The UK left the EU at 11pm on 31 January 2020, entering a transitional period that expired on 31 December 2020. During this transition period, the UK and EU negotiated a permanent trade and cooperation agreement ("TCA"). The TCA was signed on 24 December 2020, given Royal Assent on 31 December 2020, and approved by the European Parliament in 27 April 2021.
A customs transitional arrangement was put in place until 1 July 2021. During that time, traders importing goods from the EU to the UK could defer submitting their customs declarations and paying import duties to HMRC for up to six months. This arrangement simplified or avoided most import controls during the early months of the new situation. It was designed to facilitate inward trade during the COVID-19 health crisis, and to avoid major disruptions in domestic supply chains in the short term. The UK Government subsequently postponed the expiry of this period in relation to import checks on goods travelling from the EU to the UK until the end of 2021 in order to avoid supply issues during the ongoing Covid crisis.
These interim measures are now finally being withdrawn, meaning the full impact of Brexit on trading will shortly materialise – as of 1 January 2022. This note summarises recent Government guidance, and is relevant to anyone importing or exporting goods between the UK and EU.
Customs declarations
The Standard Process
It will not be possible to delay making import customs declarations. Most customers will have to make declarations, and pay relevant tariffs, at the point of import.
Importers should consider now how they are going to submit their customs declarations and pay any duties that are due. One option is to appoint an intermediary, such as a customs agent, to deal with your declarations on your behalf. Alternatively, you can submit them yourself.
For more information, find out how to get someone to deal with customs for you.
The 'Simplified Declarations' Process
The ‘Simplified Declarations’ process allows for goods to be released directly to a specified customs procedure without having to provide a full customs declaration at the point of release.
Importers require authorisation to use the Simplified Declarations process. This authorisation can take up to 60 calendar days to complete. A Duty Deferment Account is also required.
For more information, find out how to apply to use simplified declarations for imports.
Know your country codes
Under both the standard and simplified processes you must use the correct country code for the country of origin and the country of dispatch when you complete your customs declaration. For EU countries, the individual country code of the relevant member state should be used. The EU country code must not be used, and will be removed from systems shortly.
Border controls
Ports and other border locations will be responsible for controlling goods moving between Great Britain and the EU. This means that goods will not be released into circulation unless they have a valid declaration and have received customs clearance. In most cases, goods that lack the necessary paperwork will not be able to leave the port.
From 1 January 2022, goods may be directed to an Inland Border Facility for documentary or physical checks if these checks cannot be done at the border.
Importers must also submit an “arrived” export declaration if goods are moving through one of the border locations that uses the arrived exports process.
From 1 January 2022 failure to follow the correct process will mean goods may not be permitted to leave the country, and may be turned away, as they will not hold export clearance.
Importers using a service such as a courier or freight forwarder to move goods will need to check their provider's terms and conditions to confirm who will be responsible for making the declarations, and what other information they will need from you to do this.
Rules of origin – for imports and exports
Under the TCA, some goods benefit from a reduced rate of Customs Duty (referred to as a tariff preference). To obtain such preference there needs to be proof that goods:
- imported from the EU into the UK originated in the EU
- exported to the EU from the UK originated in the UK
In this context the country from which goods ‘originate’ is the country in which the goods (or the materials, parts or ingredients used to make them) were produced or manufactured. It is not where the goods have been shipped or bought from. The product specific rules of origin requirements are set out in the TCA.
UK and EU importers can claim tariff preference if they have one of the following proofs of origin:
- a statement on origin – this must be made out by the exporter to confirm that the product originates in the UK or EU;
- the importer’s knowledge – this option allows the importer to claim tariff preference based on their own knowledge of where the goods they’re importing originate from.
Exporters to the EU who provide the EU importer with a statement of origin may also need to have a supplier declaration in place. These are needed to confirm the origin of the goods being exported when the manufacturer's confirmation alone is not enough to meet the product specific rules of origin.
From 1 January 2022 supplier declarations must be made (where required) at the time goods are exported. Failure to do so may mean that the EU customer will be liable to pay the full (non-preferential) rate of Customs Duty. Fines may also be levied by HMRC.
More detailed guidance can be found on the UK government website here. Even if goods imported from the EU are eligible for tariff preference, normal VAT rules will still apply.
Postponed VAT Accounting
VAT-registered importers can continue to use Postponed VAT Accounting (PVA) on all customs declarations that require importers to account for import VAT, including supplementary declarations, unless HMRC have stated otherwise. PVA has already provided significant cash flow benefits for thousands of businesses, and HMRC expects most businesses will choose to use it.
For more information, check when you can account for import VAT on your VAT Return.
Commodity codes
Commodity codes are used worldwide to classify goods being imported or exported. They are standardised up to 6-digits, and are reviewed by the World Customs Organisation every 5 years. Following the end of the latest review, the UK codes will be changing on 1 January 2022.
Read our guidance on finding commodity codes for imports into or exports out of the UK which includes information on using the ‘Trade Tariff Tool’ to look up the correct commodity codes.
You can also check the Trade Tariff news page.
Further changes from 1 July 2022
Further changes to trade laws and guidance coming mid-year include:
- requirements for full safety and security declarations for all imports
- new requirements for Export Health Certificates
- requirements for Phytosanitary Certificates; and
- physical checks on sanitary and phytosanitary goods at Border Control Posts
We will be reporting on these once details have been published.