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From January 2021 the rules for trading with the EU will change as the transition period formally ends. Outlined below are the key aspects you will need to know, the preparations you will need to make to continue to trade effectively and how to take advantage of the trade easements which are available.

(Please note this guidance sets out the requirements for trade between Great Britain and the EU, there will be different requirements for trade between Northern Ireland and the EU and between Great Britain and Northern Ireland)

 

What manufacturers need to be prepared for goods trade from January 1st 2021

Outlined below are the key aspects you will need to know to help you understand what you need to do in preparation for changes to Customs procedures when trading in goods with the European Union (EU) from January 2021

CHIEF

CHIEF (Customs Handling of Import and Export Freight) is the HM Revenue and Customs (HMRCs) mainframe computer for Customs.

The CHIEF system records the declaration to Customs of goods by land, air and sea. It allows importers, exporters and freight forwarders to complete customs information electronically and automatically it checks for errors.

All export and import declarations made by UK businesses are recorded and processed by CHIEF.

The Customs Declaration Service (CDS) is due to replace CHIEF in the near future which will result in some changes to the current data input requirements. Further updates on this will be published by HMRC as progress is made.


New Border Model 

There are 3 stages to the introduction of Customs formalities from January 2021, they are:

Stage 1 – from January 2021

Imports
Import declarations will be required for all imports from the EU but they can be deferred for up to 6 months in certain circumstances

Exports
Exporters of goods from GB to the EU will be required to complete a UK Customs export declaration.  This may be deferred by up to 4 weeks if a simplified declaration is made upfront

Stage 2 – from April 2021

Certain categories of imported goods subject to Sanitary and Phytosanitary goods will have additional requirements placed on them (i.e. Animal products, fish and fishery products, high risk food, plants and plant products

Stage 3 – from July 2021

All traders moving between GB and the EU will be required submit full Customs declarations and pay any relevant duties
(Note: there are special arrangements for goods moving in and out of Northern Ireland under the NI Border Model )

Government advice on both importing and exporting from January 2021


These are the key steps to prepare for importing and exporting your goods

Register for an Economic Operator Registration and Identification (EORI) number

If you do not already have an EORI number, you will need to register for one

HMRC uses this number to identify your business and record your exports and imports. To move goods into or out of the EU you will need an EORI number.
If the UK leaves the EU without a deal, you’ll need an EORI number that starts with GB. If you do not already have one, you can apply now, even if you do not use it.

Your EORI number looks like this;
      GB123456789000
(Member State of registration, VAT Number plus 000)
 

Find the Commodity Code(s) for your goods

Referred to as ‘classification’ the Commodity Code provides a description of the goods being exported, expressed as an 8-digit number for exports and 10-digits for imports.
All exports and imports must be declared using a commodity code and as the exporter/importer you are legally responsible for providing the correct tariff classification of your goods.  

Classifying your goods correctly means you know whether; 

  • an export licence is required 
  • any preferential duty rates can be applied
  • your goods are covered by measures such as anti-dumping duties or tariff quotas 

Calculate the correct value of the goods

Each member country of the World Trade Organisation (WTO) sets out the tariff rates for goods imported into their country. The WTO provides the international framework for the conduct, regulation and dispute mechanism that supports international trade.  It is vital that you understand what needs to be included for the customs tariff values and valuation. Failure to provide accurate information and relevant documentation to relevant customs authorities can lead to investigation and criminal actions. 

Decide who will make the electronic export declaration

Businesses can use a customs broker, agent, or freight forwarder to submit the necessary customs declarations. This can make exporting and importing simpler and faster.
Alternatively, you can make self-declarations to the CHIEF system by obtaining the  necessary software and by using the National Export System (NES) for export declarations.
 

Consider the Special and Simplified Procedures on offer at HMRC

HMRC offer a selection of Special Procedures (Customs Warehouse, Inward Processing, Outward Processing etc.) which can help UK businesses mitigate the cost associated with importing and exporting goods and Simplified Procedures (Customs Freight Simplified Procedure, Transit) which can help speed up clearance at the border.
 

Review the delivery terms (Incoterms) attached to your imports and exports

Incoterms or delivery terms in commercial contracts or agreements can determine which of the parties involved is responsible for transport, duty and declaration costs. These should be reviewed to establish whether these liabilities fall to your business