The trade deal between the EU and UK which concluded at the end of the Brexit transition period on 31 December 2020 ensured that the trade in goods between the two is, in the main, tariff-free. However there are still a number of changes which affect the administration of imports and exports.
Businesses (traders) moving goods in and out of the UK will be required to submit customs declarations. While UK authorities have granted a six-month grace period for these declarations, the EU implemented them with immediate effect on 1 January 2021. It is anticipated that many businesses involved in regular import and export activity will be able to secure ‘trusted trader’ status by way of the EU’s Authorised Economic Operator scheme, which offers a simplified process.
Importing goods from the EU
Traders must fulfil a number of requirements to meet the UK government’s Stage 1 Core Model:
- Hold a UK Economic Operator Registration and Identification (EORI) number
- Have a commodity code in order to classify the goods being imported and calculate any duty due
- The customs value of the goods being imported.
Between 1 January and 30 June 2021, standard goods may be imported into the UK by using a deferred declarations process, which consists of two steps:
- When goods enter the UK, the importer must note the import details in its own record, referred to as Entry in Declarants own Records (EIDR)
- They must then submit a declaration to CHIEF (Customs Handling of Import and Export of Freight), or via the Customs Declaration Service within six months of the arrival of the goods in the UK. This means that the payment of UK import duties and import VAT may also be postponed for six months.
Conditions apply to the deferred declarations process and importers should refer to the Government’s guidance, or contact their customs representative, for full details.
Importing controlled goods
The importation of controlled goods will differ according to the port of entry, so checking with the port in advance is important. At major ports with full customs control facilities, traders will have up to three hours following arrival to make the appropriate declarations. In ports which lack established customs systems, the importation of controlled goods will require declarations to be made prior to those goods leaving the EU and will require further notification to HMRC within a day of arrival.
Import VAT must be paid but there are some options:
- UK VAT-registered importers may use postponed VAT accounting (PVA), and account for import VAT in their periodic VAT return, and do not require approval to do this, but should select this option in the customs pack.
- If the UK importer is not VAT registered, (or VAT registered, but not using PVA). they must pay import VAT together with the import duties upon import into the UK, or up to 30 days later if they have a Duty Deferment Account.
Common Transit Declarations
The Common Transit Convention (CTC) established the guidelines by which organisations transport goods into the UK customs territory.
When transit movements arrive at the UK port, the goods and the Transit Accompanying Document (TAD) must be presented to the customs office of transit (unless the TAD and vehicle/trailer data were entered into the Goods Vehicle Movement Service (GVMS) before departure from the EU). However, some British ports may still choose to operate a paper-based office of transit. The transit movement ends either at a customs office of destination or at the trader’s premises if they are an authorised consignee.
There may be different requirements for goods that are imported either by accompanied luggage or small vehicles. Non-controlled commercial goods with a value of less than £1,500 can be declared online before arriving or by using a Red Point/Channel at the point of import. Controlled goods or those exceeding a value of £1,500 require a full online customs declaration prior to arrival.
Exporting goods to the EU
In preparing for the new regulations and requirements, traders are required to have:
- A UK EORI number
- Access to the safety and security (S&S) system in order to submit exit summary declarations
- Access to Customs Handling of Import and Export Freight (CHIEF) and a CHIEF badge in order to submit export customs declarations
- Understanding of how to use this new government tool to check duties and customs procedures for exports
- An EU EORI number, if undertaking any EU customs processes
The UK government has created a comprehensive step-by-step guide which ensures that UK businesses comply with all applicable processes for exporting goods, both to the EU and worldwide.