{"id":7097,"date":"2020-12-11T16:00:50","date_gmt":"2020-12-11T16:00:50","guid":{"rendered":"https:\/\/www.sage.com\/en-gb\/blog\/?p=7097"},"modified":"2026-01-29T10:00:37","modified_gmt":"2026-01-29T10:00:37","slug":"brexit-affect-freight-forwarding","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-gb\/blog\/brexit-affect-freight-forwarding\/","title":{"rendered":"How does Brexit affect freight forwarding for small businesses?"},"content":{"rendered":"
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\n\t\t\t\t\t\t\tStrategy, Legal & Operations<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t
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\n\t\t\t\t\t\tHow does Brexit affect freight forwarding for small businesses?\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t

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\n\t\t\t\n\t\t\t\t\"\"\t\t\t\tKeir Thomas-Bryant<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n

Following the end of the Brexit transition period, from 1 January 2021, moving goods between Great Britain (England, Scotland and Wales) and European Union (EU) countries will understandably become more complicated, as will moving goods through EU countries en-route for another country.<\/p>\n\n\n\n

There will be a customs border between the countries in Great Britain and the EU.<\/p>\n\n\n\n

Meanwhile, Northern Ireland will remain part of the EU customs and VAT regime when it comes to trade with Ireland and the rest of the EU.<\/p>\n\n\n\n

But from a customs and VAT<\/a> perspective, moving goods between Great Britain and Northern Ireland won\u2019t change from how things were handled prior to Brexit and the end of the transition period.<\/p>\n\n\n\n

Businesses across Great Britain need to consider freight forwarding for the first time. Others that already utilise this service will need to understand the changes that are coming.<\/p>\n\n\n\n

How will the end of the Brexit transition period affect freight forwarding? Read on to find out \u2013 this article covers the following topics:<\/p>\n\n\n\n

What is freight forwarding?<\/a><\/p>\n\n\n\n

How will Brexit affect freight forwarding?<\/a><\/p>\n\n\n\n

Planning for freight forwarding following Brexit<\/a><\/p>\n\n\n\n

Steps to take now to prepare for using freight forwarders<\/a><\/p>\n\n\n\n

Finding a freight forwarder<\/a><\/p>\n\n\n\n

How to use a freight forwarder following Brexit<\/a><\/p>\n\n\n\n

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Download your free guide, Business after Brexit, and discover what you need to know and do from 1 January 2021<\/a><\/div>\n<\/div>\n\n\n\n

What is freight forwarding?<\/h2>\n\n\n\n

Freight forwarders are like a travel agency for freight. They aim to provide a complete \u2018door-to-door\u2019 service between seller and buyer.<\/p>\n\n\n\n

Alternatively, some might offer a \u2018door-to-port\u2019 service (and vice versa), or even just a \u2018port-to-port\u2019 service. You or your customer will have to handle logistics before and after this.<\/p>\n\n\n\n

But freight forwarding is about more than merely moving the freight.<\/p>\n\n\n\n

Freight forwarders know the documentation required \u2013 export, customs, licensing, security and safety. Often they use their knowledge of customs to ensure you pay the lowest costs.<\/p>\n\n\n\n

A freight forwarder may have in-house transport services but, in any event, they will sort out the required logistics on your behalf \u2013 road, rail, air and ship.<\/p>\n\n\n\n

Often, they take advantage of block booking for reduced costs. If the freight needs warehousing, or special customs procedures, they also take care of that, as well as insurance too.<\/p>\n\n\n\n

They differ from customs brokers, who focus only on the customs paperwork and payments.<\/p>\n\n\n\n

Freight forwarders are licensed in some countries. In the US, for example, they are licensed and regulated by the Federal Maritime Commission. In the UK, there\u2019s no licensing requirement.<\/p>\n\n\n\n

There are umbrella bodies that freight forwarders are often members of, such as the British International Freight Association (BIFA)<\/a>. These organisations ensure standardisation in contracts and expectations.<\/p>\n\n\n\n

Freight forwarding costs money, of course. Normally you pay upfront. But freight forwarding pays for itself in administrative time savings, as well as reducing the potential for delays.<\/p>\n\n\n\n

As such, many businesses consider it an essential investment, while their customers often expect it as a matter of course.<\/p>\n\n\n\n

How will Brexit affect freight forwarding?<\/h2>\n\n\n\n

Prior to Brexit<\/a> and the end of the transition period, there were no customs borders between EU states.<\/p>\n\n\n\n

This arrangement virtually eliminated customs delays and paperwork required to move goods. It meant there were no customs duties to pay.<\/p>\n\n\n\n

Goods could also pass through an EU country en-route to another country in the same frictionless way.<\/p>\n\n\n\n

As of 1 January 2021, the countries in Great Britain leave the EU customs union and VAT area.<\/p>\n\n\n\n

Some degree of customs paperwork will be required to move goods to, from, or through EU countries. VAT will be payable on imports above \u00a3135.<\/p>\n\n\n\n

The government has introduced legislation to minimise this impact on businesses.<\/p>\n\n\n\n

It\u2019s possible to use Simplified Customs Procedures, for example, in order to delay the requirement for customs documentation by six months after the end of the transition period.<\/p>\n\n\n\n

The new postponed VAT accounting<\/a> system avoids the need to pay VAT at the point of import too.<\/p>\n\n\n\n

We\u2019ve written on Sage Advice about post-transition-period customs and VAT following the end of the Brexit transition period, as follows:<\/p>\n\n\n\n