Brexit tips for small businesses

With 2020 having been a tough year for all, the affects of Brexit have created yet another hurdle for many UK businesses to overcome. A month on, British businesses are working out if and how they can continue selling to EU consumers.

One of the biggest, and most underestimated, impacts of Brexit has been the increase in fees that British companies are having to pay on any goods that reach Europe.

• The first; a “Brexit charge”, as the couriers are calling it, is an export fee of ￡4.50 on every parcel shipped to the EU, which is meant to cover the extra cost of administration and form filling. 
• The second; a charge of ￡5 per parcel to cover the courier's import charge
• The third; a 'disbursement charge' which covers the cost of processing at a minimum of ￡14 per parcel.

This is resulting in some British businesses facing cost increases of 25% on goods, by having to pay an extra ￡20 on each parcel shipped to the EU. This puts many in an impossible situation; absorb the costs themselves and risk going bankrupt, or increase their prices and risk pricing themselves out of the market and losing customers.

But import and export charges aren't the only problems British businesses are facing. Across the country, many shipments are facing huge delays at customs due to the sudden implementation of complicated administration and forms, which many small businesses said they've had no help preparing for. Get one thing wrong in the reams of new paperwork and goods can be impounded or fines levied. 

So what can a small business do to streamline this process?

EORI Numbers - getting your unique customs ID

The most important first step is to ensure they have an EORI (Economic Operator Registration and Identification) number, which is a unique ID code that tracks and registers customs information throughout the EU. Without an EORI exporting of goods to the EU is impossible. It can speed up the customs process and limit administration costs for the business.

For more information about EORI numbers and how to apply go to: 

https://www.gov.uk/eori

https://smallbusiness.co.uk/eori-number-2544015/

Declaration Paperwork & how to get it right first time

The second step is to establish a strong declaration system. All goods exiting the UK to the EU will require export declarations - these can be done in house or by hiring a UK customs intermediary. If you decide to do them yourself it is recommended to the the extra time to complete the NES training (National Export Systems) as incorrect paperwork can mean your goods are denied entry at the border. 

Most simple goods that don't require licensing can be cleared with simplified declarations which can be found at: https://www.gov.uk/guidance/using-simplified-declarations-for-exports?step-by-step-nav=5644f562-0af5-4d85-b112-9b0a12fd10f0

HS Tariff codes - categorising your goods

If you are registered as a business sending commercial goods you will also need to know the HS tariff code for the goods you are sending. These tariff codes are a 10 digit codes which tell customs what category yours good are part of. 

Some of the most common codes are:

Articles of apparel and clothing accessories, knitted or crocheted. | 1161-2017E

Other made up textile articles; sets; worn clothing and worn textile articles. | 1163-2017E

Toys, games and sports requisites; parts and accessories thereof. | 2095-2017E 

Miscellaneous manufactured articles.  | 2096-2017E

All HS tariff codes can be found on the WCO website at: https://www.wcoomd.org/en/topics/nomenclature/instrument-and-tools/hs-nomenclature-2017-edition/hs-nomenclature-2017-edition.aspx

How Royal Mail are making things easy

One of simplest ways to now export to the EU is if you are sending goods via Royal Mail as they have simplified the declarations forms. It's a short form which is then stuck to the front of your parcel. If the goods you are sending are worth up to ￡270 you must fill out a CN22 form, if over ￡270 the required form is the CN23. Both forms can be found on the Post Office website at 

https://www.postoffice.co.uk/mail/customs-forms

Paying duties ahead of time

If importing goods from suppliers in the EU, pay all duties and shipping fees upfront to prevent any holdings or delays through customs which could then hold up your manufacturing and selling time. This is often done through the sender so get in touch with your supplier ahead of time to make sure they are aware of any duties that may need paying before your goods reach customs.

If you are still unsure about how to export your businesses goods to the EU there are a number of websites that have put together documents which clearly layout, and explain your options with links to relevant websites. They can be found at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/951365/How_to_export_goods_from_GB_into_the_EU_from_January_2021.pdf

https://informi.co.uk/legal/21-ways-the-brexit-trade-deal-could-affect-your-business

How can Auria Group help?

At Auria, we offer a full range of business advice services to help and support you so that you can grow your businesses in a controlled and efficient manner for success. Brexit is part of the business journey, and by partnering with us, you're never alone. We'll be there every step of the way.