Business after Brexit: importing and exporting for small businesses

Transport and logistics

10 December 2020

As the UK leaves the EU single market and customs union at the end of the transition period on 1 January 2021, the way businesses across the UK operate will change.

If you import or export goods to and from the EU, there are some steps you’ll need to take to keep your business operating smoothly from 2021 onwards.

Here’s AXA’s guide to small business importing and exporting rules following the end of the Brexit transition period.

How to import or export goods after Brexit

In order to move goods between the UK and non-EU countries, businesses have needed an EORI (Economic Operators Registration and Identification) number. It’s a unique ID code used to track and register customs data in the EU and, from 1 January 2021, you’ll need an EORI number to import or export goods to and from the EU too. You won’t need an EORI number if your business provides services rather than goods, and you won’t need one if your business only moves goods between the Republic of Ireland and Northern Ireland.

You can register for an EORI number as a business or an individual. For businesses based in Scotland, England or Wales, your EORI number should start with the letter ‘GB’. If you already have an EORI number but it doesn’t begin with ‘GB’, you’ll need to apply for a new one. If you import goods from Northern Ireland to Great Britain, you’ll need an EORI number which begins ‘XI’ in addition to one beginning ‘GB’.

Before applying for an EORI number, you’ll need a few things handy:

  • Your VAT number and date of registration
  • Your National Insurance number (if you’re an individual or a sole trader)
  • Unique Taxpayer Reference (UTR)
  • business start date and Standard Industrial Classification (SIC) code
  • Government Gateway user ID and password

You can apply for an EORI number here

Declaring goods

Currently, if you import or export goods to and from countries outside of Europe, as well as Switzerland, Norway, Iceland and Liechtenstein, you’ll make customs declarations. From 1 January 2021, these rules will apply if you’re a UK-based company trading with the EU too.

You can make a customs declaration yourself or you can have a customs agent or broker do it on your behalf.

Most declarations are submitted electronically through Customs Handling of Import and Export Freight (CHIEF) system. Doing this yourself means you’ll need access to the system, including buying compatible software. You can apply for access to the CHIEF system here.

Since this can be complicated and costly, an easier option is to hire a person or business to act as your representative and make a customs declaration on your behalf. This can include a customs agent or broker, a freight forwarder or a fast parcel operator.

In some cases when importing, you may be able to delay making a full declaration to the HMRC for up to six months, so long as the goods were in EU free circulation and are being imported into Great Britain (England, Scotland and Wales) free circulation between 1 January and 30 June 2021 and the goods are not controlled.

You can find more information about getting someone to declare customs for you here.

Tax, customs duties and VAT

You need to pay VAT on most goods. For example, the standard VAT rate is 20% for most goods and services, while some goods like car seats can have a reduced rate of 5% applied, and others like children’s clothes can be zero rated, meaning no VAT applies at all.

From 1 January 2021, the new UK Global Tariff will apply to all good your business imports to the UK, unless certain exemptions apply. This UK Global Tariff replaces the current Trade Tariff.

You can check the tariff that applies to the goods you import using the UK Government’s UK Global Tariff tool here.

When exporting goods outside of the UK, you may be able to charge customers VAT at 0% or ‘zero rate’, provided certain conditions are met. The conditions are different depending on whether you’re exporting directly or indirectly:

  • Direct exporting – where you export the goods in your own vehicle or through a company employed directly by you
  • Indirect exporting – where your overseas customer arranges for the collection of your goods on your behalf

A full breakdown of VAT rules for exporting goods from the UK can be found at the Government’s exporting guide here.

Licenses, certificates and labelling

After the transition period ends, you’ll need to get a license or a certificate to import or export certain goods to and from Great Britain. You might also need to pay an inspection fee for some goods before you can bring them into the UK.

Animal, plant, food and agricultural goods

This category includes:

  • live animals, animal products, high-risk food and feed
  • fish for human consumption
  • live fish and shellfish for aquaculture and ornamental purposes
  • plant and plant products
  • endangered animal and plant species, and products made from them
  • veterinary medicines
  • wood packaging
  • timber

To find out which licenses or certificate apply to your chosen goods, search the Government’s website at GOV.UK

Drugs, chemicals and waste

This category includes:

  • chemicals
  • controlled drugs
  • drug precursors
  • fluorinated gases (F gas) and ozone-depleting substances
  • nuclear materials
  • waste

To find out which licenses or certificate apply to your chosen goods, search the Government’s website at GOV.UK

Controlled goods and diamonds

This category includes:

  • military items
  • firearms
  • items used for capital punishment
  • items with dual civil and military use
  • diamonds

To find out which licenses or certificate apply to your chosen goods, search the Government’s website at GOV.UK

Alcohol and tobacco

From 1 January 2021, imports or exports of excise goods – goods like alcohol and tobacco which are subject to excise duty – will be treated the same way regardless of whether you’re dealing with the EU or from the rest of the world.

If you’re moving goods after 1 January 2021, you must complete a customs declaration and use the relevant customs procedures when they enter into the UK.

For goods like alcohol and tobacco, you can use Customs Freight Simplified Procedures (CFSP), which means you’ll be able to transport your goods without having to make a full customs declaration in advance.

Labelling

How some items are marked, labelled and marketed may have to change as well after the end of the transition period.

The rules and regulations around this are extensive and depend on the type of goods you are importing or exporting, from fruit, meat and dairy to wine, organic food and so on.

Find the items you’re looking to move using the Government website at GOV.UK

Additional advice for exporters

If your business is looking to export goods from Great Britain to the EU after January 2021, you’ll have to not only make sure that your business is ready for the changes, but that the EU-based business you’re exporting to is prepared as well.

Before sending any EU-based business your goods after 1 January, first check they can make the necessary import customs declarations. They may also need a licence or a certificate to import some types of goods.

For more information exporting to the EU after Brexit, head over to the UK Government’s Prepare to Export from Great Britain guide here.

More Brexit help and advice

For more information on the impact Brexit may have on you, your business and your insurance, head over to AXA’s dedicated Brexit guidance pages here.