EU frictionless trade to end

The government has confirmed that full customs declarations will apply to all imports from and exports to the EU after the end of the transition period, with significant ramifications for traders, in particular those that only trade with Europe.

Cabinet Office minister Michael Gove told industry last week to prepare for new bureaucracy and costs from January 1, 2021 when the post-Brexit transition period ends and the UK leaves the EU customs union and single market.

Frictionless trade has been kicked into touch and has the potential to be really costly for business.

Easements, previously announced by HMRC, to defer declarations and VAT payment for up to six months will not be reintroduced, meaning press are on cashflow

Speaking at a freight event, Mr Gove confirmed that Britain would introduce import controls on EU goods from the start of 2021 — effectively treating them in the same way as imports from any third country.

Authorities on both sides of the border will collect customs, value added tax and excise duties and inspect goods crossing a frontier that has, under Britain’s EU membership, been friction-free.

Boris Johnson’s decision to diverge from EU rules and regulations and seek a free trade agreement, guarantees the end of frictionless trade.

NEW EU BORDER PROCESSES

At the same time Mr Gove made his speech, the government confirmed plans to introduce import controls on EU goods at the border after the transition period ends on 31 December 2020.

Government guidance for business is to prepare for border controls by making sure they have an Economic Operator Registration and Identification (EORI) number, and looking into the type of import declarations they will need to make how they want to make those declarations.

Easements, previously announced by HMRC, to defer declarations and VAT payment for up to six months will not be reintroduced, meaning cashflow demands will increase, unless another appropriate regime applies. Our experts can guide you.

Exports to the EU will be subject to security filings, in the form of an entry Summary Declaration (ENS) filed two hours prior to the arrival of the vessel to be immediately approved for loading. The Movement Reference Number (MRN), required to load the vessel will follow at a later stage.

TERMS OF TRADE ARE IMPORTANT TOO

A critical and often overlooked point is that, because customs processes will apply at origin and destination, Incoterms rules will determine who has fiscal and legal responsibility for security and customs declarations.

If you trade in the EU, it is likely that you do using Ex Works (EXW), or Delivered Duty Paid (DDP), two most popular Incoterms used for EU/UK trade today.

Bw aware, if you do, that after 1st January 2021 under:
EXW the buyer is responsible for raising the export declaration in the seller’s country and also responsible for the import entry, duty and VAT in their country.

DDP the seller is responsible for raising the export declaration in their country and responsible for the import entry, duty and VAT in the buyer’s country

HOW NOATUM LOGISTICS CAN HELP YOU

  • Our systems integrate directly with HMRC’s to simply and swiftly process thousands of declarations daily.
  • AEO accreditation means that our customers declarations re fast-tracked through customs control and our lower risk score minimises physical and documentary inspection.
  • Our customs experts can guide you on the most beneficial customs regimes for your business, including export declarations and the deferring of import reporting and VAT payment.

Contact us directly to start preparing your business for the new EU customs processes, protecting your supply chain and optimising cashflow.