Steps for Isle of Man Businesses to mitigate Brexit impact | Tax Talk

It's not too late to prepare 

The Isle of Man and the United Kingdom will leave the EU’s Single Market and Customs Union when the transition period ends at the end of the year. From 1 January 2021, the Isle of Man will operate a full, external border with the EU meaning that trading goods will be subject to customs formalities.

This will potentially create additional costs and frictions to trade, but there are certain steps that an Isle of Man business can take to mitigate the impact. At PwC, we suggest considering the following action points.

Steps to mitigate

Make sure you have a GB EORI.
You should already have an Economic Operator Registration and Identification (EORI) number. This is an ID number for trading purposes and will be needed to complete customs declarations. If you do not yet have one, you can register on the UK Government website.

Are you an Authorised Economic Operator?
This is an internationally recognised trusted trader scheme and can help with various formalities of the customs process, such as faster processing times for customs simplifications and authorisations, reduced bank guarantees and a lower risk score which may reduce the number of customs checks carried out on your documents and goods.

Decide how you’re going to make customs declarations.
A customs declaration is a complex and lengthy document and requires a degree of knowledge in order to be correctly filled in. Getting it wrong could create delays in the supply chain. Customs agents and freight forwarders can help with this.

Are your imported goods eligible for staged controls?
Most traders with a good compliance record will be able to initially provide simplified customs declarations on most goods for up to 6 months after 1 January 2021. Full customs declarations will be required for controlled goods, such as alcohol and tobacco.

Check the UK’s tariff tables and consider how your trade will be affected.
From 1 January 2021, there will be new rates of Customs Duty for imports into the Isle of Man and businesses don’t want to pay any more import taxes than necessary.

Decide how you will account for import VAT when you make a customs declaration.
From 1 January 2021, businesses will be able to use postponed VAT accounting to account for import VAT on their VAT Return for goods imported from anywhere in the world. This is a welcomed way to reduce the cost burden on businesses. There are changes to how Import VAT will be collected on consignments that do not exceed £135 in value.

And finally, do you trade with Northern Ireland?
From 1 January 2021, the process for moving goods between Northern Ireland and Great Britain and the Isle of Man will be unique and if this affects your business, you should familiarise yourself with the formalities.

There is still time to prepare for Brexit and if you would like to discuss this further and actions you can take, please get in touch.