myanmar/Burma should consider the potential benefits in light of the latest regulatory changes.
8. National Duty Repayment Centre (NDRC) in Dover: All repayments of customs duty in the UK are processed by the National Duty Repayment Centre (NDRC) in Dover. The current database used to record these repayments is to be replaced with an expected go live date of 2 September 2013. Read More
9. ICS Software Release: due to IT changes required for the EU-3rd Country AEO Mutual Recognition to be added to the Import Control System (ICS) it will be necessary for HMRC to take the ICS System down on Saturday 31st August 2013 between 12.00 and 16.30. This will affect both those who access ICS via the Government Gateway and those who use a Community System Provider (CSP).
Those responsible for submitting ICS declarations should ensure they have an acceptable Business Continuity Plan in place.  Carriers who lodge their ICS declarations using the Trader Front End (TFE) will not be able to send or receive messages during this time.  All relevant safety and security data should be retained by carriers, but there is no UK Customs requirement to send any ICS data retrospectively for goods which have departed foreign and already arrived in the UK during the period of downtime. Where goods have departed and are due to arrive in the UK after the system has been restored, an ICS message will be required
10. Pet food exports: Invitation to attend new DEFRA/Industry group: This customer information note is to inform interested parties that the Department for Environment, Food and Rural affairs (Defra) is working with the Pet Food Manufacturers Association (PFMA) to establish an export certification user group (ECUG) for the pet food industry. Click here for more information
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