Trading between the UK and European Union has changed dramatically for British businesses.
As a business supplying to or receiving goods from the EU, you will currently be faced with the mammoth task of navigating a whole host of new Brexit rules and regulations that came into force on 1st January 2021. We are here to provide as much Brexit support for businesses as possible who are importing and exporting goods from the EU to the UK.
How can I continue to prepare my business for Brexit?
Simply by reading this guide. Wallis Shipping has been at the forefront of freight forwarding, transport and logistics since 1987 and has written this Q&A guide as a Brexit help guide for businesses who wish to continue to import goods and export goods to Europe as smoothly as possible.
Are you ready for Brexit?
There are several necessary requirements and processes that you will need to be undertaking to trade successfully with the EU. If you need assistance with your Brexit planning, you are in the right place. This Q&A guide aims to get you Brexit-ready when trading with the EU.
How will Brexit affect UK and EU imports and exports?
UK customs post-Brexit is now a different landscape than we previously knew. A free trade was agreed between Europe and the UK and came into effect on 31st December 2020.
These are some of the changes:
- an increase in customs procedures that apply to all freight movements
- Increased regulation on some animal and food based products
- The introduction of VAT on EU imports and in some cases additional duties, for certain goods being imported and exported between the UK and EU
It pays to be prepared as there has been considerable confusion on both sides of the channel. If you are new to trading with the EU, you can use our Tips for New Traders.
Is it my responsibility to deal with customs clearance post-Brexit?
This is one of the main areas where we have seen delays at borders. To save yourself a lot of hassle, ensure you have agreed with your customer or supplier who is going to be responsible for customs clearance.
You will have obligations as the supplier and your EU customer will also have obligations. Or vice-versa. Make sure your customer or supplier is well-prepared.
You will need to double check your customer is able to make the import custom declarations as needed. They may need a certificate or licence to import certain types of goods.
UK importers are responsible for declarations, any import tariffs and VAT unless goods are sold on DDP Incoterms.
How do I go about declaring my goods post-Brexit?
Currently, if you import or export goods to and from countries outside of Europe, as well as Switzerland, Norway, Iceland and Liechtenstein, you need to make customs declarations. From 1 January 2021, these rules will apply if you’re a UK-based company trading with the EU, too.
Most importers and exporters use a customs agent, broker, freight forwarder or fast parcel operator to make these declarations on their behalf. You can find more information about getting someone to declare customs for you here.
What about if I want to submit my own custom declarations after the new trade deal?
Most declarations are submitted via the Customs Handling of Import and Export Freight (CHIEF) system. Agents and brokers have the software and the system but if you want to do it yourself you can access the CHIEF system.
Can I delay making a declaration?
In some cases when importing post-Brexit, you may be able to delay making a full declaration to HM Revenue and Customs (HMRC) for up to six months. This doesn’t apply to imports of controlled goods. Full UK import controls will be in force from 1st July 2021.
What customs declarations do you need before moving goods in and out of the EU?
If you are importing goods from the EU or exporting goods to the EU, customs ‘declarations’ need to be made on your shipments.
It is expected that the UK alone will be submitting over 250 million customs declarations annually, so it is essential that the customs paperwork is completed to prevent any delays at the borders or delays on your goods arrival.
What is a T1 customs transit document?
A transit document is a document that is often required to export goods to the EU and allows free movement within EU borders without the payment of duty and VAT. The document is called a T1. Read our Glossary of Freight and Logistics Terms for further information.
Are T1 custom transit documents required to export to the EU?
Yes if you are sending a full trailer of cargo, you will need to arrange to prepare this document, unless a customs entry can be made at the first port of entry into the EU. It is important to note that there is a shortage of agents able to issue these documents because they require the backing of a financial guarantee.
What is the main problem obtaining T1 custom transit documents?
A large percentage of EU-based hauliers were not aware these documents can be required and had no counterpart in the UK to assist them.
This is causing some issues at the borders and has caused some haulage being held at EU ports.
As a result, a number of European operators are declining to enter the UK and this has caused a severe shortage of available haulage to meet the needs of both importers and exporters.
What can I do to get T1 custom transit documents after the trade deal?
Make sure your partner in the EU is aware of their responsibilities regarding transit procedures and make sure you are working with an agent who has full knowledge and experience of the T1 process.
What about if my goods are only going through Europe, and not stopping there?
If your goods are transiting through EU states but will end up outside of the EU, you will still require additional transit documentation.
What is an EORI number and why do I need one?
When moving goods between the UK and non-EU countries, you already need to have an EORI (Economic Operators Registration and Identification) number. Now with the new regulations, you will also need an EORI number for trading with the EU. You may to register for an EU EORI number if you are responsible for accounting for Duty and VAT at the EU destination.
How do I register for an EORI number online?
You can apply for an EORI number online here; either as an individual or as a business.
You will need:
- Your VAT number and date of registration
- Business start date and Standard Industrial Classification (SIC) code
- Your National Insurance number (if you’re an individual or a sole trader)
- Unique Taxpayer Reference (UTR)
- Government Gateway user ID and password
Do I need to prepare any other documentation to export to the EU?
Yes you will need to prepare a Commercial Invoice and a packing list. Our guide to the essential information required is here.
What about hazardous goods?
If you are moving goods that are hazardous to human, animal and plant health (Sanitary and Phytosanitary Controls), you will have higher requirements and will need hazardous cargo documentation and an Export Health Certificate (EHC) for food and animal products.
Do I need an export licence to export goods post-Brexit?
Only if your goods are designated as ‘dual use’. Export licenses will be required for all goods exported to the EU that may be designated as dual use. You can find out if that applies here. These are items such as machine tools, electronics, computers, marine equipment, nuclear goods and goods pertaining to aerospace industries, to name but a few.
What about exporting and importing controlled goods?
This is the same as before Brexit and is the same as for non EU trade. If you are exporting or importing excise or controlled goods, you will need the appropriate licenses. Food and products of animal origin are also subject to environmental health controls and other requirements.
What are Incoterms?
Incoterms determine obligations for GB exporters and EU importers and vice versa. Check the Incoterms with your customer and supplier and agree on who is responsible for providing which services including customs clearance.
The Incoterms will determine your responsibilities as an exporter/importer and will help calculate your costs.
We have experienced a considerable lack of understanding of Incoterms on both sides of the channel and varied interpretations of the new processes required. So, make sure you are up to speed.
For example, if your Incoterms as a GB exporter require you to complete customs formalities at the EU border, you will also need an EU EORI Number as well as a GB EORI Number.
Do I need to pay VAT on imports after Brexit?
Yes. You will need to pay import VAT on most incoming goods. The standard VAT rate for most services and goods is 20%, but some goods like car seats can have a reduced rate of 5%. Children’s clothes can be zero rated. This VAT payment can be managed by using PVA (Postponed VAT Accounting).
Do I need to charge VAT on exports after Brexit?
When exporting to the EU, you may be able to charge customers VAT at 0% or ‘zero rate’, provided certain conditions are met. The conditions are different depending on whether you’re exporting:
A full breakdown of VAT rules for exporting goods from the UK can be found at the Government’s exporting guide.
Will I need to pay duty on my imports from the EU?
The answer is not clear cut. In theory imports from the EU are duty free, subject to Rules of Origin.
In addition there are quotas on certain materials after which additional tariffs apply.
Tariff confusion has meant some delays in the import customs entry and impact on customers’ manufacturing processes.
How do I know how much duty may be applicable on my import ?
Firstly you need to check what tariff code applies to your goods. A new UK Global Tariff now applies to all goods your business imports to the UK, unless certain exemptions apply. The UK Global Tariff replaces the current Trade Tariff.
You can check the tariff that applies to the goods you import using the UK Government’s UK Global Tariff tool here. You can apply to set up an account to defer duty payments. You can also check out our Frequently Asked Questions.
I use wooden crates and pallets for my shipments to and from the EU. Are there any changes I need to be aware of post-Brexit?
Yes, big changes. All materials now have to conform to the International Standard of Phytosanitary Measures No. 15 (ISPM 15) and carry an IPPC mark. Failure to do so will result in checks and enforcement measures at destination. And possible delays.
Is product labelling of imports and exports still the same?
This is a difficult area. It depends on what goods you are dealing with. The rules are quite technical around labelling. To check labelling requirements of your specific products, cross reference this online on the HMRC government website at GOV.UK.
The UK Government’s Prepare to Export from Great Britain guide
Brexit: The new rules and Brexit Checker Tool https://www.gov.uk/transition
Ready for Brexit (made for business people by business people) https://readyforbrexit.co.uk/
Get an EORI number gov.uk/eori
Apply for Postponed Vat accounting via CDS
Rules of origin for goods moving between the UK and EU – GOV.UK (www.gov.uk)
Goods subject to Sanitary and Phytosanitary Controls will have higher requirements and need an Export Health Certificate (EHC) https://www.gov.uk/guidance/exporting-animals-and-animal-products-to-the-eu-from-1-january-2021
Subscribe to HMRC reports that detail all entries recorded under your EORI number https://www.gov.uk/guidance/mss-supporting-guidance
HMRC Brexit helpline: 0300 2000 900 (open Monday to Friday, 8am to 6pm)
Wallis commercial invoice checklist (word doc to be inserted)
Contact Wallis Shipping
If you have any queries or further questions that haven’t been answered in this guide, please get in touch with our logistics team on +44 (0)1206 751133 or firstname.lastname@example.org.