Transition – Exports
Following transition, the UK will stop being part of the EU, EU free trade rules will no longer apply and goods going to the EU will be exports, just like to the rest of the world.
Products going to or through the EU are now crossing borders so they will need documentation, and duty may be charged, just like exporting overseas; although The Northern Ireland Protocol provides some exemptions.
Additionally, it is a good idea to check product labelling and licencing for all exports – are they UK or EU certified and is this acceptable in the country of destination.
Exporting from the UK
Customs declarations must be prepared, in advance, for goods leaving the UK. These need to be submitted electronically on the National Export System (NES), accessed via the Government Gateway.
An Exporter needs to send and an import receive those goods; you may be both but each will need EORI numbers. EU VAT may be payable on import to the EU, so who is to deal with this? Liaison in advance is necessary.
Grants are available for anyone learning or installing the new documentation systems, and the use of intermediaries as agents is highly recommended for everyone else.
Shipments without good documentation may be repatriated. Accordingly, HMRC have introduced a mandatory Kent Access Permit (KAP), for all heavy goods vehicles planning a channel crossing, so these lorries can be monitored using Goods Vehicle Movement Service (GVMS) and stopped or fined before they clog up the ports.
For goods moving between Great Britain (GB) and Northern Ireland (NI) HMRC have set up a special Trader Support Service (TSS) to facilitate use of the Northern Ireland Protocol.
In the UK and throughout the EU documentation requires reference numbers for both importer and exporter; this is called an Economic Operators Registration and Identification (EORI) number. As the UK will no longer be part of the EU, then your existing EORI number commencing GB will become a UK number; you may need to apply for a new EU EORI number if making customs declarations in the EU after transition. And there are new XI EORI numbers for trade with NI.
UK is to remain a member of Transit after transition – the Common Transit Convention (CTC) system for simplifying the transport of goods into and around Europe (and other member countries), usually by road. Goods are logged from consignee to consignor to or through offices of transit with one set of Transit Accompanying Documents (TAD) under a Customs Comprehensive Guarantee (CCG) such that
- Customs declaration are not required at each border crossing
- Duties are only paid at the end destination
- Some customs procedures may be completed away from the border(s)
You may wish to appoint fiscal representative in the EU to deal with your VAT, especially as we lose access to online recovery facilities.
Alternatively, you can register for VAT in each EU state in which you sell.
Commodity codes are world-wide codes so should not change with transition. However, do check that they are correct as they will dictate the rates of VAT and duty charged.
Do pay particular attention to the term of sale or incoterms. These will dictate who is responsible for costs at the border etc.
Triangulation, Consignments stock etc
The location of stock, especially at transition, can greatly effect necessary paperwork and duties so please review the position if you have stock at different locations.
Goods sent to the EU for repair and returned to the UK
Outward and inward processing relief rules still apply for goods imported/exported for repair or processing and returned. The ATA carnet scheme is independent of the EU so still applies for goods that temporarily move.
Selling Direct to EU Consumers
Low Value Consignment Relief (LVCR) a 22 Euro (£15) de-minims limit for charging VAT on imports into the EU –is to be abolished from 1st January 2021.
Distance selling rules are to be abolished July 2021.
A new One Stop Shop (OSS) EU Vat return is to be introduced in July 2021.
UK businesses selling to EU customers may need to register for VAT in EU and most EU countries will require the appointment of a fiscal representative.
For more information see our other blogs in this series
- What is Brexit Transition
- Licences & Certification
- Actions & Costs
Or Visit HMRC