How will it effect me?
The Brexit transition period will end on 31st December 2020, and new trading rules will apply from 1st January 2021. With the negotiations ongoing, we have prepared the following to help you be ready to continue shipping into the EU with Impact Express.
With a No Deal Brexit looking likely, the UK will adopt WTO standards and become what is known as a ‘Third Country’, with special rules in place for Northern Ireland.
Our main suppliers have all taken steps to ensure the continuation of services for shipments heading into and from the EU. They have started using new airports in the south, adding additional flights out of Bournemouth and Southampton Airports to mitigate the potential delays for Express shipments.
The ESU (Economy Road Service) is not available between the 26th December to 4th January 2021) Once it restarts there may be delays due to hold ups at the UK ports.
Northern Ireland Protocol
The Northern Ireland Protocol is designed to be a “fully legally- operative solution”, whereby Northern Ireland (NI) remains part
of the UK’s customs territory, but aligns with EU Single Market rules.
NI will also remain in the UK VAT system, but in alignment with EU VAT regulation (including access to the EU’s IT systems).
In practical terms, this means no customs procedures, regulatory checks or tariffs will be enforced against trade between NI and the Republic of Ireland (ROI), and vice versa.
Goods moving between GB and NI will also be tariff-free, unless they are deemed ‘at risk’ of entering the EU. Likewise, goods moving between ROI and NI that are ‘at risk’ of entering GB will also be subject to tariffs.
Northern Ireland will also become a zone 1 destination for exports and imports. However a collection in NI to GB will stay as a UK Domestic Movement until further Notice.
Changes to UK VAT
From 1 January 2021, UK VAT on goods valued up to £135 will be collected at the point of sale, and not the point of import.
This means that overseas businesses selling goods to be imported into the UK, valued between £0-135, will be required to charge and collect any VAT due at the time of sale. They must be registered for UK VAT and pay VAT using a UK VAT return.
VAT registered UK importers can still choose to account for the VAT by providing their VAT registration to the supplier. For details see the ‘Business to business sales’ section here.
Alongside this, Low Value Consignment Relief (LVCR) will be abolished, meaning VAT will be due at the time of sale on all imported goods valued £0 – £135.*
More information is available here.
Changes to EU VAT
The EU will be moving to a similar VAT collection model to that being introduced in the UK, however this will be effective from July 2021.
When goods worth up to €150 are purchased from sellers outside the EU, VAT will be charged at the time of sale.
The current €22 VAT threshold for importing goods into the EU will also be removed. This means VAT will be due on all non-document shipments from the UK to the EU.
More information is available here.
From 1 January 2021, a fee will be levied on all dutiable shipments between Great Britain and European Union countries, both inbound and outbound. With the information that is currently available, the intention is that this fee will be set at £0.25 per kg with a minimum charged amount of £4.50 per shipment. This fee may be adjusted, should circumstances change significantly.
This fee will be introduced regardless of any trade deal agreed, as the following will still apply:
- Customs requirements for all shipments between GB & EU. This results in an increase in the number of declarations, licenses, data submissions, overall processing, plus new IT systems
- Border formalities will be introduced that must be complied with, i.e. the new ‘Border Ready’ requirements in Kent
- Increased regulatory requirements restricting commodities into Europe
- Increased Bond storage facilities and associated securityThe fee is applied per kg as heavier shipments in general have morecomplex customs requirements.
- Please note that no Brexit fee will be applied to goods moving between Northern Ireland and the EU, based on current customs law, however should this customs position change, we may need to revisit this position.
Preparing for Customs in the EU
|An EORI number is an Economic Operator Registration and Identification number, required in order to release goods from Customs. You currently only need an EORI number when trading with countries outside the EU. However, a GB EORI number will be required for UK imports and exports from 2021.|
|VAT-registered businesses were automatically issued with an EORI number in September 2019. Businesses without an EORI can apply for free at www.gov.uk/eori. Numbers will be sent by email within five working days. As a priority, please inform us of your EORI number. Please also include it on Commercial Invoices to promote smooth customs processing and clearance. Please also note that an XI EORI number will be required to move goods to or from Northern Ireland to non-EU countries. The government will issue XI EORI numbers, where needed, in mid-December.|
|This is essential paperwork in order for your goods to clear Customs in the destination country. An annotated copy of this is available here. Detailed goods descriptions and HS codes for the products you’re sending must be included. It’s possible to produce a standard commercial or pro-forma invoice within our shipping tools online.|
|To clear shipments through customs on your behalf, the following must accompany your shipment: Commercial or pro-forma Invoice|
A) Any relevant licences or certificates
b) A packing list (often required by destination Customs)These documents can be submitted electronically using Paperless Trade (PLT) – or attached to your shipment where PLT is not accepted in the destination country.
|If you’re using one of our integrated shipping tools, in addition to providing Customs paperwork digitally, entering a detailed goods description, along with individual invoice line item information is also advised.This information can currently be supplied seamlessly through direct integration with our bespoke shipping tools (e.g. EDI|
|This will be essential when the EU’s new Information Control System 2 (ICS2) is introduced in March 2021. This system provides critical data for EU customs authorities, which must be submitted in advance of shipments being loaded at the country of export.Further information will follow for customers using our standard shipping tools in advance of March 2021.|
|When shipping internationally it is important to consider the content of your shipment, as documents and non- documents are treated differently. While we currently do not differentiate between the two when shipping to or from the EU, this will no longer be the case from 2021.It isn’t always obvious which category your shipment falls in to.|
|Incorrectly marked shipments could result in delays, or items being returned undelivered.|
|The goods you are sending are identifiable via a precise, internationally-recognised commodity (Harmonised System) code. This ensures the correct duties and taxes are applied by Customs. It can also be used to identify the duties and taxes applicable in each country you’re sending to, but remember: the exact rates that will apply in the EU for UK shipments are yet to be agreed.|
|To identify the commodity code for your product(s) visit the UK Government site here.Note: you must ensure the commodity code is included on your commercial / pro-forma invoice.|
Certain goods may be subject to restrictions when shipping between the UK and the EU from 2021.
- Restrictions apply to medical and dental equipment, electronics and toys, for example. Veterinary and phytosanitary inspections will also be required at a Border Control Point (BCP) for some Foodstuffs and Animal-or Plant based products.
- Check if restrictions apply to category of goods you’re sending using our country profile guidance here.
- Please be aware that the carriage of goods subject to veterinary and phytosanitary inspections at an EU BCP is suspended from 1 January 2020.
By offering a DDP service, you can bill all duty and taxes back to your account instead of your customer being charged on receipt of their parcel.