Navigating the end of the single market

Customs Procedures for Importing Goods into the UK Post-Brexit

Since the United Kingdom formally left the European Union on January 31, 2020, the customs landscape for businesses and individuals importing goods into the UK has undergone significant changes. The end of the Brexit transition period on December 31, 2020, marked a definitive shift in the way goods are imported into the country, replacing the previous frictionless trade with the EU with new customs requirements and procedures. This article outlines the key customs procedures and considerations for importing goods into the UK following Brexit.

1. Customs Declarations and Documentation

Prior to Brexit, the UK was part of the EU Single Market, and as such, goods moving between the UK and other EU member states did not require customs declarations. However, with the UK’s departure, customs declarations are now mandatory for all goods entering or leaving the country, including those from the EU.

When importing goods into the UK, businesses must ensure that the appropriate customs declarations are completed. These declarations typically include:

Customs Entry: A formal declaration of the goods being imported, including details such as the classification, value, origin, and quantity of the goods.
Import Duty and VAT: Depending on the type of goods and their value, import duties and Value Added Tax (VAT) may be applicable. The customs authorities will determine the duty rate based on the tariff classification of the goods.
Customs Duty and VAT Payments: Importers are required to pay any applicable customs duties and VAT. The VAT is typically payable at the same rate as for domestic goods, but businesses can recover VAT if they are VAT-registered.

Businesses can use the Customs Declaration Service (CDS), which is the UK’s online platform for submitting customs declarations. Alternatively, customs brokers or freight forwarders can handle the declaration process on behalf of the importer.

2. Tariff Code and Classification

After Brexit, the UK adopted its own tariff schedule, the UK Global Tariff (UKGT), which applies to all imports not covered by a trade agreement. To calculate the correct duty rates, businesses must correctly classify their goods according to the UK Tariff. The classification involves assigning a commodity code to the goods, which determines the rate of duty and any additional import requirements.

The UK tariff is similar to the EU’s Common External Tariff (CET), but there are some differences. Therefore, businesses that were previously familiar with the EU tariff codes may need to familiarize themselves with the UK-specific tariff to avoid errors.

For goods coming from the EU, businesses should check whether they qualify for preferential treatment under the UK-EU Trade and Cooperation Agreement (TCA), which allows certain goods to enter the UK without tariffs if they meet specific rules of origin.

3. Rules of Origin and Preferential Tariffs

The UK-EU Trade and Cooperation Agreement introduced rules of origin requirements for goods traded between the UK and the EU. In order to benefit from preferential tariff treatment (i.e., reduced or zero tariffs), the goods must meet specific origin criteria. This often means that a certain percentage of the goods must have been produced or processed in the UK or the EU.

For example, for a product to qualify for preferential treatment under the TCA, it may need to demonstrate that a significant portion of its value was added in the UK or EU. This is determined through the rules of origin outlined in the agreement.

Importers must ensure that their suppliers provide accurate origin declarations to confirm whether the goods meet the required criteria. Failure to comply with these rules could result in the application of standard import duties, which would increase the cost of goods.

4. Customs Duty and VAT Exemptions

While many goods are subject to customs duties and VAT upon importation, some items are exempt or eligible for reduced rates. Common exemptions or reduced rates include:

Exemptions for certain goods: Some goods, such as books and newspapers, may be exempt from VAT.
Low-Value Consignment Relief (LVCR): Goods worth £135 or less are generally exempt from customs duties, although VAT is still applicable. This applies mainly to online purchases and imports from outside the EU.

The UK also offers reduced VAT rates for certain goods, including food, children’s clothing, and medical supplies.

5. Customs Checks and Border Inspections

Post-Brexit, there are new checks and inspections at UK borders for all goods coming from the EU, as the country is no longer part of the EU’s Customs Union. The UK Border Force is responsible for ensuring that all imports comply with UK law.

There are several types of customs checks that may be carried out:

Physical Inspections: Goods may be physically inspected to verify that they match the customs declaration and meet safety or regulatory requirements.
Documentary Checks: Importers may be asked to submit additional documentation to verify the origin, value, and nature of the goods.
Sanitary and Phytosanitary (SPS) Checks: Certain categories of goods, such as food, animal products, and plants, may require additional checks to ensure compliance with health and safety standards.

To facilitate smoother border crossings, the UK government has introduced an “import control system” for high-risk goods, which allows businesses to submit pre-arrival declarations and reduce delays at the border.

6. Post-Brexit Customs Procedures for Small and Medium-Sized Enterprises (SMEs)

Brexit’s impact on customs has been felt particularly acutely by small and medium-sized enterprises (SMEs) that may not have the resources to navigate complex customs procedures. To support SMEs, the UK government has introduced several initiatives:

Simplified Customs Procedures: SMEs can apply for simplified customs procedures to reduce the complexity of making customs declarations.
Customs Freight Simplified Procedures (CFSP): This allows businesses to make simplified customs declarations when importing or exporting goods.
Authorised Economic Operator (AEO) Status: AEO status provides businesses with trusted trader status, allowing them to benefit from reduced customs checks and delays.

Additionally, businesses can seek guidance from the HMRC (Her Majesty’s Revenue and Customs) or professional customs advisers to ensure compliance and smooth trading processes.

7. The Future of UK Customs Policy Post-Brexit

As the UK continues to adjust to life outside the EU, the customs landscape may evolve further. The UK government has indicated its intention to streamline customs processes and improve efficiency through technological innovations such as the Single Trade Window, which aims to simplify the submission of trade-related information.

The government is also reviewing the potential for future trade agreements with non-EU countries that could further impact customs procedures. These agreements may offer additional opportunities for businesses to benefit from preferential tariffs and smoother trade arrangements.

Conclusion

Post-Brexit, importing goods into the UK involves more complex customs procedures than before. Businesses must navigate new customs declarations, tariffs, and rules of origin, and they must be prepared for additional checks and inspections at the border. While the transition has posed challenges, it has also created opportunities for businesses to engage in new trade agreements and optimize their import strategies. By staying informed of the evolving customs regulations and leveraging available support, businesses can ensure compliance and continue to trade efficiently with the UK.