Top Ten Post-Brexit Importing Tips

With the UK now past the end of the Brexit transition period, many businesses are wondering how to navigate the post-Brexit trading rules. Many companies remain confused regarding the new trading regulations, requiring clarification and advice on vital issues, including imports and exports.

Halo Financial has brought together 10 top tips from the UK government on importing goods to and from the European Union to help shed light on the new post-Brexit trading regulations in 2021.

1. Get a UK Economic Operator Registration and Identification number

Businesses who want to trade with the European Union must apply for a UK Economic Operator Registration and Identification (EORI) number. Some may also need to obtain a European EORI number. The EORI number is an identifier in all customs procedures and is mandatory for importers and exporters. It must be quoted in an Entry Summary Declaration or Exit Summary Declaration. It also should be used when contacting HMRC about customs. The application form differs, depending on your business circumstances, including whether you are registered for VAT. The form should take around 10 minutes to complete and the EORI number usually arrives within three working days by email. However, if you are a trader in Northern Ireland and only import or export goods with the Republic of Ireland across the Northern Ireland–Ireland land border, you do not need an EORI number.

2. Understand commodity codes

Commodity codes are standard classification codes for products and services that show where money is spent within a company. They identify goods and services for import and export in international commerce.  Businesses are legally responsible for the correct tariff classification of goods. All imports or exports (including goods sent to the UK from abroad) must be declared to HM Revenue & Customs (HMRC) using a commodity code. The codes are used in declarations, in checking you are paying the correct duty and knowing whether you need an import/export licence. Click this link for product classification guides. Commodity codes can be found in Trade Tariff lists, along with duty and VAT rates. Here is more guidance on some goods that can be difficult to classify. You can also email HMRC for advice at classification.enquiries@hmrc.gsi.gov.uk.

3. Know the value of your goods

The value of the goods is necessary to determine the level of customs duty applicable. You can calculate the value of the goods by using one of six methods. Businesses are advised to start at Method 1 – based on transaction value – and to move on to Method 2 if it does not apply and so on. Transaction value is the price paid or payable by the buyer to the seller for the goods when sold for export to the UK in accordance with specific rules. Find a full list and explanation of the valuation methods here.

4. Are your goods prohibited or restricted?

Some goods are restricted and businesses need a special licence to bring them into the UK. For instance, licences are needed for the import and export of military and para-military goods, dual-use and technology, artworks, plants and animals, medicines and chemicals. Here is a list of banned and restricted goods. For more guidance on import and export licences, click here.

5. Know and state the origin of your goods

You will need to know the origin of your goods to discover if they are exempt from customs duty under international tariff preference agreements. There are two major categories – those goods obtained or produced in one country and those made in more than one country. The second category is more complex. Here is the full guidance on the origin of imported and exported goods.

6. Investigate special customs procedures and duty relief

There are several special customs procedures available to qualifying businesses, which can carry duty relief. These include:

• Transitional Simplified Procedures(TSP)
• Storage comprising of Customs Warehousing(CW)
• Temporary Admissionand End Use
• Inward Processingand Outward Processing

To use special procedures, you must get prior authorisation from HMRC. There is more information about special procedures in Notice 3001.

7. Get to grips with customs procedure codes

Customs procedure codes (CPCs) identify the reason for importation and exportation of goods using a seven-digit code. The CPC is based on a 2-digit community code which identifies a customs procedure, such as removal from warehouse, entry to free zone, and export under Outward Processing Relief. Here is more information about customs procedure codes, with examples.

8. Declare imports to customs

Businesses can make their own customs declarations by using a Single Administrative Document (SAD), form C88 for the importation and exportation of goods. This can be done electronically. You can also employ a broker or agent to make the declarations on your behalf. You could use a freight forwarder, who move goods around the world on behalf of importers and exporters and handle customs clearance. More details can be obtained from the British International Freight Association. Express couriers or Fast Parcel Operators (FPA) may also do the same. Customs agents and brokers can also ensure goods can be cleared through customs on route to delivery in the UK. A customs agent/broker can either act as a direct representative or indirect representative.  If you use a third party, you must outline whether the third party is empowered to act as a direct or indirect representative in writing.

9. Pay import duty and VAT

You may need to pay import duty and VAT depending on the classification of the goods and where they come from. Some goods benefit from a duty suspensions, whilst some goods may also be liable to additional duties, including anti-dumping duties.

Goods aren’t normally released by HMRC until all the charges due are paid. Exceptions to this include if the importer of the goods takes advantage of duty deferment. Here are more details about import duty in general.

10. Keep records

You are required to keep records for all traded goods you declare to HMRC for up to six years. This is for duty and tax purposes and for government statistics. Here are some tips about archiving your paperwork.

Excise duty

There are also a few other things for importers. to consider. The first is excise duty. This is chargeable on some goods on to of customs duty. Here is a  list of goods liable for excise duty.

Becoming an Authorised Economic Operator

Authorised Economic Operator (AEO) status is an internationally-recognised quality mark indicating your role in the international supply chain is secure and your customs controls and procedures are efficient and compliant. However, only businesses that are heavily involved in importing and exporting are likely to benefit.

Businesses can apply for AEO status for customs simplification (AEOC), AEO status for security and safety (AEOS) or both. If you hold AEO status you can obtain certain benefits. These include:

• A lower risk score which will be incorporated into customs’ risk management systems and be used to determine the frequency of customs physical and documentary checks
• Consignments may be fast tracked through customs controls. Holding an AEO security and safety authorisation does not mean that your consignments will not be subject to examination for prohibited or restricted goods or on behalf of other government agencies. However, if it is selected for examination it will receive priority over non AEOs
• Recognised status across the EU
• An industry ‘kite mark’ and useful marketing tool
• Potential for reciprocal arrangements and mutual recognition with countries outside the EU, for example, USA or trading partners that have adopted the WCO Safe framework.

For more information on the application process, benefits, and more, see Notice 117.