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:
- Are you able to make a simplified declaration?
- Can you use Common Transit to move your goods?
- Could you benefit from applying for Authorised Economic Operator status?
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:
- If you need to apply for an export licence
- The import rules of the destination you’re exporting to
- The rules for exporting excise goods or controlled goods. You may need to obtain licences or certificates to export these goods.
- 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
- 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
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).
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.
- Lexology’s guide to Brexit and Incoterms
- Weightman’s guide to contract reviews
- Investopedia’s guide on Incoterms
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.
- HMRC’s guide to transporting goods out of the UK by road
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
Download our Ultimate Expenses Guide
Download our Ultimate Expenses Guide
A Guide to VAT for Ecommerce Businesses
Our guide covers the basics of VAT, including the different types of VAT rates, VAT registration, VAT accounting schemes and more. We also outline the post-Brexit VAT changes for ecommerce businesses, and answer FAQs these businesses have about VAT.Read more