BREXIT: Selling Goods Business to Business

Adam Pritchard

By Adam Pritchard
December 5, 2020

The transition period is almost over and on the 1st January 2021, the UK will have officially left the EU. In this post, we look at how Brexit is affecting those businesses Selling Goods Business to Business.

The current state of the nation: Pre-Brexit

Selling Business-to-Business Goods in the EU

As a member of the EU Business to Business (B2B) transactions between the UK and EU were conducted on the following basis.

  • When the UK sells goods to the EU this is currently called a “dispatch.”
  • The UK seller must get the VAT number of the company in the EU member state
  • The sale of goods is zero-rated for the purposes of UK VAT.
  • The purchaser receives the goods and accounts for the VAT using the reverse charge rules.
  • The UK seller submits an EC sales list and if the value of their arrivals or dispatches exceeds certain thresholds they have to submit an intrastat return.


Buying goods from the EU B2B

  • The EU seller must get the VAT number of the UK entity
  • The EU seller zero rates the supply of goods
  • The UK buyer accounts for the purchase using the reverse charge rules

*In both instances no import duties are paid


The Future: The rules post Brexit

In a Post Brexit world both EU distance selling rules and the reverse charge rules will be abolished.


Selling goods to the EU

  • Goods exported by UK business to the EU will be zero rated.
  • VAT and import duty will have to be paid on arrival at the local rate upon arrival.


Buying goods from the EU

  • Goods imported into the UK from the EU will be subject to UK VAT and import duties.
  • If the UK does not have a trade deal with the EU the UK Global Tariffs charge will be applied


What do you need to do?

  1. Every business will need to apply for an Economic Operator Registration and Identification Number. This number should start with the prefix GB.
  2. Businesses exporting to the EU and the rest of the world will need to make a customs declaration. These declarations can be complex and in practice, your courier will likely make this for you.
  3. If you are importing or exporting through Northern Ireland you will also need an EORI number that begins with the prefix XI.
  4. Businesses will need to be sure of the commodity codes used when exporting. These codes determine the import duties paid on arrival in the destination country. This import duty should also be built into the price of the good to avoid eroding profit margins.

If you’re selling B2C then please read our blog post about how Brexit has implicated those businesses.

Confused about all these new rules? Get in touch with our team to see how we can help.