Trade In Goods

What manufacturers need to know now with a new trade relationship with the EU in place

Outlined below is the key information and Customs procedures when trading in goods with the European Union (EU) under our new relationship.

Businesses obligations for trade with the EU have changed. Companies are required to complete documentations and submit this to the relevant authorities in both GB and the EU for goods to cross the border. It should be stressed that crossing the border will require two procedures, one outbound leaving either GB or the EU and inbound entering either market.

The new agreement still requires businesses to submit the correct declarations.

With effect from 1 January 2021, goods trade between GB and EU will require the prior submission of new customs and other related documentation. The steps you need to take are similar to those that have existed for trade between the UK and the rest of the world.

Declarations in the UK need to be made through HMRC’s customs system. This records the declaration of goods shipped by land, air and sea. It allows importers, exporters and freight forwarders to complete customs information electronically and automatically checks it for errors. All export and import declarations made by UK businesses are recorded and processed by HMRC. Import declarations are required for all imports from the EU but they can be deferred for up for six months in certain circumstances from January 2021. Exporters of goods from GB to the EU are required to complete a UK customs export declaration. This may be deferred by up to 4 weeks if a simplified declaration is made up front. The deferment in submitting documents in this period is not an amnesty in preparing the relevant documents.

Outlined below is the key information and Customs procedures when trading in goods with the EU under our new relationship.

As the market surveillance authority, HMRC has the statutory powers to inspect and require the submission of all relevant trade and customs declarations.

CHIEF

CHIEF (Customs Handling of Import and Export Freight) is the HM Revenue and Customs (HMRCs) mainframe computer for Customs.

The CHIEF system records the declaration to Customs of goods by land, air and sea. It allows importers, exporters and freight forwarders to complete customs information electronically and automatically it checks for errors.

All export and import declarations made by UK businesses are recorded and processed by CHIEF.

The Customs Declaration Service (CDS) is due to replace CHIEF in the near future which will result in some changes to the current data input requirements. Further updates on this will be published by HMRC as progress is made.

The Border Operating Model between GB-EU

January 2021 marks the first stage of the UK’s new import controls on goods moving to/from GB and the EU. Stage 1 will require all traders to have; a GB EORI number, commodity codes for their goods and the customs value of goods. Traders should also consider whether they are able to, and would benefit from, using any available simplifications or facilitations, including delaying customs declarations.

There are 3 stages to the introduction of Customs formalities from January 2021, they are:

Stage 1 – from January 2021

Imports
Import declarations will be required for all imports from the EU but they can be deferred for up to 6 months in certain circumstances

Exports
Exporters of goods from GB to the EU will be required to complete a UK Customs export declaration. This may be deferred by up to 4 weeks if a simplified declaration is made upfront

Stage 2 – from April 2021

Certain categories of imported goods subject to Sanitary and Phytosanitary goods will have additional requirements placed on them (i.e. Animal products, fish and fishery products, high risk food, plants and plant products.

Stage 3 – from July 2021

All traders moving between GB and the EU will be required submit full Customs declarations and pay any relevant duties

(Note: there are special arrangements for goods moving in and out of Northern Ireland under the NI Border Model )

Government advice on both importing and exporting from January 2021

These are the key steps to be able to continue importing and exporting your goods.

Government Helpline

UK Customs & International Trade Helpline - 0300 322 9434 – UK Wide

Economic Operator Registration and Identification (EORI) number

If you do not already have an EORI number, you need to register. HMRC uses this number to identify your business and record your exports and imports. To move goods into or out of GB you will need a GB EORI number.

(Note: you may have been auto-enrolled into the EORI system and you can check with HMRC whether you already have an EORI number)

You’ll need an EORI number that starts with GB. If you do not already have one, you can apply now, even if you do not use it.

Your EORI number looks like this;

GB123456789000

(Member State of registration, VAT Number plus 000)

You may also need a separate EORI number if you move goods to or from Northern Ireland; this number will start with XI not GB.

For more information on Northern Ireland please see our guidance here

Find the Commodity Code(s) for your goods

Referred to as ‘classification’ the Commodity Code provides a description of the goods being exported, expressed as an 8-digit number for exports and 10-digits for imports.
All exports and imports must be declared using a commodity code and as the exporter/importer you are legally responsible for providing the correct tariff classification of your goods.

Classifying your goods correctly means you know whether;

an export licence is required
any preferential duty rates can be applied
your goods are covered by measures such as anti-dumping duties or tariff quotas

Calculate the correct value of the goods

Each member country of the World Trade Organisation (WTO) sets out the tariff rates for goods imported into their country. The WTO provides the international framework for the conduct, regulation and dispute mechanism that supports international trade. It is vital that you understand what needs to be included for the customs tariff values and valuation. Failure to provide accurate information and relevant documentation to relevant customs authorities can lead to investigation and criminal actions.

Decide who will make the electronic export declaration

Businesses can use a customs broker, agent, or freight forwarder to submit the necessary customs declarations. This can make exporting and importing simpler and faster.

Alternatively, you can make self-declarations to the CHIEF system by obtaining the necessary software and by using the National Export System (NES) for export declarations.

Consider the Special and Simplified Procedures on offer at HMRC

HMRC offer a selection of Special Procedures (Customs Warehouse, Inward Processing, Outward Processing etc.) which can help UK businesses mitigate the cost associated with importing and exporting goods and Simplified Procedures (Customs Freight Simplified Procedure, Transit) which can help speed up clearance at the border.

Review the delivery terms (Incoterms) attached to your imports and exports

Incoterms or delivery terms in commercial contracts or agreements can determine which of the parties involved is responsible for transport, duty and declaration costs. These should be reviewed immediately if you have not already done so to establish whether these liabilities fall to your business.

Check your goods meet the rules of origin

Rules to establish the country of origin of imported and exported goods and to help identify those which qualify for lower or nil Customs Duty.

The Rules of Origin explain which goods are covered in preference agreements and how their ‘originating status’ is applied.

This applies to all preference agreements and the Generalised Scheme of Preferences.

View more information here

Commodity Codes and Tariffs

The Department for International Trade (DIT) has launched a new commodity code checker tool for businesses and organisations importing into the UK.

DIT Trade Tariff: look up commodity codes, duty and VAT rates

Make UK Toolkit

The Brexit Toolkit is designed to help businesses deal with trade and migration issues arising as a result of Brexit. Our self-audit trade tool delivers a report to help companies plan for the cost of trading with the EU. And now we have a new migration section, which helps businesses future proof their workforce against new legislation and settlement rules.

Access the toolkit here

The UK and EU have agreed a Trade & Cooperation Agreement. The agreement came into effect on 1 January 2021. The rules for trading with the EU have changed and outlined below are the key aspects you will need to know, what you must do in order to continue to trade effectively and how to take advantage of the trade easements which are available.

(Please note this guidance sets out the requirements for trade between Great Britain (GB) and the EU, there will be different requirements for trade between Northern Ireland and the EU and between GB and NI)