Following Brexit and the changes to the way we are now trading with Europe, the government has recognised that some businesses need more help. They have set up a support fund to help businesses with training and professional advice.
At TPS Global we are working with our clients to ensure the smooth transit of goods into and out of Europe, and recommend that any businesses seeking additional help visit the GOV.UK website for more information.
Applications for the government SME Brexit Support Fund will open next month, more information below on this scheme.
SME Brexit Support Fund
The government announced that small and medium-sized businesses (SME’s) can get up to £2,000 through the SME Brexit Support Fund to help with training or professional advice. The grants can be used for training on:
- how to complete customs declarations
- how to manage customs processes and use customs software and systems
- specific import and export related aspects including VAT, excise and rules of origin.
The fund will be administered through the existing Customs Grant Scheme and will open for applications next month. Find out more about the support fund on GOV.UK.
HMRC answer some of the commonly asked EU Trade questions:
- Can I use more than one customs intermediary?
Yes, it’s up to you to decide what works best for your business. Using a single intermediary for all movements may be cheaper and more efficient. This is because that intermediary will already have your business set up on their system, which makes repeat declarations quicker, easier and cheaper.
But there may be lots of commercial reasons why using a different intermediary for specific movements might make more sense for you, this could be if you are exporting goods from GB via different routes.
For example, you may export pieces of furniture to Spain by sea freight via Southampton, and you send furniture hardware to Hungary by air freight via Heathrow. You might want or need to use a different intermediary for those movements, as an intermediary may only deal with goods moving through a particular port or airport and will only hold a CHIEF badge for movement of goods via that route.
Here is a list of customs intermediaries that can help you.
- How do the new VAT rules for goods under £135 affect me?
The new VAT model for goods under £135 ensures goods from EU and non-EU countries are treated in the same way, and that UK businesses are not disadvantaged by competition from VAT free imports.
The new system also addresses the problem of overseas sellers failing to pay the right amount of VAT when they sell goods in the UK which has meant that UK businesses were often undercut and lost out on business.
For buying goods from outside the UK which don’t exceed £135 in value the seller, or online marketplace (OMP) if sold through one, must now charge and account for VAT when the goods are sold.
Business to Business sales are also covered by the new rules. Where the UK VAT registered business provides the OMP or direct seller with its VAT registration number, the responsibility to account for VAT is with the UK VAT registered business customer, who will account for it if the goods are supplied in:
- Great Britain using a ‘reverse charge’ procedure
- Northern Ireland, using Postponed VAT Accounting.
If a valid UK VAT number is not provided, the direct seller or OMP, must treat the transaction as though it were a business to consumer sale and charge VAT accordingly.
These new measures have been introduced to address VAT non-compliance in response to the UK’s exit from the EU. From 1 January 2021 the same rules apply to imports of goods arriving from non-EU and EU countries.
- How do I classify my goods in my import and export declarations?
You need to use a commodity code (also known as a tariff code) to classify your goods when you complete import or export declarations.
HMRC uses these codes to work out how much Customs Duty or VAT you owe on goods that you move into or out of the UK.
If you use the wrong code:
- your goods could be delayed or seized
- you might pay the wrong amount of duty or VAT – if you pay too little, you may have to pay extra charges.
You can use the Trade Tariff tool on GOV.UK to find the correct commodity code for your goods. If you have hired a customs intermediary to deal with your import and export declarations, they will be able to help, but you will need to provide accurate information about your goods.
Some goods are harder to classify than others. If you’ve tried to find the commodity code for your goods and you’re still not sure which one to use, you can ask HMRC for help to classify your goods.
Once you have the correct code, you can check if you need to pay duty or VAT, and how much. You can also see if there are any duty reliefs or restrictions on your goods, or if you need a licence to move them.
- How can I claim preferential rates of duty for goods that I import from or export to the EU?
If your goods originate in the EU or UK, you may be able to claim a preferential rate of duty, if:
- you import the goods into the UK
- you export the goods to a country in the EU
- the goods will be released into free circulation in the UK or EU.
This means you’ll not need to pay Customs Duty on these goods. To benefit from preferential rates of duty when you import into the UK from the EU (or import into the EU from the UK), you’ll need to follow these steps:
Step 1: Check if your goods are covered by the UK’s deal with the EU
You’ll need to classify your goods correctly, to confirm if they’re included in the UK’s deal with the EU; the Trade and Co-operation Agreement (TCA). Here’s more information about the rules of origin requirements under the UK’s deal with the EU.
Step 2: Check if your goods meet the rules of origin
To claim preferential rates of duty, your goods must originate in the EU or UK (as the exporting country). You’ll need to check if your goods meet the rules of origin and product specific rules. Rules of origin determine where your goods originate from. This means the place where they’ve been produced or manufactured, their ‘economic nationality’, rather than where they’ve been shipped or bought from.
Step 3: Get proof that your goods meet the rules of origin
You’ll need to declare that you have proof that the goods comply with the rules of origin.
Step 4: Find out how to complete your import or export declaration
You will need to include this information in your import or export declaration
If your goods do not meet the rules of origin requirements, (or if you cannot prove that the goods meet them) you’ll need to pay Customs Duty, unless your goods are eligible to claim a relief from customs charges. You’ll be able to find out the rate of duty you need to pay when you classify your goods.
- Can I claim preferential rates of duty for goods that I import into the UK from the EU and re-export to an EU country?
If you import goods into the UK from the EU and re-export them to an EU country, you may be able to claim preferential rates of duty when you re-export the goods, if they meet the rules of origin requirements.
This will depend on whether:
- the goods originated in the EU
- you’ve altered or substantially processed the goods in the UK.
For example, if a UK business imports silver from the EU that was produced in the EU, the goods will be eligible for the preferential zero rate of duty, under the terms of the UK’s deal with the EU (the TCA). The business cannot return the silver to the EU at the preferential zero rate of duty. But, if the business processes the goods to turn them into a product with UK origin (for example jewellery), the goods would be eligible for the preferential zero rate of duty under the terms of the TCA.
If your goods are not eligible for preferential rates of duty you may be able to claim Returned Goods Relief (RGR) in the EU instead. RGR provides relief from charges on re-imported goods into the EU that have previously been exported. You can get this relief if your goods meet the conditions – including that the goods have been in free circulation in the EU when they were exported and must be re-imported in an unaltered state, apart from any work that may have been carried out to maintain the goods in working order.
Please note, you’ll need to get guidance on RGR into the EU from the customs authority of the EU country that you export your goods to. Here’s more information about RGR for goods re-imported into the UK.
Use our new importing from and re-exporting union goods to the EU flowchart available on GOV.UK, to help you find out if the goods you want to re-export to the EU will be eligible for:
- preferential rates of duty
- or for RGR in the EU instead.
- Help and support
- How to get HMRC help and guidance.
Whether you have started making customs declarations or are just beginning to put preparations in place. HMRC have customer support, online guidance, tutorials and grants available to help you get used to these new rules. Here are some of the options available to you:
They’re delivering daily webinars including:
- What are customs import declarations?
- What you need to know about staged controls
- Trader responsibilities when using an intermediary
- Exporting: what you need to know to keep your goods moving.
If you’d like to attend a webinar you can register here.
Call their customer service team
HMRC Customer Service Advisors are available to answer your queries on the Customs and International Trade helpline. They’ll help you with importing, exporting and customs reliefs. The helpline is open from 8am to 10pm Monday to Friday and from 8am to 4pm at weekends.
Call to speak to an advisor on 0300 322 9434.
Guides for importing and exporting between Great Britain and the EU
If you have a customs intermediary, there are still actions that you need to take. Whether you’re completing customs declarations yourself or have an intermediary to do it for you, these importing and exporting guides will take you through the entire process, telling you each step to take, and setting out your options.
Find out more on GOV.UK.