What you need to know about importing and exporting goods

It is no longer the case that goods move between the UK and the EU relatively seamlessly, as without the benefit of the customs union businesses now need to consider Customs Duty and import VAT liabilities, as well as declarations on both imports and exports, particularly for restricted items.

Without UK membership in the EU, a simplification that existed for businesses importing goods into Great Britain (‘GB’) is no longer available. Whilst during 2021, a trader was able to move goods into GB from an EU country and delay its Customs Declaration for up to 175 days as a post-Brexit easement, since 1 January 2022, full customs controls apply to imports of goods moving into GB from the EU.

It is important to note that this treatment, however, does not apply to movements of goods into GB from the Republic of Ireland. The UK Government has continued to state that until the Northern Ireland Protocol is renegotiated, the option to delay Customs Declarations by up to 175 days in respect of goods received from Irish ports remains available.

For all other imports to GB from EU member states, a full customs declaration is now required at the point of import and therefore it is now necessary to consider how these requirements can be met.

For many importers, this will involve using a freight forwarder or customs agent to deal with these obligations. Businesses should, however, retain clear oversight of the declarations process and ensure that contracts are clear on which party is responsible in case of error.

Without mitigation, the effect of these changes is that importers will be required to clear Customs Duty and VAT at the point of import, rather than at a later date as was possible throughout 2021. In addition, pre-import notification is required on food and drink products and live animals being imported into GB.

The significant impact of full customs controls is additional paperwork, resource and time constraints faced by businesses in ensuring all of their obligations are met prior to import. The Public Accounts Committee has stated in a recent report that there has been ‘a clear increase in costs, paperwork and border delays’ for businesses. HMRC estimate the additional cost to businesses to be somewhere between £15 and £56 per declaration.

It remains the case that for most importers, the Postponed VAT Accounting mechanism will offer a significant cashflow advantage by allowing ‘self-accounting’ for import VAT, which for many businesses creates a VAT neutral position. Businesses using a freight agent should discuss this option with them.

A Duty Deferment Account (‘DDA’) will offer a further cashflow benefit for businesses where there is a Customs Duty liability arising from the import of goods to the UK. A DDA requires authorisation to be granted by HMRC, so this should be considered in advance of any importation.

Businesses that do not meet the requirements of the new obligations under full customs controls will have goods retained at the port and – potentially – returned to the country of origin. Therefore, it is vitally important that businesses understand how to remain compliant.

Get in touch

If you would like to discuss any import or export plans you have in order to understand your obligations in more detail, then please use the contact form below. 

Get in touch