Brexit Transition Changes: Imports and Exports

Exporting and Importing Goods to or from the EU

Although Brexit negotiations are still ongoing and the final formal Brexit deal has not yet been agreed, there are still some known changes that are happening and for which the Government has issued guidance. If you are exporting or importing goods to the EU then time is of the essence to ensure that you are prepared for the coming changes in advance of the implementation date of 1 January 2021.

Exporting goods from Great Britain (England, Wales and Scotland) to the EU

The first main known change is that from 1 January 2021, customs declarations will need to be made when exporting goods to the EU. If you are currently exporting goods to the rest of the world, including Switzerland, Norway, Iceland and Liechtenstein, you will already be following these rules so it will just be a matter of applying the same process to your EU exports.

Custom declarations can be made by the company internally or you can arrange for someone else to handle this on your behalf such as a freight forwarder, customs agent or broker and fast parcel operator.

If you are looking to submit declarations internally, most can be done electronically using the National Export System (NES), but it may be that you need to purchase a third party software that will allow you to submit. Exporters submitting declarations will also have to register for NES .  

Another known change is the requirement for an exporter to obtain a licence or certificate to export certain types of goods such as:

  • Animal, plants, food and agricultural products 
  • Chemicals and waste
  • Controlled goods – these include military items, dual-use items (items with both civil and military uses), firearms, and items that can be used for torture or capital punishment
  • Diamonds
  • Sanctions – trade sanctions, including arms embargoes and restrictions on dual-use items, financial sanctions, including asset freezes, immigration sanctions, known as travel bans

The licence or certificate required is dependent on the specific item being exported and will need to be in place prior to attempting to export goods on or after 1 January 2021.

There will also be changes in respect of the required product markings, labelling and marketing standards for food, plant, seeds and manufactured goods. As well as changes to the rules on exporting alcohol, tobacco and certain oils. Details of the specifics can be found on GOV.UK.

Importing goods from the EU to Great Britain

As with exports, from 1 January 2021, customs declarations will need to be made when importing goods from the EU. Again as with exports, if you are currently importing goods from the rest of the world, including Switzerland, Norway, Iceland and Liechtenstein, you will already be following these rules so it is again just a matter of applying the same process to your EU imports.

The options for preparing the customs declarations are the same as with exports, they can be done internally or outsourced.

If the declarations are to be done internally this can be done in most cases electronically through the Customs Handling of Import and Export Freight (CHIEF) system. An application to access CHIEF will need to be made and it may be that a third party software will need to be purchased to enable submissions.

If importing standard goods into Great Britain from the EU between 1 January and 30 June 2021, you can use ‘entry in the declarant’s records’, without getting authorisation in advance, and you do not need to make an entry summary declaration. The following steps however must be taken for this to apply:

  • Record the goods in your own records.
  • Account for the VAT in your VAT Return if you’re VAT registered.
  • Make a supplementary declaration up to 6 months after the goods were imported.

You, or someone who does your import declarations for you, will also need to have the following in place before you make your first supplementary declaration:

  • Authorisation to use simplified declarations for imports.
  • A CHIEF badge.
  • Software that works with CHIEF.
  • A duty deferment account for paying any import duties and VAT

For controlled goods you must follow the normal rules for making an import declaration.

Again, as with exports, a licence or certificate will be required to import some types of goods into the UK. You might also need to pay an inspection fee for some goods before they are allowed into the UK. This includes items such as:

  • Animal, plants, food and agricultural products 
  • Drugs, Chemicals and waste

Registration with the relevant authority will need to be done prior to importing of goods on or after 1 January 2021.

There will also be changes in respect of the required product markings, labelling and marketing standards for food, plant, seeds and manufactured goods. As well as changes to the rules on importing alcohol, tobacco and certain oils. Details of the specifics can be found on GOV.UK.

Another major change will be the requirement to pay custom duties and VAT on all imports. The rates are dependent on the imported product and details of customs duty to be levied from 1 January 2021 have been released Custom duty

Next Steps

The first step in preparing for the transition period is to obtain an EORI number. If you are a regular exporter/importer, then you will already have this. If you have not traded outside of the UK/EU before, an EORI number can be obtained via GOV.UK. In many cases EORI numbers were issued upon VAT registration, a business can check if they have an EORI number via the European Commission. For UK entities the format is GB- the company VAT registration number – 000, example GB1234569000.

Next you need to make the decision as to whether you will prepare the relevant declaration internally or if it is to be outsourced. There are grants available to help businesses with the following:

  • Training that helps your business to complete customs declarations and processes.
  • The grant will give you up to 100% of the actual costs of externally-provided training for your employees, up to a limit of £1,500 for each employee on the course.
  • It will also cover the cost of any training you run internally, up to a limit of £250 for each employee on the course.
  • Hiring new staff to help your business complete customs declarations.
  • The grant will give you £3,000 towards recruitment costs for each new employee. Upfront recruitment costs will not be covered for an employee redeployed from another part of the business, unless this is part of an external recruitment campaign.
  • You could also get up to £12,000 to cover the salary costs for each new or redeployed employee.
  • IT improvements to help your business complete customs declarations more efficiently.
  • The grant will give you 100% of the costs relating to your IT expenditure to improve the efficiency of making customs declarations.

These can be applied for online Grant Scheme.

If a third party provider is to be used, enquiries should made. Details of customs agents and fast parcel operators can be found on GOV.UK .  

If the declarations are to be done internally then registration for NES and CHIEF will need to be looked at and whether the need for third party software is required.

Other considerations will be if licences or certificates will be required and/or registering with the respective authority, which will need to be put in place, prior to the intention to import/export.

Businesses may also want to set up a duty deferment account if they import on a regular basis in order to make monthly customs duty payments, opposed to paying for individual shipments.

Additional Information

For more information on exporting or importing goods to or from the EU, please speak to Tara Lister, or email: hello@dixcartuk.com.

The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.