The UK government has published the Taxation (Cross-border Trade) Bill, previously referred to as the Customs Bill, which provides for the implementation of a customs regime when the UK leaves the EU. The Bill allows for a range of outcomes from the Brexit negotiations and also includes provisions should the UK leave the EU without a deal. At the moment the UK is part of the EU Customs Union which means that goods moving between the UK and other EU member states are not subject to customs checks, duties or quotas. This may change on Brexit.

A new standalone Customs regime is provided for in the Bill and is based largely on EU law. The government intends that the UK’s current customs regime will continue as normal when the UK departs the EU but notes that for traders who only trade with the EU, they may have a requirement to make customs declarations depending on the outcome of the talks.

The legislation follows on from the proposals set out in a white paper on the UK’s future customs, VAT and excise regime. The Bill allows the UK to charge varying levels of custom duties on goods as well as specifying which goods attract duties. The UK can also set preferential or additional duties as it sees fit which the UK may want to do in order to safeguard against unfair trading practices.

This Bill includes a proposal to amend the existing VAT legislation to state that import VAT will be charged on all business to business imports from outside the UK. Currently intra-EU acquisitions are zero rated for VAT purposes and the reverse charge mechanism applies.

The Bill was introduced to the House of Commons on 20 November and will now go through the usual phases of scrutiny.