Export is one of the areas that will change for business after the Brexit transition period ends.
If you ship to other parts of the UK or outside the EU nothing will change. However, when exporting to the EU there are a few factors to consider.
If we have a hard Brexit, we will become a third country where goods have to be cleared through customs. To deal with these changes, you need to address the following seven areas.
Get an EORI number
As with imports, you need an EORI (Economic Operator Registration Identification) number in order to export goods to the EU. An EORI has 12 digits and begins with GB.
If your business is based on services rather than goods, you might not need one. However, if you are exporting to your business area in the EU, you will still need an EORI number.
Find out more by going to the EORI Number: What It Is and How to Get or Check Out One.
Look at your commodity / tariff codes
The Harmonized System for Describing and Coding Goods or the Harmonized System (HS) contains a number of codes that you need for export to the EU. You will need these codes to fill out your customs documents.
According to PrepareforBrexit.scot, we should assume that the WTO tariffs will be introduced after a no-deal Brexit. The UK will only appear on this list after Brexit. So use another example of a country that does not trade with the EU under a Free Trade Agreement (FTA) to get an indication of the customs tariff.
Fixed-term tariffs would be introduced after a no-deal.
Align your certifications with the new rules
Your goods must pass EU rules if the UK becomes a third party. Products of animal origin are subjected to further tests. You need an export health certificate and
must enter the EU through a designated border inspection post (BIP).
Some fish products require a catch certificate, but not farmed fish. Some plants and plant products may also require a phytosanitary certificate.
Depending on what you are exporting, you may need to apply for an export license. Also check out the rules for exporting alcohol, tobacco, and firearms. It is worth checking the country or countries you are exporting to in case specific laws apply to your exported goods.
Check your product labeling
Products that you export must be properly labeled, especially if we need to reflect third country status in the UK. Products from Great Britain should also no longer have an EU label. Products labeled "organic" are subject to further EU restrictions until the UK is approved as a third country.
Decide whether you want to hire an agent for export declarations
For export declarations you either hire an agent or do it yourself.
Agents can come in various forms – carriers, brokers, and fast parcel operators. Freight forwarders can help you ship goods around the world and arrange customs clearance for you. Brokers and brokers can help ensure customs clearance.
Fast parcel operators can move parcels and freight around the world within a certain time frame. They can also take care of customs clearance if you give them written instructions. However, you need to indicate whether you are acting directly or indirectly. HMRC has a list of customs brokers to choose from.
If you want to do it yourself, you need to learn how and when to submit. You must file declarations through the Customs Clearance System for Import and Export Freight (CHIEF). First, you need to get access to CHIEF and then purchase third party software to make these statements.
To transport products in luggage or in small vehicles, you must make a declaration in advance if:
- The value of the goods is over € 900
- The goods weigh more than 1000 kg
- You are moving excise or restricted goods
- The goods require a license
- You plan to seek relief
Without making your export declarations, your goods will be held back and delayed at the border.
Your driver may only be able to take certain routes with certain checkpoints when moving certain goods or mixed loads.
You must also have a copy of your export licenses. a movement reference number (in the event of a no-deal Brexit); a Movement Reference Number or LRN if you do so in accordance with the Common Transit Convention; an ATA Carnet Document (if you are temporarily transporting goods from the UK); and a TiR cabinet document if you are moving goods in a sealed hold with a seal number.
Drivers are also required to carry vehicle documents such as vehicle documents for legal crossing of international borders, a written system of securing your vehicle (with a checklist showing that the system is being followed) and other documents such as Tacograph charts and insurance.
Decide how you want to calculate sales tax
After Brexit, an import sales tax will be charged for shipping items to the EU that are over EUR 22. Items over 150 EUR may require customs duties.
If you haven't already, choose how you'd like to calculate VAT for EU customers. In general, you have three options:
- Charge EU customers the same upfront cost so they'll have to pay VAT and duties when their shipment arrives.
- Reduce your upfront prices for EU customers to prices without VAT. Again, this leaves it up to customers to pay VAT and duties when the shipment arrives.
- Offer customers a paid delivery fee service where they pay sales tax and duties on your website so they don't have to pay anything when the shipment arrives.
Distance selling agreements will no longer apply to EU customers after Brexit. UK sales to EU consumers are valued at zero for UK VAT purposes.
What should I do now?
This is a lot to consider, especially at such a stressful time. Try to take it element by element. Once you get an idea of this, you should contact your EU customers in advance to let them know what will change and how this will affect them, especially VAT costs and possibly longer shipping times due to increased border controls.
For more information on export and other key issues, please visit the government's Brexit transition page.
How Brexit will affect your company – Import No. 1