As we are approaching the end of the Brexit transition period on the 31st of December, new customs processes will come into effect when importing and exporting goods between the UK and the EU.
We know that certain elements (e.g. Customs checks) will apply to UK-EU shipments from 2021 so we would like to make sure you are prepared for the changes.
Mandatory EORI Number
If you’re currently trading outside the EU, you’ll be familiar with customs requirements. If you’re currently only shipping within the EU, now is the time to familiarise yourself with customs procedures. The following information will highlight areas where you can make customs clearance a smoother process.
An EORI number is an Economic Operator Registration and Identification number, this is now required in order to export, import and release goods from Customs 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.
Completing pro-forma or commercial invoices for the EU
When shipping internationally, it is important to consider the contents 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.
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. Certain goods may be subject to restrictions when shipping them between the UK and the EU from 2021. To identify the commodity code for your product(s) visit the UK Government site here. You must ensure the commodity code is included on your commercial / pro-forma invoice.
For Spanish Courier to clear shipments through customs on your behalf, the following must be attached to your shipment:
- Commercial or pro-forma Invoice (This is essential paperwork in order for your goods to clear Customs in the destination country. Detailed goods descriptions and HS codes for the products you’re sending must be included).
- Any relevant licences or certificates
- The waybill
- A packing list (often required by destination Customs)
- Cnee and Shippers Phone numbers
Please note! If you would like to bill all duties and taxes (Terms: DDP) back to your account instead of your customer being charged on receipt of their parcel; Spanish Courier can arrange this for you, for a small administration fee.
From 1 January 2021, a fee will be levied on all dutiable shipments between the UK 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 by the UK and EU, as the following will still apply:
- Customs requirements for all shipments between the UK & EU. This results in an increase in the number of declarations, licenses, data submissions, overall processing, plus new IT systems
- Increased regulatory requirements restricting commodities into Europe
- Increased Bond storage facilities and associated security
The fee is applied per kg as heavier shipments, in general have more complex customs requirements.
Changes to 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.
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.
There will be no VAT charges for shipments being exported from the UK to the EU.
Ways you will be affected
Customs: We anticipate an increase in customs entries.
Operations: Duty & VAT collection is likely to be required for dutiable EU shipments.
May we take this opportunity to thank you for your continued custom and please rest assured our team are there to support you through the Brexit process.