The 'no deal' effect for UK Importers from Europe

The UK government has published guidance for UK companies on the procedures and changes that may affect your business if the UK fails to agree a trade deal with the EU (a ‘no deal’ scenario). This will effect your business if you import from Europe. View the guidance here.

Importing from the EU

Due to the European single market the UK can currently trade with Europe without any barriers, restrictions or tariffs. In the event of a hard BREXIT (a ‘no deal’ scenario) this would change and UK companies would need to follow customs procedures for imports from Europe.

The UK government has issued the points below, which, if followed, should minimise the disruption caused by a ‘no deal’ scenario. As many UK companies will have only ever traded within Europe, non-EU procedures will be unfamiliar to them. Hopefully this article will help clarify this advice.

When importing goods from the EU, a business will need to:

• Have a valid EORI number

EORI is an acronym for Economic Operator Registration and Identification. An EORI number is assigned to importers and exporters by HMRC, and is used in the process of customs entry declarations and customs clearance for both import and export shipments travelling to or from the EU and countries outside the EU. Details can be found here.

• Make sure that their carrier has submitted an Entry Summary Declaration at the appropriate time

An Entry Summary Declaration (ENS) is a safety and security declaration for goods moving between the UK and EU. Your shipping agent / carrier will complete this. 

• Submit an import declaration to HMRC using their software, or get their customs broker, freight forwarder or logistics provider to do this for them

Import declaration / Customs Clearance

As the UK will no longer be part of the EU Single market goods arriving into the UK from Europe will require UK Customs Clearance. Your company will need to ensure your shipment is cleared through UK customs using the correct customs procedure. Your shipping agent / carrier (customs broker) will be able to process the customs entry on your behalf but there will be a customs clearance charge. Typically ￡30 - ￡50 per entry depending on the location, the shipping agent determines this cost. There are many different types of custom procedures, which depend on why the goods are entering the country: Commercial sale, Goods for Repair, Samples are to name a few. Each one has specific guidelines, which need to be followed. You will need to instruct the shipping agent on the clearance as they are acting your behalf. For more information see my other article here.

Goods Classification and HS / Commodity Codes

As part of the customs clearance, all goods entering the UK much be classified using the harmonised standard tariff. This defines the amount of import duty you pay and if there are any restrictions on the goods. At the moment the UK tariff is harmonised with the EU but after a no-deal scenario the UK would be able to set it own tariff so duty rates and restrictions could change. For more information on Goods Classification see my other article here.

• Pay Value Added Tax (VAT) and import duties including excise duty on excise goods unless the goods are entered into duty suspension (for example a customs or excise warehouse – a financial security will be required to cover the duty liability of the goods whilst they are being moved to the warehouse). Import VAT may also be due and more information regarding paying import VAT can be found in the ‘VAT for businesses if there’s no Brexit deal’ technical notice

Again this is part of the Customs clearance procedure. A commercial purchase i.e. straightforward purchase from Europe to UK is called ‘Home Use’. This would mean you are buying the goods to use or keep in the UK. Therefore you would pay the full amount of import duty and VAT upon UK customs clearance. Import Duty and VAT must be paid immediately before goods are released. If your company has a deferment account and a deferment authorisation number (DAN) you can authorise your clearing agent to use this on your behalf. If you do not have your deferment you can normally use the shipping agents but they will charge you, normally a percentage cost, so this can work out extremely expensive in the long run.

If you are moving the goods into a bonded UK warehouse you would only need to pay the duty and VAT when you remove the goods.

If the goods are only in the UK on a temporary basis because they being sent back to the UK for repair or are for an exhibition this would be cleared under a different customs procedure and you may be required to pay duty on deposit and claim it back after re-export. For more information on items being repaired view my other article here.

• Once excise goods leave a customs suspensive arrangement, they may be immediately entered into an excise duty suspension regime. A business will need to declare the goods on EMCS for onward movement via a Registered Consignor. Further information on how to do this can be found in Public Notice 197.

This only applies to excise goods – e.g. tobacco, certain oils and alcohol. For more information view Public notice 197 from HMRC here.

If you do not have the staff trained to handle these procedures I would strongly recommend you look at training courses ASAP. Training courses are available from companies such as:

• British International Freight Association (BIFA)
• Morley Consulting
• Institute of Supply Chain Management
• Chartered Institute of Logistics and Transport in the UK

People often ask where they can get training and these are just a few suggestions. Please feel free to recommend relevant training courses in the comments below.

Share this article here: https://tinyurl.com/nodealimport

Disclaimer: The views and opinions expressed in my LinkedIn profile, posts and articles represent my own views and opinions and not those of any of my current or previous employers. I write my articles in my own free time to try and benefit others - if this is useful or interesting to you please feel free to click like and share.