Importing, Exporting & Customs
From 1st January 2021, goods moving between the UK and EU, transiting between different customs territories will require customs declarations.
Imports, Exports & Customs
From 1st January 2021, goods moving between the UK and EU, transiting between different customs territories will require customs declarations, comprising:
• An inbound(import) customs declaration for goods entering the other customs territory (entering the UK or EU)
• An outbound(export) customs declaration for goods leaving one customs territory (leaving the UK or EU)
Importing from 1 January 2021
Post Brexit, businesses will have to declare any imports arriving from within the EU. The UK government have implemented new tariffs which will apply to imports, unless there is a free trade deal.
EU imports will require an import entry, although for six months the government is applying a ‘light touch’ application. This ‘light touch’ approach will be termed as Customs Freight Simplified Procedure Entry in Declarants Records (CFSP EIDR). An importer will have until 30 June to submit entries covering the period 1 January to 30 June; any duties will not become due until the entry submission date.
Post 1 July 2021, all entries for EU imports will be done at the time of importation.
Summary of the International regulations for importing
Goods cannot leave the port until they are customs cleared, this involves;• An approved import customs declaration, • Preparation and submission of documentation, such as commercial invoice, transport document. • Examination and assessment of goods (where required). • Payment of duties and VAT. • Licenses (where required).
EORI (Economic Operators Registration and Identification) Number
A customs commodity code
HM Revenue & Customs use the Commodity Code to determine the rates of duty and VAT payable on goods imported into the UK.
Exports to the EU
The European Union has ruled that after 1 January a full export entry will be required including a transit document backed by a guarantee.
Incoterms ( International Commercial Terms)
Incoterms are an internationally accepted system of trading terms for the delivery of goods. There are 11 sets of Incoterms determining responsibilities for transportation, customs declaration, paperwork, licenses and in some cases insurance of goods in transit.
Businesses must immediately look at their terms of trade, including their Incoterms as these determine responsibility for customs declarations, trade documentation, licenses and freight costs.
Incorrect customs declarations can result in penalties and fines.
Importance of international trade classifications – Community Codes
These are essential in determining:
- Any trade tariffs that apply for your goods.
- The VAT payable.
- Whether any licenses are required.
- Whether there are import or export restrictions.
VAT implicationsHM Revenue & Customs use the Commodity Code to determine the rates of duty and VAT payable on goods imported into the UK.
Imports into the UK
- In the UK Postponed VAT Accounting will be available
- as a result of this UK VAT registered businesses can account for VAT on their VAT return
- this also applies for imported goods from the Rest of the World
- you do not need to be authorised to use Postponed VAT Accounting
Imports into the EU
- UK exports will zero rate their exports for VAT, but must maintain proof of export
- Import VAT will be payable on importation unless deferment of VAT can be arranged (usually supported by a bank guarantee)
- Discussion is required with your European customers
- If selling on DDP (Delivered duty paid) terms the UK exporter is responsible for import VAT and must consider their liability (some EU countries require a fiscal representative)
Postponed VAT accounting (PVA)
PVA will apply to all UK imports of EU and non EU goods from 1 January 2021. This means that payment of import VAT is deferred, and can be accounted for on the VAT return.
Instead of paying VAT at the point of importation of goods into the UK, a business can instead report this on the VAT return. This is using a reverse charge mechanism, providing the business with a cash-flow benefit.
Post Transition Period:
Exports to the EU must be zero rated for VAT (as with Rest of World exports)
- Businesses must maintain complete Proof of Export files
There will be border controls.
- Secure brokerage capacity.
- Representation may cause difficulties, particularly when shipping to the EU.
- Consider terms of trade and the VAT implications.
- Examine factors like classification.
- Analyse potential rules of origin that might apply to UK goods and consider the impact to your supply chain.