Brexit’s Impact on Exports
In order to continue exporting goods to the EU market in a ‘no deal’ scenario, you must ensure that your company holds a UK EORI number and that the receiving importer has an EU EORI number – even if this is within the same organisation. Export declarations will be required for all goods from 1 January 2021.
Consider what the delivery terms will be in the EU Member State of destination and who is importer of record there. It is likely that distance selling from the UK will go and there will also be changes to Low Value Consignment Relief, meaning payment of import VAT and duty on most deliveries.
Where B2C sales are made, should import VAT and duty be factored into the advertised price and consider using a freight forwarder to clear the goods and pay all charges on behalf of the customer.
Supply chains should be reviewed to assess whether an EU presence might be of benefit, so that, rather than exporting from the UK, could direct import into another EU Member State, for onward delivery, be preferable. Local EU Member State rules should be checked to see whether this can be done, if not established in the EU. Where a local VAT registration, EORI, warehouse or local entity would be required, should fiscal representation also be considered.
You may be able to use the Common Transit Convention (CTC) if you are transporting goods across borders in the EU. As customs declarations would not be required at each border crossing, it will speed up the movement of the goods. In addition, duties only become payable once the goods arrive at their final destination. The New Computerised Transit System (NCTS) will allow for transit declarations to be made electronically and away from the border, simplifying procedures. The Goods Vehicle Movement Service (GVMS), which is the new border IT platform to allow trucks to declare goods ahead of reaching the border, will be introduced from January for transit movements only.
In the event that we do not reach a deal with the EU, an inspection fee may need to be paid for certain goods on entry to an EU country, together with regulatory changes to labelling and marketing of certain products. The export of live animals, plant or food products are particularly affected.
Actions
- Ensure that your company has a UK EORI number and that your importer has an EU EORI number
- Consider establishing a presence in an EU Member State
- Consider whether to register for the CTC and NCTS. If so, a guarantee will be required to cover the customs and import VAT duties whilst the goods are in transit
- Consider how customs export declarations will be submitted
- Consider importer of record into the destination Member State and incoterms
- If you export live animals, plant or food products, review whether inspection fees may be payable. Also, ensure you are following the labelling and marketing standards of exporting food and animal products. With potential increases in costs, consider whether these increases can be passed on to customers
- Consider reducing cross-border movements and plot goods movements
- Consider outsourcing processes or the potential to acquire or set up a facility in continental Europe.