New rules on importing goods from the European Union (EU) were introduced at the start of 2022.
Small and medium-sized businesses, as well as their accountants and professional advisers, need to be aware of these changes, which affect customs declarations, rules of origin, pre-notifying imports, and use of the Goods Vehicle Movement Service among other elements of the import and export process.
Read on for more details on those changes and how to prepare for them.
Here’s what’s covered in the article:
Brexit and timings for import control changes
The UK-EU Trade and Cooperation Agreement (TCA) came into effect on 1 January 2021 and brought with it new customs processes, administration, and checks.
It followed the Brexit transition period, which began immediately after the UK left the EU on 31 January 2020.
This transition period was part of the UK-EU Withdrawal Agreement in which the UK’s membership of the EU ended but it remained a member of the single market and customs union and was subject to EU rules.
However, some of the TCA’s import control changes were delayed to minimise the impact on businesses and their supply chains.
This meant that, as a temporary measure, most goods imported from the EU were permitted to enter the UK without the need for the complete customs paperwork to be prepared in advance, as happens with goods entering the UK from countries outside the EU.
Most businesses only needed to make customs declarations and pay any applicable tariffs within six months of the date of import.
Similarly, they didn’t have to pay import VAT when the goods were imported.
Assuming you’re a VAT-registered business, you could pay it at a later date, with postponed VAT accounting.
Rules of origin
Since 1 January 2022, under the new rules for businesses importing goods from the EU in full, you have to make a customs declaration ahead of time and prepay any tariffs.
You can still use postponed VAT accounting.
Also, new requirements for export health certificates for live animals and animal products have been introduced.
Generally, you have to identify the origin of any goods that you’re planning to import into the UK, as well as providing additional paperwork in order to qualify for zero tariffs and quotas.
However, there’s some flexibility here.
Under its Border Operating Model, the UK doesn’t require full declarations for goods that aren’t on the controlled list for the first six months.
These “rules of origin” requirements when importing goods from the EU came in from 1 January 2022.
Rules of origin are a common feature of free trade agreements.
The UK and the EU agreed to zero tariff and zero quota trade on goods. However, to qualify for this tariff-free access, you need to ensure your goods meet the rules of origin requirements as set out in the UK withdrawal treaty.
The aim is to ensure these goods meet the criteria to be considered “local”.
For them to qualify for the local category, you have to demonstrate that your goods or their constituent parts originated in the UK.
If you have products that come from different countries, they need to be what’s termed “substantially transformed” to comply.
The requirements for each category of goods are spelled out in the TCA but, essentially, the goods that are imported need to undergo additional manufacturing or processing. They could, for example, be an ingredient of the finished product.
This can be quite complex but the Federation of Small Businesses explains in more detail the three essential rules that are needed to satisfy the requirement for a product to be sufficiently worked or processed.
Certification, documentary, ID and physical checks for products of animal origin, animal by-products, plant and plant products, will be introduced in three phases between July and November 2022.
However, you have to pre-notify consignments from 1 January 2022.
If you’re importing products of animal origin, animal by-products and what are called “high risk foods not of animal origin” (HRFNAO), you must pre-notify any consignments at least four hours in advance of their arrival into the country.
This pre-notification must be made via the import of products, animals, food and feed system (IPAFFS), for which you need to create an account.
You can find out more information about this process from the government’s website.
EU imports: Vehicles and hauliers
The changes that came into force in January 2022 also affect vehicles and hauliers.
You need to get a Goods Movement Reference (GMR) to move goods from the EU to Great Britain, for transit movements. This is a customs procedure that allows goods to be transported across international borders under the control of customs.
You also need a GMR to move goods from Great Britain to Northern Ireland and you might need one as well for goods going from Northern Ireland to Great Britain.
Each GMR contains details for a single crossing and can be used only once.
To get your GMR, you need to register with the Goods Vehicle Movement Service (GVMS).
To import goods from the EU, you also need an Economic Operators Registration and Identification (EORI) number. This is used to track and register customs information within the EU, and you can apply for one on the government’s website.
You can register for an EORI number as a business or an individual.
Any business importing and exporting goods to the EU needs one, unless the “goods” are digital services only. You don’t need one if you’re transporting goods between Northern Ireland and the Republic of Ireland.
EORI numbers and commodity codes
As well as your EORI number, you have to have the relevant commodity codes. These are used to classify goods imported and exported inside or outside the EU.
They’re needed to ensure the right tax and duty is paid and that imports and exports comply with all the necessary regulations.
You need a commodity code for any goods that you’re importing from the EU to the UK. Look at the government’s UK Integrated Online Tariff website to find the relevant commodity code.
You’re also required to make a customs declaration to HMRC when importing goods from the EU.
These new rules and regulations on importing goods will almost certainly add complexity to your business and if you fail to prepare to manage them, you’ll see your supply chains delayed and disrupted.
It’s therefore important that you talk to your suppliers as soon as possible to ensure they’re ready to provide you with all the necessary information and documentation.
Need help? Get support from a customs intermediary
You might want to consider contacting a customs intermediary who can help you with submitting a customs declaration, which can be a complicated procedure in some circumstances.
The government has a series of seminars and videos with advice and tips on how to import goods from the EU.
You should certainly start by speaking to your accountant, your business adviser, and your solicitor. They’ll probably be helping other clients who are going through the process and so they’ll have a better idea of the kind of issues that you’ll be facing.
If you’re a member of a trade association or industry body, it’s also worth asking them for any advice and recommendations.
Taking action now, either yourself or via a customs agent, is essential to ensure your business is ready to manage the additional hurdles and challenges when importing goods from the EU after 1 January 2022.
Editor’s note: This article was first published in December 2021 and has been updated for relevance.
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