Following the UK’s exit from the EU on the 31st January 2020, there have been significant changes implemented in importing and exporting that you must adhere to, in order to keep your business running smoothly. Here’s our guide to following importing and exporting rules following the end of the Brexit transition period.
EORI
Businesses have needed an EORI (Economic Operators Registration and Identification) number to move goods between the UK and non-EU places. It is a one-of-a-kind ID code used to track and register customs data in the EU, and from January 1, 2021, you will also need an EORI number to import or export goods to and from the EU. If your business provides services rather than goods, you won’t need one.
Registering for an EORI can be done as a business or an individual, and you’ll need your VAT number and date of registration, National Insurance number (if you’re an individual), Unique Taxpayer Reference, business start date and Standard Industrial Classification (SIC) code and Government Gateway user ID and password handy.
Declaring Goods
If you’re a UK based company trading with the EU, you’ll now have to make customs declarations. These declarations can be submitted electronically through the Customs Handling of Import and Export Freight system. An easier way to do this, as it can be quite complicated, is to hire a person or business to act as your representative and make a customs declaration on your behalf.
When you complete your import declaration, you’re required to indicate the value of your goods. This is required for the calculation of the duty and VAT you need to pay, as well as for trade statistics.
Tax / VAT
The standard VAT rate is 20% for most goods and services, From 1 January 2021, the new UK Global Tariff will apply to all goods your business imports to the UK, unless certain exemptions apply. This UK Global Tariff replaces the current Trade Tariff.
Licenses, certificates and labelling
After the transition period expires, you will need to get a licence or a certificate in order to import or export certain items to and from the United Kingdom. You may also be required to pay an inspection fee for some products before bringing them into the UK. To see the full list of products this rule applies to, see the official government website here: https://www.gov.uk/import-goods-into-uk.
Hidden Costs of Import/Export
When importing and exporting, being aware of any hidden costs is crucial. Importers and exporters can easily overlook something and wind up paying huge unexpected fees when their final invoices arrive. To help first-timers, we’ve put together a list of hidden costs associated with shipping. Unfortunately, we can’t account for fees that individual companies or people may ask – however, the hidden charges you’ll most likely find are listed here.
Customs Clearance – Once the goods have reached a port in the UK, the customs department assesses it. Customs checks if the goods that have arrived are compliant with UK standards and have the necessary paperwork attached. Depending on what you’re importing you might need to have an import license, adhere to trade standards, or be subject to anti-dumping duty or need additional certifications. All of these things can incur costs, so it’s important you are in the know.
Extra Delivery Costs – This one seems pretty straightforward, however depending on the size of your item, you may need help moving your import. If you don’t have any heavy machinery lying around to de-load your items, you’d need to pay extra charges for the ‘extra delivery costs’.
To stop this from happening, if you need extra assistance when receiving your import, make sure that’s either stated when arranging delivery or hire a third party to be at hand when your goods arrive.
Storage Costs – These fines may apply if your products are held at a port, airport, or land border for longer than 3-5 days. Each country has its own set of rules and fees. The reason for your goods getting stuck could be: Your documents are missing, incomplete, or incorrect, you have not paid the proper taxes and duties, you don’t have the correct import permit, or your buyer was unaware of the shipment and did not complete customs clearance on time.
To avoid this, check that all of your documentation and permits are in order. If you suspect you may need to keep your products, call your freight forwarder so they can request that the commodities be placed in a bonded warehouse.
Duties and taxes – Most importers and exporters are aware that duties and taxes exist, but they rarely realise how much they owe in tariffs and taxes. Of course, this varies depending on the country and the type of goods. It’s important to do your research, as this is quite a case-by-case basis, and you don’t want a huge unexpected bill!
Deferment charges – When your goods arrive at your destination port, the shipping company pays the UK duty and VAT charges for a fee. The shipping company then bills you for the UK duty, VAT and a percentage for handling these fees.