Last reviewed 4 August 2020

The UK government has issued guidance on how to manage imports and exports following the end of the transitional period of leaving the EU. The transitional period ends on 31 December 2020 and the new rules come into effect on 1 January 2021. It should be noted that this guidance does not apply to goods moved from and to Northern Ireland, as Northern Ireland has its own protocol. Hence, this article will refer to Great Britain (GB) rather than the UK.

In addition, the guidance does not deal with supplies of services that have their own regime, particularly for VAT. This article only refers to the regime for imports and exports between the EU and GB, but a number of the issues (such duty deferment, the tariff, etc.) applies to imports from any country

The UK originally planned to implement full border controls on 1 January 2021 to supplies from the EU to GB and from GB to the EU, but due to the coronavirus impacting the ability for a business to prepare, the controls will be introduced in three stages. The EU will introduce full import controls on goods moving from GB to the EU from 1 January 2021.

Imports

From 1 January 2021 standard goods imported into the UK will be subject to basic customs requirements, such as the requirement to pay duty, make customs declarations and account for import VAT. Businesses have up to six months to complete customs declarations. Customs duty payments can be deferred until the declaration is made. UK Safety and Security declarations are not required on imports from the EU for the first six months.

Controlled goods (goods that require import licences) will require standard customs declarations from 1 January 2021. Controlled goods include items like Excise goods, endangered species, controlled drugs and other goods listed in Appendix C of the government’s guidance. High risk live animal and plant imports will be subject to physical checks at the point of destination or an approved premise and there is a requirement to pre-notify certain movements of these items.

Imports using the Common Transit Convention will need to follow those transit procedures; there is no phased introduction for the Common Transit Convention. The Goods Vehicle Movement Service will be introduced only for transit movements.

From April 2021, all products of animal origin (POAO) and all regulated plants and plant products will require pre-notification of import and the relevant health documentation needs to be submitted. Physical checks will continue to be conducted at the point of destination until July 2021. POAO products include meat, honey, milk and egg products.

From July 2021 all goods will require a full customs declaration at the point of import and the relevant duties will need to be paid (subject to duty deferment). This includes a requirement of make full Safety and Security declarations. Also, goods subject to sanitary and phytosanitary controls will need to be presented to Border Control Posts; checks will take place at these Border Control Posts and not the destination. From this date there will be an increase in physical checks and the taking of samples. The Goods Vehicle Movement Service will be enforced for all imports, exports and transit movements.

Exports

Exports to the EU will need to follow the full EU import procedures. The has been no indication of a phased introduction of import requirements by the EU.

The government has created a “Check how to export goods tool” which provides information on duties and procedures in 160 countries. This can be found at https://www.gov.uk/check-duties-customs-exporting. From 1 January 2021 export declarations and UK exit Safety and Security declarations will be required for all relevant goods. Exports using the Common Transit Convention will need to follow those transit procedures.

Actions to take

GB EORI number - This number is required for any business importing into or exporting from Great Britain. The application can be made at https://www.gov.uk/eori and can take a week to process.

Duty deferment – Businesses that import regularly will benefit from a Duty Deferment Account. This allows customs duty, excise duty and import VAT to be paid once a month for all imports by direct debit rather at the point of entry of the individual import. New rules mean that most businesses will not be required to provide a customs guarantee. Applications to obtain a deferment account are to be made through the government gateway and are authorised by HMRC.

Commodity codes - These are needed for goods that are imported into the UK and exported to third countries. These codes can be found at https://tinyurl.com/ImExComCd. The tariffs to be applied in the UK from 1 January 2021 can be found at https://www.gov.uk/check-tariffs-1-january-2021. The EU and other countries will apply their own duty rates. To suspend excise duty the business needs to be a registered consignee. This will enable the business to use the Excise Movement and Control System.

Account for import VAT – VAT registered business can use VAT postponed accounting for imports from 1 January 2021. Import VAT will be accounted for on the business’s VAT return. A business can use, as an alternative to postponed accounting, the supplementary declaration mechanism. Non-VAT registered businesses and those not using postponed accounting need to account for VAT using normal customs processes.

Intermediary – Some businesses may consider the need to appoint an intermediary (customs agents, Fast Parcel Operators, Freight Forwarders or brokers) to assist in the completion of customs declarations. If the business is to make declarations themselves it will be necessary to access HMRC systems and have the necessary software to enable the declarations to be made.

International driving permits – It is essential that any drivers going to the EU has the correct driving permits.

In addition, businesses should consider their supply chains and commercial arrangements. It is advisable to speak to suppliers and customers to ensure that trade is not disrupted.

Further Information

Further information can be obtained from a variety of sources. The government guidance is available at https://tinyurl.com/2021ImpExp. The government guidance is detailed (at 260 pages) and covers the requirements for specific goods and specific procedures. It is advisable that this document is read by any business that imports from the EU or exports to the EU.

Information can also be obtained from professional advisors such as accountants, customs agents, brokers and Freight Forwarders. Many small businesses may wish to use the facilities offered by these intermediaries to process their imports and exports, either permanently or whilst they learn how to manage their imports and exports.