When the transition period ends on 31 December 2020, then UK and EU businesses will have to apply customs, excise and VAT procedures to goods traded between the UK and EU in the same way that already applies for goods exported to outside the EU.
This step-by-step guide is intended to help businesses understand the key actions they will need to carry out in order to continue trading between the UK and EU after Brexit 1 January 2021.
It is based on the existing guidance that already applies to the trade that EU and UK businesses carry out with businesses outside of the EU. The guide is for advice and guidance only and is not intended to cover all products and eventualities.
Some areas may change and businesses are advised to closely monitor relevant Government and Customs sources, many of which can be found in the useful links page.
1) Register for an EORI number
You need an EORI number in order to trade, whether you are based in the UK or EU27. These are explained here. Your customers will need to register for an EU EORI number if they do not already have one. You can obtain an EORI number by registering with the Customs authority in your country.
2) Complete and send a Power of Attorney
CMI needs written authorisation from you to enable CMI to act as a Customs Agent on your behalf. This will apply to both Export Declarations and Import Clearances. Without this we cannot move your cargo through Customs. You can obtain these from your local CMI office.
3) Find out the commodity (HS classification) code of your goods
Commodity codes classify goods so you or your Broker can fill in import declarations.
Classifying your goods correctly means that you:
If you are unsure about how to classify your products, your national customs authority will have guides available online.
4) Determine the value of your goods
The value of the goods is necessary to determine the level of customs duty applicable. The value is also used for trade statistics.
You arrive at the value of the goods by using one of six ways or ‘methods’. It is important to note that you must try Method 1 before going on to Method 2 and so on.
Method 1 is based upon the transaction value. This is the price paid or payable by the buyer to the seller for the goods when sold for export in accordance with specific rules. These rules, along with the other methods of valuation, can be found in the World Trade Organization website here.
5) Check whether your goods are prohibited or restricted in any way or whether any additional requirements are necessary
There are some goods that you can’t bring into countries. Some goods are restricted, and you will need a special licence to import them.
Licences are often needed for the import and export of military and para-military goods, dual-use and technology, artworks, plants and animals, medicines and chemicals.
For more information, please see the current guidance on prohibited and restricted goods, Import and Export Licences on your local Customs or Government website.
6) Establish the origin of the goods
Establishing the origin of the goods will help to identify whether they qualify for lower or nil customs duty.
There are two main categories of origin in the rules:
The second category is more complex as there are several criteria to follow.
Once you have clarified the origin of the goods, you can find out if they qualify for preferential treatment under a tariff preference scheme.
7) Consider whether you are eligible to use any facilitations
There are several of customs special procedures available to traders:
Before deciding whether to use a special procedure, you should research the procedure to make sure that you can meet all the obligations attached to it.
To note, the use of special procedures requires prior authorisation from HMRC (UK) or local authorities in one of the 27 EU member states.
8) Declaring your import to customs
It is possible to make your own customs declarations, but the process is complicated and only suitable for more experienced importers. Most businesses use a customs broker or agent to do this for them.
If CMI are handling your goods we can assist you with this.
If you have decided to use a Customs Broker, you must, in a formal written authorisation, outline whether the broker is empowered to act as a ‘direct’ or ‘indirect’ representative. CMI can explain this and supply the necessary authorisation forms.
If outsourcing customs to a 3rd party broker, it is important to inform CMI of this. Working with outsourced brokers can potentially result in additional delays in the process.
9) Pay duty on the goods
You might have to pay import duty depending on the classification of the goods and where they come from. Some goods benefit from a duty suspension regime. Information on this can be found on your national Customs website. Your goods might also be liable to additional duties, such as anti-dumping duties.
Goods aren’t normally released by Customs until you’ve paid all the charges due. Exceptions to this include if the importer of the goods opens an account with Customs. Conditions must be met to take advantage of this scheme which will include providing guarantees.
How to claim preferential rates of duty on goods covered in the UK's deal with the EU and how to declare goods imported into the UK on your import declaration.
Claiming Preference from EU
For goods with a value of less than €6000, we can accept a declaration of preferential origin without a REX statement.For goods valued over €6000, we will need a declaration of preferential origin with a rex statemeent (registered exporter no.) otherwise you could be liable for paying duties. You must ensure that your supplier has a REX number.
Preferential statement should look and be worded like the below example:"The exporter of the products covered by this document (customs authorisation number) declares that, except where otherwise clearly indicated, these products are of (country) preferential origin.(Place and date)(Signature of the exporter, in addition the name of the person signing the declaration has to be indicated in clear script)"
‘Importers knowledge’ allows the importer to claim preferential tariff treatment based on evidence they have obtained about the originating status of imported products. This evidence must be in the importer’s possession, be in form of supporting documents or records which may be provided by the exporter or producer and provide evidence that the product qualifies as originating.As the importer is making a claim using their own knowledge, no statement on origin has to be provided by the exporter or producer.
More information can of course be found on the GOV.UK website.