If a hard Brexit occurs, there will be no transition period and you will feel the consequences immediately. The UK will then become a 'third country' and goods will be treated no differently than if they originated in China, for example. After the Brexit, you will have to file a declaration if you import goods from the UK or transport them within the EU. Or if you export goods to the UK.
Is your business ready?
"As a supplier and sometimes freight payer, it is important to know whether your customer/relationship in the UK is using the right arrangements and has the means to declare goods (or have them declared) without delay. This avoids additional costs at the border."
The three most important steps you can take now:
- Check whether your company and your customer/relation in the UK have an EORI number
- Check whether your customer/relationship in the UK makes use of the TSP scheme.
- Check whether the goods you are importing or selling now have any restrictions if they come from a third country. For example, import duties or the validity of quality marks.
Want to read more about Brexit and simplified transition procedures?
Please read the full article below. The information in this article is of particular interest to importers in the United Kingdom.
In this article:
- A short checklist
- What is the British government doing?
- What are these simplified entry procedures?
- Does the EU also have simplified procedures?
- When can you use the simplified procedures?
- Who needs to register?
- What does a company need to register?
- Useful links
- Important: you can get help!
A short checklist
Once the United Kingdom is no longer part of the European Internal Market and the Customs Union, there is no free movement of goods. Then different trade arrangements will apply with the United Kingdom. For example, there will be extra customs checks and additional regulations for export and import. This will result in additional (digital) administration. For companies that want to import or export their goods, a short checklist:
- Get an EORI number (for a British company this starts with GB). Dutch companies can apply for or create an EORI number here.
- Make sure you can make the declaration and decide who will do it: yourself or a customs broker like MOL Logistics. If you are going to do this yourself, you need an 'Electronic Messaging Register'.
- Make it easier on yourself: sign up for simplified transition procedures.
- Prepare the correct import or export documents and check if and which licences you need. Cross-border licences will no longer be valid in the UK after Brexit. Dutch Customs has an overview of all permits, registrations, authorisations and consents.
- Find out what duties and/or taxes have to be paid.
- Check whether there are any more things need to be arranged for your type of goods (e.g. animal products or dangerous goods).
- Do the Brexit Impact Scan for a complete picture!
What is the British government doing?
The British Government has already taken various measures to ease imports into the United Kingdom. The British Revenue Agency (HMRC) has written to 145,000 VAT-registered companies that already do business with the European Union. These companies were given information about the measures they must take in the event of a hard Brexit: they can make use of simplified import procedures.
In addition, the UK announced that most products will be duty free for one year. This does not apply to all sectors: cars, for example, are exempt. In due course, a list of types of goods will be compiled and published by the British government. An extra challenge for the British customs will be to be able to distinguish the origin. Do the goods come from the 'free movement' of the EU or are they imported from China? And will there be an actual distinction in the measures to be applied and duties to be paid?
Need help with your customs matters?
What are these simplified entry procedures?
Companies that make use of the 'Transitional Simplified Procedure' (or TSP for short) can make use of simplified import procedures for eligible goods. At the border, the use of a simplified declaration is sufficient. Any payment of import duties and VAT is then made afterwards. To be eligible for this scheme, the company must be registered in the United Kingdom. A Dutch company therefore does not automatically qualify for this scheme. However, Dutch companies can, for example, be indirectly represented by a British company or register a company in the UK themselves.
Does the EU also have simplified procedures?
On the European Union side, no special measures to declare goods in a simplified manner are to be expected. For goods that are 'in transit' at the time of Brexit, there will be some measures, but that is all for now. Goods from the United Kingdom will therefore be treated like goods from any other country outside the EU immediately after the Brexit. This means that for some entrepreneurs there will undoubtedly be delays and surprises at the British border. In the Netherlands, it is important to apply for a reverse charge mechanism art. 23 with the tax authorities for VAT. This will in any case prevent the payment of VAT on import into the Netherlands. This is then transferred to the tax return of the entrepreneur.
When can you use the simplified procedures?
So the simplified procedures are really for UK companies importing goods from the EU (or for goods that have already completed EU customs formalities). Exactly how this is done depends on the type of products.
On entering the United Kingdom, there are two possibilities:
- For controlled goods (goods subject to import authorisation, or excise goods such as alcohol or tobacco, which are subject to additional duties) and for goods subject to special arrangements (e.g. temporary importation for repair): The importer has to submit a Simplified Frontier Declaration in order to be allowed to remove the goods from the border.
- For standard goods, the importer can keep his own records whereby all transactions are recorded.
After release of the goods, a full declaration still needs to be filed in ENS (Entry Summary Declaration). There are signals that for goods imported under TSP and for which no duties or other taxes need to be paid, the supplementary declaration is postponed by 6 months.
How can you register?
You can apply online for simplified transition procedures.Register here
As there is a lot of information available, we would like to share some useful links with you. In most cases, these refer to the UK government website, where the full articles can be found. These articles are kept well up to date, so you can read the most recent information.
There are several articles on the British government's website about it:
- How to arrange a simplified border declaration in detail
- How to file a supplementary declaration
- What happens after you submit your declaration
As they are the official publications of the government, the language used is quite formal.
Who needs to register?
UK companies can register for simplified transition procedures. This is possible if they have an EORI number that starts with GB, they are based in the UK and import goods from the EU into the UK. Not all UK businesses need to register but it does offer benefits in all situations. For example, moving the VAT on imports to the company's own VAT return.
The registration is not mandatory if:
- The only goods you import come into the UK directly from outside the EU.
- You opt for a special customs procedure for your goods.
Registration is not possible if:
- You are acting on behalf of a trader (i.e. if you are a freight forwarder, for example).
- Government records show that you have tax arrears, have not paid taxes or duties owed, or that your business is insolvent.
What does a company need to register?
To register a company, you need the following items:
- EORI number starting with GB.
- VAT registration number (if you have one).
- Company name and address in the United Kingdom.
Important: you can get help!
Different types of companies can help you with the customs process before and after the Brexit:
- Freight forwarders: a freight forwarder handles the clearance of goods that cross borders. They have the right software to communicate with HMRC's systems.
- Customs brokers or agents: these act as direct or indirect representatives and ensure that your goods are cleared through customs on their way to the final place of delivery in the UK.