As of the 1st January 2021, Brexit becomes effective and the UK will leave the EU Customs Union.
As a result of this, any movement of goods between the UK and EU-member states will be treated like an import or export, subject to specific rules, duties and customs declarations.
This is closely tied to the upcoming changes in VAT rules, which we have summarised on a separate page, as well in-depth analysis in a downloadable paper.
Below is a summary of the key changes around import/export that will come into force when the Brexit transition period ends on 31st December 2020.
Key Changes for Import/Export
- Importers & Exporters will need an EORI number starting with GB
- Importers & Exporters will need to complete customs declarations
- Imports will be subjects to trade tariffs
- Certain categories of goods will require licenses and certificates
- Rules around excise goods will apply to trades with the EU
- Rules around VAT are also changing
Importers & Exporters will need an EORI number starting with GB
The first actionable steps for businesses wishing to move goods between the UK and the EU in 2021 is to obtain an EORI number starting with GB.
This will be required to fill customs declarations, and eventually make sure that the imported/exported goods are cleared.
Businesses should apply for an EORI number on the UK Government website. It can take up to a week to obtain one.
Some may also need an EORI number starting with EU, if they need to fill out customs declarations in a EU-member state.
Importers & Exporters will need to complete customs declarations
Starting from 1st January 2021, businesses trading with the EU will be required to complete customs declarations for their imports and exports.
It is common to appoint a third party to deal with customs declarations, as the procedures involved can be rather complex and sometimes require specialised software.
Customs declarations are normally submitted through the Customs Handling of Import and Export Freight (CHIEF) system.
In order to import goods into the UK, businesses should apply for access to CHIEF or buy compatible software that can submit declarations through CHIEF.
Normally, a full import declaration is submitted as soon as the goods enter the UK. However, we recommend that businesses apply to use simplified import declarations or check if they can delay their declarations by up to 6 months from 1st January 2021.
Exporters who choose to complete custom declarations themselves, need to register for the National Export System. This will require an EORI number, a request for CHIEF access, as well as Government Gateway credentials.
Through the System, businesses will be able to submit a full export declaration electronically.
Imports will be subjects to trade tariffs
Starting from 1st January 2021, the UK Global Tariff will apply to all goods imported into the UK.
Certain imports may not be subject to the UK Global Tariff, such as:
- Imports from developing countries under the Generalised Scheme of Preferences;
- Imports from a country that has a trade agreement with the UK;
- Imports with a duty or tariff suspension operated by the UK.
Businesses that import goods in the UK should check the applicable Global Tariff using the tool available on GOV.UK. This allows users to search for a specific category of goods and see the applicable tariff, as well as how this will change from 1st January 2021.
Certain categories of goods will require licenses and certificates
Certain categories of imports/exports require special licenses or certificates from the companies involved in their movement.
For import, these include animals, plants, food and agricultural products, as well as drugs and certain chemicals. Licences for export are required for the same product categories, with the addition of diamonds, cultural goods, and controlled goods including firearms.
Most businesses that already import/export these product categories are already prepared, as the same licences and certificates are currently required for non-EU trade. The main upcoming change is that the same documentation will be required to trade with EU-countries as well, starting on 1st January 2021.
Categories of goods including food, animal and vegetable produce must also adhere to certain labelling, marking and marketing standards.
Rules around excise goods will apply to trades with the EU
Excise goods such as alcohol and tobacco are subject to special rules that control their movement. The same rules that already apply to trade of such goods with non-EU countries will apply to all imports and exports to or from the UK starting on 1st January 2021.
Movement within the UK must be tracked using the Excise Movement and Control System (EMCS).
Businesses exporting excise goods, will be required to submit an electronic export declaration through the National Export System (NES) from 1st of January.
Businesses importing excise goods from the EU from 1st January 2021 will be asked to complete a customs declaration. Some excise goods are eligible for Customs Freight Simplified Procedures (CFSP), as long as the importer uses a duty deferment account.
Rules around VAT are also changing
Movement of goods being classed as an import or an export has implications for the VAT liability of the companies involved.
We collated a list of the Key Changes for VAT after the transition period ends on 31st December 2020. For a more in-depth analysis, we recommend downloading our VAT Expert Martin Kaney’s detailed guide to VAT changes after Brexit through the form below.
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- Brexit Import Checklist – GOV.UK
- Brexit Export Checklist – GOV.UK
- Get an EORI number starting with GB – GOV.UK
- How to make customs declarations – GOV.UK
- Import licences and certificates – GOV.UK
- Export licences and certificates – GOV.UK
- Marking, labelling and marketing standards – GOV.UK
- Exporting excise goods to the EU from 1 January 2021 – GOV.UK
- Importing excise goods from the EU from 1 January 2021 – GOV.UK
- Check UK trade tariffs from 1 January 2021 – GOV.UK
- Apply for a duty deferment account – GOV.UK
- Guidance for EU Businesses importing from the UK – GOV.UK