Not sure what an EORI number or what it will mean for your business post-Brexit?
Following a Brexit outcome of any kind, businesses that import or export goods with the EU will need to register for an Economic Operator Registration and Identification (EORI) number. This will then be used on the customs declarations businesses will need to create.
HMRC says only 17% of businesses have registered for an EORI number so far, which could lead to difficulties following Brexit.
This article has information on applying for and using an EORI number, and there’s also some broader advice if your company intends to trade goods with EU countries post-Brexit.
What is an EORI number?
An EORI number is an EU requirement for businesses that want to import or export physical goods with EU countries in instances where the trade will involve tariffs being applied.
Note that customs tariffs are different to VAT. Assuming the goods you import or export are liable, VAT will collected in addition to tariffs and also collected in a different way.
An EORI number wasn’t required until now for the majority of businesses that traded solely with EU countries because, as a member of the EU, the UK was part of a free trade area. Tariffs didn’t apply.
The UK might continue to be part of a free trade area following Brexit if a negotiated settlement is agreed, but current government advice is for businesses to get an EORI as soon as possible (and an EORI may still be needed regardless of what Brexit outcome occurs).
An EORI is a 12-digit number that begins with GB — for example, GB123456789000. As such it is very similar to a VAT number, although longer.
The EORI number needs to be quoted in documentation such as customs declarations and clearances, and is used by computerised customs systems as an identifier. The UK and EU have databases of EORI numbers.
If businesses plan to use customs agents, freight forwarders or couriers to complete customs declarations on their behalf, the agents will need to know the EORI number to complete the paperwork.
If there is no EORI number, goods may be held up for customs clearance.
Notably, HMRC made a mistake when initially communicating the requirement for EORI numbers to businesses. It stated that businesses require an eight-digit number, when actually they require a 12-digit number.
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Does my business need an EORI number after Brexit?
If your business imports or exports goods with any EU country then it will need an EORI number. It doesn’t matter about the size of the business undertaking this trading. Sole traders, partnerships and bigger companies will all need one.
There are some notable exceptions.
If your business is based in Northern Ireland and trades only with the Republic of Ireland then it will not need an EORI number (although HMRC says it will “provide further guidance about the arrangements” once the details become available).
If you already have an EORI number then you won’t need a new one. However, if your business has a EORI number that doesn’t start with GB—one issued in another EU country such as Ireland, for example—then HMRC says you’ll only be able to continue using it for a short period after Brexit.
It’s not clear when this time period will end, with HMRC again saying it will advise businesses once it knows more.
Does my services business need an EORI number after Brexit?
The requirement only applies to moving goods across EU/UK borders. If your business imports or exports services, and doesn’t move physical goods across borders, it will not need an EORI.
Although the term Mini One-Stop Shop (MOSS) applies to VAT, any true MOSS business that trades only digital services will also not require an EORI.
What is the EORI application process and what details do I need?
You or your business can apply for an EORI number at HMRC’s website. HMRC says the application process will take up to 10 minutes.
However, to be able to apply you’ll need a Government Gateway ID for your organisation (or for yourself if you’re a sole trader). If you haven’t got one then you will need to apply for that first, and this will add to the total application time.
The Government Gateway ID is currently sent by post, so time needs to be allowed for the ID to be received if you don’t already have one.
It’s also likely that as a trader your business is VAT-registered. And if your business is registering for VAT because you now meet the threshold, then that process should be completed first because you will need the VAT details.
To apply for an EORI you will need:
- Your Government Gateway ID and password, as mentioned above, plus any mobile device you might have configured to complete two-factor authentication (that is, being sent an authorisation login code via mobile phone SMS or using an authentication app)
- A business will need to provide its VAT number and effective date of registration, which can be found on the VAT registration certificate (or you might ask your accountant if you have one)
- A sole trader will need to provide their National Insurance number
- The Unique Taxpayer Reference (UTR) for your business, or yourself if a sole trader/other one-person trader—this will be found in tax returns
- The Standard Industrial Classification (SIC) code for your business—you can find these in the Companies House register entry for your business.
How long does it take to get an EORI number?
HMRC says you should receive one immediately although adds that “it could take three days” if additional checks need to be made.
However, it’s not difficult to imagine that this time estimate could slip as more and more businesses realise their need for an EORI and the application processes become congested. Therefore, it’s wise to apply for one as soon as possible.
HMRC also lets you check your application to see how it’s doing.
Read more about Brexit:
Can I find an EORI number by company name?
There is no central way to see the name of an organisation linked to an EORI number but some countries do provide systems that show this information.
At an EU level, it is only possible to validate if an EORI number is valid, which means it is in the right format and has been issued to an organisation.
Is an EORI number required for postponed VAT accounting?
No – and yes. VAT is a separate system compared to customs tariffs, which are covered by EORI numbers.
However, to apply postponed VAT, a customs declaration must be completed when goods are received into the UK, and the customs declaration needs the EORI number.
There is no way to apply postponed VAT accounting for imports without completing a customs declaration.
Advice for exporting goods to the EU after Brexit
HMRC advises that businesses should either appoint a customs agent, or ensure somebody in the business is trained to make customs declarations.
This individual requires “specialist software” that is able to link to HMRC’s computers in order to make customs declarations, and they’ll need to ensure the business registers for the National Export System.
Hiring a customs agent/broker is certainly a route deserving serious consideration for those new to working with customs tariffs and documentation.
It’s recommended by the French government in its own post-Brexit guidelines, for example.
For at least 15 months after the Brexit date, exporters will be able to register for and use the Transitional Simplified Procedures (TSP), which will means businesses can export without having to make a full customs declaration at the border.
TSP will also mean businesses can postpone paying import duties.
To register for TSP, you will first need an EORI number and the business or trading name that was entered as part of your EORI registration.
Note that for some controlled goods, you will still need to provide some customs details.
HMRC is also reminding businesses that the Common Transit Convention (CTC) could mean duty does not need to be paid until goods arrive at their final destination.
However, for the CTC to apply, goods should start from an “office of departure”, which is to say you or your agent’s premises if they or you are an authorised consignor, or from a government office.
The goods will also need to pass through an “office of transit” and end at an “office of destination”, to ensure they’re tracked correctly.
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