There seems to be no escape: Brexit. Before the news came out that there finally was a deal, December was a month full of nervous waiting. The advice from the Customs, Chamber of Commerce, Tax Authorities, MLNV, the Embassy, and the Task Force VK all sounded the same: Whether there is a deal or no-deal, preparations are necessary! The deal situation has a few advantages (compared to a no-deal), such as facilitating documents of preferential origin and import duties, but this does not mean there is less work to be done.
We have listed a few pointers for you and your company.
1. Prepare your documents
Prepare for custom formalities, supervision of goods traffic, levying of customs duties and excise duties, and the non-tariff trade barriers. Most companies trading with the UK are familiar with these topics. We have listed some necessary documents for you, with a brief explanation.
1.1 Export from the EU to the UK? Take care of the export invoice (excluding VAT), transport documents and export declaration
This situation has a few adjustments. You can no longer make an intra-community delivery when providing the export invoice, which means an export declaration is required. An EORI number is necessary for this export declaration. You must ensure a correctly completed export declaration for the transport documents (CMR, B/L, or AWB) and proof of export. This declaration allows you to claim exemption from VAT with the tax authorities, depending on your Incoterm. Make sure to have your documents ready and stored because the customs can check your documents for up to 7 years.
When importing into the EU from the UK, it goes the other way around: the British supplier provides the export invoice and a British export declaration as proof of the VAT. He also includes transport documents, UK export declaration and, depending on where the goods enter the EU, the transit documents (T1). In the EU, you need an import declaration (AGS or EORI number), payment of import duty, consumption tax and VAT. With your requested VAT code number, according to Article 23 of the Turnover Act, you can reverse charge the VAT. This step is especially crucial for the person who takes care of the logistics for you.
1.2 Pay attention to the UK import declaration
You have to communicate an agreement about the import declaration with the customer. To apply for an EORI number, visit your designated tax authority’s website (e.g., if you own a Dutch company, you have to go to the Dutch tax authorities). For a British EORI number, you must go to the British Government website.
1.3 Bringing goods to the UK from the EU through roll on roll off ports?
The British Government has made an overview of preparations for using roll on roll off ports and ferry services. You can view this on their website.
1.4 Arrange the UKCA marking
(Web)shops have to deal with new rules, such as distinguishing between packages worth more or less than 135£. UKCA marking replaces CE marking. The safety requirements remain largely the same, but the UK standard is needed to get your products to the UK market. Some CE markings can still be used in the UK market until 1/1/2022. However, this does not apply to every marking. Therefore, check the UK Government website on how to arrange the UKCA marking.
2. Make sure everyone knows what to do
In matters such as VAT reverse charge, Incoterm costs, import and export declarations, and transport documents, you must continuously communicate with other parties (such as customers and suppliers). The necessary information can be obtained here:
2.1 Check the Brexit Checker
The UK Government has all the essential information. If you do not know what to look out for, you can do the Brexit Checker. We recommend this, even if you have done this scan before, as it updates frequently.
2.2 Check the consequences for public administrations and EU businesses
Do you have questions and uncertainties about excise duties, intellectual property law, and prohibitions and restrictions? The European Commission listed the EU guidelines so that you can keep an eye on these matters.
2.3 Check the UK Government
Changes in, for example, VAT payments can be found on the website of the UK Government. In general, the website provides essential information on the Brexit situation.
3. Select the best Incoterm
As you can see above, there are many Incoterms to choose from, so pick one that suits you best. Who will bear which costs (import duties, customs clearance costs) and transport risk depend on the agreed Incoterm. Pay attention to long-term contracts, EXW and DDP risk factors, risk during loading and unloading, and transport risk. For example, with the FCA Incoterm, the buyer is primarily responsible for the arrival of goods, whereas the DDP Incoterm, the seller is primarily responsible. You have to consider which party should be accountable and where the risk transfer points lie for you. Discuss this with your customer and suppliers.
If you are not sure which Incoterm suits you best, and how to arrange this, go to the UK Government website.
4. Check, check, and check again!
Djoeke Adimi, of the Task Force VK, describes the situation as ’significantly complex.‘ „If you want to trade or continue to trade with the UK, you have to do your homework.“ You need to sit down and work for a while, and by this we mean: you have to check everything carefully, down to the details. The complexity depends on which actions you want to perform.
Feel free to talk to us, or visit brexitloket.nl or gov.uk for further details on Brexit matters. Do not be afraid to work together and ask for assistance: Although you need to have your paperwork in order, you certainly do not have to do this alone.
Illustrations by Global Connect Admin B.V.