Post-Brexit Guide: Exporting From UK to the EU

Chris Andreou

April 21, 2021

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Introduction

Ecommerce businesses haven’t had the easiest time navigating the post-Brexit changes, to say the least. You’ve had to stay up-to-date on changes to the UK’s customs landscape and VAT, and figure out the steps you need to take to adhere to new measures. 

To help you along, we’ve provided an overview of the customs procedures for exporting goods from the UK to the EU below. 

Bear in mind that this is a general guide, and isn’t a substitute for specific advice. If you need further information about VAT, feel free to reach out to our tax consultants at Forma.  

Obtain an EORI number

Businesses will require a UK EORI number—this starts with either GB or XI—to export goods out of the UK. You’ll also have to obtain the EU EORI number of the business you’re exporting to in the EU. 

If you’re transporting goods to your warehouse in the EU, you’ll need to obtain an EU EORI number. 

If you need to apply for an EORI number, bear in mind that it can take up to one week for the application to be completed.

Getting ready for exporting your goods

There are are few things you’ll need to check:

Find out if the post-Brexit changes regarding export VAT apply to your business

Following Brexit, new VAT rules relating to imports, exports, the EU VAT refund system and more have been established. 

We’ve summarised the key updates you need to know if you’re exporting from the UK in our VAT guide for ecommerce businesses. These include:

  • EC Sales Lists are no longer required for VAT-registered UK businesses supplying goods to VAT-registered customers in the EU
  • Abolition of the distance selling thresholds 
  • The UK remains in the Common Transit Convention (CTC)
  • VAT-registered UK businesses are still able to zero-rate sales of goods to EU businesses, provided that certain conditions are met. Different conditions will apply, depending on whether you’re exporting directly (where the goods are exported using your own vehicle, or through a company you employ directly) or indirectly (the collection of your goods is handled by your customer). See HMRC’s guidance on VAT for further details.  

Check the rules for exporting your goods

Depending on the type of goods you export, there may be rules, restrictions, tax or duty rates that apply, or additional exporting documents that are required. 

You will also need to check:

Additional resources:

  • Use HMRC’s online service to check the duties and customs procedures for exporting

Check that the business receiving your goods is able to import them

You need to make sure that the business receiving your goods has taken the necessary steps to adhere to the post-Brexit changes. You should check that they’ve obtained the necessary licences or certificates, or if they are able to complete the import customs declarations (if required).

Know the commodity codes of your goods

Use HMRC’s Trade Tariff tool to find the right commodity code for the goods you’re importing. If you’re engaging a customs agent or transporter, they might be able to help you with classifying your goods. 

Completing your export declarations

You’ll need to decide how you’ll complete your export declarations. 

You have the option of either completing the export declarations on your own, or through using customs intermediaries such as freight forwarders, fast parcel operators and customs agents or brokers. 

Due to the complexity of the procedures, using an intermediary is the recommended option for businesses. Refer to HMRC’s guide for further instructions on steps you need to take. 

If you choose to complete export declarations on your own, there are a few important things you need to know: 

  • National Export System (NES): NES is a system that enables export declarations to be made electronically. To register, you’ll need an EORI number and CHIEF badge role.
  • You have four options for making export declarations. You can make email, web or XML declarations. A CHIEF-compatible software for email and XML declarations. Your fourth option is to use Community Systems Providers, which are commercial entities that provide access to CHIEF for businesses. You’ll need your own export software to access the system.  

Whether you decide to use an intermediary or to complete the declarations yourself, you’ll need to prepare the following information or documents:

  • Commodity code
  • Certificates or licences required
  • Invoice
  • Proof of origin, if you’re exporting to a destination where your goods have a reduced or zero rate of duty
  • Departure point and destination
  • Consignee and consignor
  • Nature, amount and packaging of the goods
  • Method of transportation

Additional resources:

Intrastat declarations 

HMRC no longer requires Intrastat declarations for exporting goods from Great Britain to the EU. Intrastat declarations are still required if you’re exporting from Northern Ireland to the EU (until the end of the NI Protocol). 

Additional resources:

Review Incoterms 

Depending on the choice of Incoterms used in a contract, the buyer and seller will have different customs duty responsibilities. In light of the post-Brexit changes, you need to review your contracts to check if updates should be made to your contract terms and Incoterms. 

Additional resources:

Additional considerations

1. Transportation: 

You have two options: you may engage commercial transportation services, or use your own transport. 

If you opt for the latter, you need to check for the driver’s eligibility to drive overseas (they might need to have certain types of documents with them), and ensure that you have the required licences and permits. You’ll also need to be aware of the different rules each destination might impose for the transportation of specific types of goods. 

Additional resources:

2. Importer of record

If your company is acting as the importer of record (this will be the case if you’re supplying on Delivered Duty Paid (DDP)), there are several requirements you need to adhere to:

  • You’ll need to obtain an EU EORI number
  • You’ll have to pay customs duty. This can be paid at the time of import, or deferred if you apply for duty deferment in the EU
  • You’ll need to appoint an indirect representative to act as declarant on the customs declaration, if you don’t have an EU establishment
  • You may apply for simplified procedures in the EU if you have an EU establishment

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Post-Brexit Guide: Importing from EU to the UK

Ecommerce businesses haven't had the easiest time navigating the post-Brexit changes, to say the least. You've had to stay up-to-date on changes to the UK's customs landscape and VAT, and figure out the steps you need to take to adhere to new measures.

To help you along, we've provided an overview of the customs procedures for importing goods from the EU to the UK below.

Bear in mind that this is a general guide, and isn't a substitute for specific advice. If you need further information about VAT, feel free to reach out to our tax consultants at Forma.

Obtain an EORI number

Businesses will now require an EORI number-or Economic Operators Registration and Identification number-to import goods into the UK.

You'll need to check the type of EORI number you need. Depending on the location you import from or export to, you may require more than one EORI number.

If you're based in the UK, you should obtain an EORI number that begins with GB. If you already have an EORI number that doesn't with GB, you'll have to apply for a GB EORI number. If you're moving goods to or from Northern Ireland, you'll need to obtain an EORI number that begins with XI. Do note that you can't apply for an XI EORI number, unless you already have a GB EORI number.

If you need to apply for an EORI number, bear in mind that it can take up to one week for the application to be completed.

Find out if the post-Brexit changes regarding import VAT apply to your business

Following Brexit, new VAT rules relating to imports, exports, the EU VAT refund system and more have been established.

We've summarised the key changes you need to know if you're importing into the UK in our VAT guide for ecommerce businesses. These include:

  • Abolition of the Low Value Consignment Relief (LVCR)
  • Duty deferment account
  • Introduction of the £135 threshold
  • Introduction of the postponed VAT accounting.

Do note that the postponed VAT accounting is mandatory if you choose to defer the submission of customs declarations. We'll run through the details of completing your import declarations below.

Check that the business sending you goods is able to export to the UK

You need to ensure that the business sending you goods has all the necessary steps required to export to the UK. It includes:

  • Making an export declaration in their country
  • Obtaining the required EU licences or certificates
  • Having an EU EORI number
  • Having a statement of origin
  • Having a commercial invoice
  • Having a packing list

Additional resources:

Preferential tariffs and the rules of origin

The UK and EU have agreed on a free trade agreement, which came into force on 1 January 2021.

For businesses that export and import between the UK and EU, this has an important implication: the agreement provides businesses with customs duty and quota-free access to the respective markets, provided that the rules of origin are met.

To find out if you can claim a preferential rate of duty, you need to check if your goods meet the rules of origin. If the goods meet the rules, you'll need to obtain a proof of origin. The type of proof required will vary depending on the type of goods you have, where it is imported from or where the goods will be exported to.

You should also check if you're able to pay a lower rate of duty, or delay paying duty.

Additional resources:

Applying for a duty deferment account

A duty deferment account lets you delay paying customs charges such as customs duties, excise duties and import VAT (if you're not using the postponed VAT accounting system). You'll be able to make monthly payment through Direct Debit, rather than paying for individual consignments immediately upon import.

If you're importing goods on a regular basis, making monthly payments will likely be a more convenient option. There are also instances where applying for a duty deferment account is mandatory, such as when you're using the simplified frontier declaration system

Do note that the new rules for duty deferment will apply in Great Britain. While obtaining a financial guarantee was a requirement previously, businesses now have the option of applying for a guarantee waiver for their account.

Additional resources:

Import licences and certificates

Depending on the type of goods you import, you may need to obtain an import licence or certificate.

Commodity codes

Use HMRC's Trade Tariff tool to find the right commodity code for the goods you're importing.

Work out the value of your goods

When you complete your import declaration, you're required to indicate the value of your goods. This is required for the calculation of the duty and VAT you need to pay, as well as for trade statistics.

Read HMRC's guidance to learn about the different methods you can use to work out the value of your goods.

Completing your import declarations

You'll need to decide how you'll complete your import declarations.

You have the option of either completing the import declarations on your own, or through using customs intermediaries such as freight forwarders, fast parcel operators and customs agents or brokers.

Due to the complexity of the procedures, using an intermediary is the recommended option for businesses. This HMRC guide provides further instructions on steps you need to take.

If you choose to complete import declarations on your own, there are a few important things you need to know:

  • Deferring import declarations until 30 June 2021: From January 2021 till 30 June 2021, customs declarations may be deferred for imported goods from the EU. Customs payments may also be deferred until the declaration is submitted. Do note that there are exceptions (such as if you're importing controlled goods) and qualifying conditions (for instance, you'll need to be authorised by HMRC to use the simplified declaration procedure). Find out more on the HMRC guide.
  • Using the simplified declaration procedure (SDP): Depending on factors like the type of goods you're importing, you may be able use the simplified declaration procedure. See the HMRC guide for further guidance on what you need to, including instructions on how to check if you're able to use the SDP.
  • Registering for the CHIEF system: CHIEF refers to the government's Customs Handling of Import and Export Freight service. You'll need to be registered for the CHIEF system, and use software that's compatible with CHIEF. While the CHIEF service is scheduled to be replaced by the Customs Declaration Service in the future, it remains in use for the time being.

Additional resources:

Review Incoterms

Depending on the choice of Incoterms used in a contract, the buyer and seller will have different customs duty responsibilities. In light of the post-Brexit changes, you need to review your contracts to check if updates should be made to your contract terms and Incoterms.

Additional resources:

Intrastat declarations

If you're a VAT-registered business, you may need to submit monthly Intrastat returns on ‘arrivals' (goods imported from VAT-registered suppliers in EU member states) if the value of goods exceed the stipulated annual thresholds:

  • Your business receives more than £1.5 million worth of goods from the EU in any calendar year
  • Your business moves more than £250,000 worth of goods to the EU from Northern Ireland in any calendar year

If the conditions above apply, submitting Intrastat declaration is required:

  • For the rest of 2021, if you're importing into Great Britain from the EU
  • Until the end of the NI Protocol, if you're importing into Northern Ireland from the EU

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Ecommerce businesses haven't had the easiest time navigating the post-Brexit changes, to say the least. You've had to stay up-to-date on changes to the UK's customs landscape and VAT, and figure out the steps you need to take to adhere to new measures.

To help you along, we've provided an overview of the customs procedures for exporting goods from the UK to the EU below.

Bear in mind that this is a general guide, and isn't a substitute for specific advice. If you need further information about VAT, feel free to reach out to our tax consultants at Forma.

Obtain an EORI number

Businesses will require a UK EORI number-this starts with either GB or XI-to export goods out of the UK. You'll also have to obtain the EU EORI number of the business you're exporting to in the EU.

If you're transporting goods to your warehouse in the EU, you'll need to obtain an EU EORI number.

If you need to apply for an EORI number, bear in mind that it can take up to one week for the application to be completed.

Getting ready for exporting your goods

There are are few things you'll need to check:

Find out if the post-Brexit changes regarding export VAT apply to your business

Following Brexit, new VAT rules relating to imports, exports, the EU VAT refund system and more have been established.

We've summarised the key updates you need to know if you're exporting from the UK in our VAT guide for ecommerce businesses. These include:

  • EC Sales Lists are no longer required for VAT-registered UK businesses supplying goods to VAT-registered customers in the EU
  • Abolition of the distance selling thresholds
  • The UK remains in the Common Transit Convention (CTC)
  • VAT-registered UK businesses are still able to zero-rate sales of goods to EU businesses, provided that certain conditions are met. Different conditions will apply, depending on whether you're exporting directly (where the goods are exported using your own vehicle, or through a company you employ directly) or indirectly (the collection of your goods is handled by your customer). See HMRC's guidance on VAT for further details.

Check the rules for exporting your goods

Depending on the type of goods you export, there may be rules, restrictions, tax or duty rates that apply, or additional exporting documents that are required.

You will also need to check:

Additional resources:

  • Use HMRC's online service to check the duties and customs procedures for exporting

Check that the business receiving your goods is able to import them

You need to make sure that the business receiving your goods has taken the necessary steps to adhere to the post-Brexit changes. You should check that they've obtained the necessary licences or certificates, or if they are able to complete the import customs declarations (if required).

Know the commodity codes of your goods

Use HMRC's Trade Tariff tool to find the right commodity code for the goods you're importing. If you're engaging a customs agent or transporter, they might be able to help you with classifying your goods.

Completing your export declarations

You'll need to decide how you'll complete your export declarations.

You have the option of either completing the export declarations on your own, or through using customs intermediaries such as freight forwarders, fast parcel operators and customs agents or brokers.

Due to the complexity of the procedures, using an intermediary is the recommended option for businesses. Refer to HMRC's guide for further instructions on steps you need to take.

If you choose to complete export declarations on your own, there are a few important things you need to know:

  • National Export System (NES): NES is a system that enables export declarations to be made electronically. To register, you'll need an EORI number and CHIEF badge role.
  • You have four options for making export declarations. You can make email, web or XML declarations. A CHIEF-compatible software for email and XML declarations. Your fourth option is to use Community Systems Providers, which are commercial entities that provide access to CHIEF for businesses. You'll need your own export software to access the system.

Whether you decide to use an intermediary or to complete the declarations yourself, you'll need to prepare the following information or documents:

  • Commodity code
  • Certificates or licences required
  • Invoice
  • Proof of origin, if you're exporting to a destination where your goods have a reduced or zero rate of duty
  • Departure point and destination
  • Consignee and consignor
  • Nature, amount and packaging of the goods
  • Method of transportation

Additional resources:

Intrastat declarations

HMRC no longer requires Intrastat declarations for exporting goods from Great Britain to the EU. Intrastat declarations are still required if you're exporting from Northern Ireland to the EU (until the end of the NI Protocol).

Additional resources:

Review Incoterms

Depending on the choice of Incoterms used in a contract, the buyer and seller will have different customs duty responsibilities. In light of the post-Brexit changes, you need to review your contracts to check if updates should be made to your contract terms and Incoterms.

Additional resources:

Additional considerations

1. Transportation:

You have two options: you may engage commercial transportation services, or use your own transport.

If you opt for the latter, you need to check for the driver's eligibility to drive overseas (they might need to have certain types of documents with them), and ensure that you have the required licences and permits. You'll also need to be aware of the different rules each destination might impose for the transportation of specific types of goods.

Additional resources:

2. Importer of record

If your company is acting as the importer of record (this will be the case if you're supplying on Delivered Duty Paid (DDP)), there are several requirements you need to adhere to:

  • You'll need to obtain an EU EORI number
  • You'll have to pay customs duty. This can be paid at the time of import, or deferred if you apply for duty deferment in the EU
  • You'll need to appoint an indirect representative to act as declarant on the customs declaration, if you don't have an EU establishment
  • You may apply for simplified procedures in the EU if you have an EU establishment
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Exporting goods to the EU:

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This article is updated regularly as events unfold.

Enough drama and politics, in practical terms, what is actually going to happen?

Accurately predicting the future has never been easy, and the people who claim to know how to do it usually get it wrong - often due to the methodologies they have to work within.

The task gets even more convoluted with a large geopolitical development like Brexit: clear waters are muddied by personal political agendas and few people really understand things like macroeconomics, grand strategy or the development of purpose which fits history together.

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The little questions are: to what extent will Brexit inconvenience you in your business and personal life? And the answer to that one is 'not much'.

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