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Supporting Clients to Prepare for Brexit: Import and Export Considerations

Posted: 18 Nov, 2020

There are just six weeks until the end of the Brexit transition period and the way we trade with Europe will change. But with EU negotiations still ongoing there is much uncertainty and surveys have indicated that many businesses, particularly smaller ones, have done little to prepare.

But unless businesses do prepare, they are likely to experience disruption come 1st January 2021. Of course, Covid-19 has meant that in what should have been an important year to prepare for the end of the transition period, most businesses have been focusing on their survival. But now, attention must also be paid to preparing for January,

To provide some small help, we’ve put together a list of five key areas in which businesses that import goods into the UK, or export goods out of it, should be looking to prevent disruption in January and beyond. For turnaround and restructuring professionals currently supporting clients through Covid-19, we hope this provides a useful guide as to what some of your clients are, or should be, doing to get ready.

What’s changing?

Until now, businesses have been able to move their goods relatively freely within the European Union and by being part of the Customs Union, have not had to worry about import taxes when moving goods between the Member States. While VAT rules have been a consideration, in general, businesses have not come across many barriers to trading.

From 1st January the UK will be outside of the Customs Union. When crossing the UK/EU Customs border, goods will be subject to import taxes and customs declarations will need to be submitted. To ensure that products do not become stranded, businesses need to follow the correct procedures and also think about where their ‘pinch points’ might be to anticipate potential problems and deal with them before they happen.

Five Actions Businesses Can Take

1. Map out legal and physical supply chains

In order to understand where issues might occur, it is important for businesses to map out their legal and physical supply chains. Mapping out the legal supply chain is necessary to understand whether the right documentation and agreements are in place. Mapping out the physical supply chain will give an understanding of whether there are likely to be additional costs such as customs duty, additional administration such as customs declarations, or additional tax administration such as having to VAT register in another country.

2. Obtain EORI numbers

Currently, an Economic Operator Registration Identification (EORI) number can be used to facilitate transactions across the EU. But from 1st January, businesses will need to have one to move goods between the UK and the EU. Without one, businesses are likely to experience delays and incur increased costs (such as having to pay for customs storage if goods can’t be cleared). If the business already has an EORI number, check that it starts with GB, because from 1st January it will be necessary to have separate UK and EU EORI numbers.

3. Find the right commodity codes

Every customs declaration will need to include the commodity codes of each item on the declaration. The commodity code determines the amount of duty that’s paid and if an import licence is needed. With more than 15,000 codes, it’s important to assign the right code to the right product. If the business doesn’t yet know which codes apply to its products, it needs to find out.

4. Customs declarations

Whatever the outcome of the ongoing negotiations customs declarations will need to be submitted (even if a tariff-free deal is agreed). Some businesses might choose to make the declarations themselves, but customs declarations are complicated and so most will use a customs agent, courier or freight forwarder. If the business plans to do it themselves, they are likely to need to submit their declarations electronically through the Customs Handling of Import and Export Freight (CHIEF) system and will need to apply for access.

5. Prepare for VAT and duty payments

In order to pay VAT and duty, businesses need to work out the value of the goods being moved. It’s normal to pay Customs Duty or import VAT at the time goods are declared however businesses that import goods regularly may benefit from having a “duty deferment account” (DDA). This enables customs charges including customs duty, excise duty, and import VAT to be paid once a month via Direct Debit instead of being paid on individual consignments. To set up a DDA, businesses must apply for a deferment account number (DAN) and will need to be authorised by HMRC.

While the lists of actions that UK businesses importing or exporting should take to prepare for the end of the Brexit transition period will extend far beyond these five, they are a good place to start. The Government’s message for businesses has recently changed from ‘Check, Change, Go’ to ‘time is running out’ and it certainly is. Businesses need to act now to avoid disruption come January.


TMA UK is part of TMA, a global organisation that represents the interests of turnaround professionals as its members who have the skills needed to assist in these unprecedented times. If you need assistance, please contact our helpline on 0844 804 0116


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