All about Brexit: how is your UK business doing?

Since 31 January 2020, the Brexit a fact. As of 1 January 2021 there are definitively new rules. Partly of companies doing business with the United Kingdom appears to be well informed of developments. Not all companies are affected but the necessary precautions. This can be done have far-reaching consequences.

What consequences does the Brexit have for doing business with and transport to and from the United Kingdom?

That depends on the negotiations that take place. In all possible scenarios, the UK will be a 'third country' for the European Union (EU) on 1 January 2021 and you will have to deal with customs formalities. This means, among other things, that border controls will take place and you will have to draw up customs documents for transport to/from the UK.

If the European Union and the United Kingdom do not reach an agreement ('no-deal'), the rules of the World Trade Organisation will apply from 1 January 2021.

Reading tip: Brexit Whitepaper

Would you like to be up to date with all the formalities surrounding Brexit and doing business with the United Kingdom in 30 minutes? Including the most important customs documents and documents of origin?

What do you need to take into account with a no-deal Brexit?

If the UK leaves the EU with a no-deal scenario, you must declare the goods for import into the UK in addition to the export declaration. The UK has indicated to use the no-deal rate in this scenario. This means that most products are duty free and are taxed at a 0% rate. You can
already see a list of some provisional import duties. These can be found via this link from the British government.

On the basis of the goods code (the so-called HS code) you can see which rate applies. If your commodity code is not in this overview, the import duty rate is 0%. To make sure you are using the correct commodity code, you can use the UK Trade Tariff Tool. As there is no possibility to make an import declaration upon arrival of the goods in the UK, you will need to make an import declaration before the goods leave the EU. The transporters or hauliers with whom your goods are going to the UK also require proof of declaration. Without this proof they will not be allowed access to the tunnel or ferry. And that can cause considerable delays.

Brexit

Tip

Whatever the final situation, our in-house customs specialists will be happy to advise you. We will also be happy to draw up the necessary documents for you. Would you like to know more about customs matters and the preparation of documents? 

In short: doing business outside the European Union

Free movement of goods has been taking place within the European Union since 1992. From the Netherlands you can transport goods (or have them transported) to other EU countries without customs checks at the border. When you export goods to a non-EU country, this is different. The shipment is then a so-called customs shipment. This means that you have to make a customs declaration and attach customs documents to the shipment and import duties have to be paid on the products. Depending on the country of destination and the type of goods, you may also have to deal with additional permits, excise duties or inspections.

Prior to transport: incoterms and VAT

When importing goods into a non-EU country, import duties and taxes often have to be paid. The amount or quantity often depends on agreements between the EU and the country in question. The European Commission collects all applicable import tariffs and other import taxes in the Market Access Database.

In order to remain competitive with domestic suppliers or with an origin that pays less import duties, you can decide to compensate this by a discount on the sales price. However, for (cross-border) transactions, it is very important to include an Incoterm2020 on your invoice that reflects how you wish to divide the costs and risks between buyer and seller. The use of EXW and DDP is not recommended in this context, although FCA and DAP are suitable.

In case of export shipments, you will have to deal with taxes both in the Netherlands and in the country of destination. In the country of destination, VAT must also be paid on the goods. This differs per country and more information can be found on the website of the Tax and Customs Administration.

In the case of the United Kingdom, after the Brexit transition period, effective from 1 January 2021, a new regime will apply. In this case, the VAT on import must be paid by the person who books the shipment in the case of courier shipments with a value of less than £135.

Export declaration

Which goods enter or leave the European Union: very important information for customs! When so-called union goods (the goods that are in free circulation in the EU) leave the EU, you therefore have to make an electronic export declaration. Only when Customs has accepted this export declaration and released it for transport may the shipment be exported. To make an export declaration, you need specific knowledge. You can purchase or develop customs declaration software to assist you in this process. You can also choose to outsource the export declaration, for example to MOL Logistics.

Formatting documents

To ensure smooth transport to non-EU countries, please enclose the appropriate documents with the shipment. Of course, you can choose to leave the layout of the documents to your logistics service provider. You can also authorise MOL Logistics to do this.

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