Should it come to a hard Brexit, there is no transition period and you will notice the consequences immediately. The United Kingdom will then become a 'third country' and goods will not be treated differently than if they originated from China, for example. After the Brexit you will have to file a declaration if you import or transport goods from the UK within the EU. Or if you export goods to the UK.
Is your company ready?
"As a supplier and sometimes a freight payer, it is important to know whether your customer/relation in the UK uses 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 right now:
- Check whether your company and your client/relationship in the UK have an EORI number.
- Check if your client/relationship in the UK uses the TSP scheme.
- Check whether the goods you are buying or selling now have restrictions if they come from a third country. Think, for example, of import duties or the validity of quality marks.
Would you like 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 quick checklist
- What does the British government do?
- What are these simplified import 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 quick checklist
Once the United Kingdom is no longer part of the European Internal Market and the Customs Union, there will no longer be free movement of goods. There will then be other trade agreements with the United Kingdom. For example, there will be additional customs controls and additional regulations for exports and imports. This provides extra (digital) administration. For companies that want to import or export their goods, there will be a short checklist:
- Provide an EORI number (for a British company this starts with GB). Dutch companies can request or compile an EORI number here.
- Make sure you can file a declaration and determine who is filing this declaration: yourself or a customs broker such as MOL Logistics. If you are going to do this yourself, you will need a 'Registration electronic messaging'.
- Make it easier on yourself: sign up for simplified transition procedures.
- Draw up the correct import or export documents and check whether and which permits are required. After Brexit, cross-border licences are no longer valid in the UK. Dutch Customs has an overview of all authorisations, registrations, consents, permissions and concordances.
- Find out what duties and/or taxes have to be paid.
- Check that there is still 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 image!
What does the British government do?
The British government has already taken several measures to ease imports into the UK. The British tax authority (HMRC) has written to 145,000 VAT-registered companies that are already doing business with the European Union. These companies received information about the measures they should take in the case of a hard Brexit: they can use 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: for example, cars are excluded. A list of types of goods will be compiled and published by the UK government in due course. This will pose an additional challenge for British Customs in distinguishing between the types of goods and their origins. Do the goods come from the 'free movement' of the EU or are they in transit from China? And do they then want to make a factual distinction in the measures to be applied and duties to be paid?
Need help with your customs affairs?
What are these simplified import procedures?
Companies using the 'Transitional Simplified Procedure' (or TSP for short) can use simplified import procedures for eligible goods. At the border, the use of a simplified declaration is sufficient. Any import duties and VAT are then paid afterwards. To be eligible for this scheme, however, the trader must be registered in the United Kingdom. This means that a Dutch company is not simply eligible for this scheme. However, Dutch companies can, for example, be represented indirectly by a British company or register a company in the UK.
Does the EU also have simplified procedures?
On the side of the European Union, no special measures to declare goods in a simplified way are to be expected. For goods that are 'in transit' at the time of Brexit, there will be some measures, but that will remain the case for the time being. Goods from the United Kingdom will therefore be treated immediately after the Brexit as goods from any other country outside the EU. 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 to the VAT authorities for a reverse charge mechanism under Article 23. This will at least prevent VAT having to be paid on importation into the Netherlands. This is then shifted to the entrepreneur's return.
When can you use the simplified procedures?
The simplified procedures are thus genuinely intended for British companies which import goods from the EU (or for goods which have already completed EU customs formalities). Exactly how this is done depends on the type of products.
Upon entry into the United Kingdom, there are two possibilities:
- For inspected goods (goods requiring a licence to import, 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 must submit a Simplified Frontier Declaration in order to be able to remove the goods from the border.
- For standard goods, the importer can keep his own records in which all transactions are recorded.
After the release of the goods, a complete declaration must still be made in ENS (Entry Summary Declaration). There are signals that for goods imported under TSP and on which no duties or other levies have to be paid, the supplementary declaration is postponed by 6 months.
How can you register?
You can sign up online for simplified transition procedures.Register here
Since there is a lot of information available, we are happy to share useful links with you. In most cases these refer to the website of the British government, where the complete articles can be found. These articles are kept up to date so that you can read the most recent information.
On the website of the British government there are several articles about it:
- How to arrange a simplified border declaration in detail
- How to submit a supplementary declaration
- What happens after you file your declaration
As they are the official publications of the government, the use of language is quite formal.
Who needs to register?
British companies can register for simplified transitional procedures. This is possible if they have an EORI number starting with GB, they are based in the UK and import goods from the EU into the UK. Incidentally, not all UK businesses need to register but it does offer benefits in all situations. For example, moving the VAT on import to their own VAT return.
Registration is not required if:
- The only goods you import come directly to the UK from outside the EU.
- You choose a special customs procedure for your goods.
Registration is not possible if:
- You are acting on behalf of a trader (e.g. if you are a freight forwarder).
- The government data shows that you have overdue tax returns, have not paid taxes or duties due or that your company is insolvent.
What does a company need to register?
In order to register a company you need the following:
- 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 arranges the customs clearance of goods crossing the border. They have the right software to communicate with the systems of HMRC.
- Customs agents or brokers: these act as direct or indirect representatives and ensure that your goods are removed by Customs on their way to the final place of delivery in the UK.