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Bulletin

Are you Brexit ready?

Quite understandably COVID-19 has taken the attention away from Brexit. For many businesses their main focus is on ensuring sources of supply and production.Turning to Brexit the transition clock is ticking. The impact remains the same, whilst this may differ from business to business in terms of GDPR, Products of Animal Origin, Export Controls and Chemicals.

In today’s bulletin we will deal with:

DECISION: UK Government will not be seeking an extension to the EU exit Transition Period

Whilst the deadline for requesting an extension is officially 30th June, the UK have formally confirmed in writing that they will NOT be requesting an extension and will not agree to one should the EU request it.

CONSEQUENCE:

Everybody needs to prepare – NOW – to avoid disruption to services!

New border controls and procedures have now been confirmed for 2021. HMRC have recognised the impact that coronavirus has caused businesses with their preparation efforts and following the announcement in February that the UK would implement full border controls on imports coming into GB from the EU, the UK Government has taken the decision to introduce the new border controls in three stages up until 1 July 2021, rather than all on day one (01.01.20201)

1. From January 2021: Traders importing standard goods (covering everything from clothes to electronics) will need to prepare for basic customs requirements, such as keeping complete records of imported goods, and will have up to six months to complete customs declarations.

  • While tariffs will need to be paid on all imports, payments can be deferred until the customs declaration has been made
  • There will be checks on controlled goods i.e. alcohol and tobacco
  • Businesses will also need to consider how they account for VAT on imported goods – for VAT registered companies the Government have already announced Postponed VAT Accounting from 01/01/2021 [Please find our link to the relevant Government portal Here – section 1.60]
  • There will also be physical checks at the point of destination or other approved premises on all high-risk live animals and plants


2. From April 2021: Traders importing all products of animal origin (POAO) – i.e. meat, dairy, honey, egg products or pet food. All regulated plants and plant products will require pre-notification and the relevant health documentation.

3. From July 2021: Traders importing all goods will have to make declarations at the point of importation and pay relevant tariffs. Full Safety and Security declarations will be required, while for SPS commodities there will be an increase in physical checks and the taking of samples: checks on animals, plants and their products will now take place at GB Border Control Posts.

The UK Government have now issued their Global Tariff or Most Favoured Nation (MFN) tariff to the World Trade Organisation (WTO).

A consultation on the new tariff was completed in March 2020, whereby industry stakeholders had the opportunity to give their opinions on the potential tariff and as part of the new UKGT, many duty lines have been removed, reduced or simplified.

“Meursing Codes” have been removed from the UKGT and the EURO rates have been replaced with GBP, in contrast to what was advised by the Government as part of the UK “No Deal” Tariff last year.

The new tariff will commence on 1st January 2021 and is applicable for all imports from outside the UK. If a trade deal is agreed and ratified prior to this, it may lower the rates further (in some cases, the rates may become nullified).

Although the UK Government have released a list of easements for Import related consignments, this is not the same for Exports. All UK Exports to the EU will require Customs Clearance formalities from day one. These include but are not limited to the most common formalities shown.

  • All Export shipments require an Export Declaration including an Entry Summary Declaration (ENS) from the UK
  • All Export shipments require a Transit Document unless the port/place of arrival is in the same EU Country as the destination of goods (e.g. Exportation of goods via the Dover- Calais route; only French goods can be cleared at Calais – all other goods for any other EU Country require a Transit Document)
    • The Transit Document can only be issued in the UK by an authorised party prior to departure from the UK and requires authorisation by HMRC (backed up by a guarantee / bond held with HMRC)

  • Full Import Customs Clearance at the place of destination in the EU (inclusive of payment of DUTY and VAT depending on Incoterms)

Export:

These will become more intricate from day one. An Export Health Certificate (EHC) will be required on any product that contains animal origin ingredients. This document must be completed at the premises where production is completed. This gives the Official Vet (OV) an opportunity to inspect the facility and confirm that there are no traces of disease on site.

Import:

Although UK import easements have recently been published these will only be effective from the moment the goods arrive in the UK. In order to complete the export in Europe you should liaise with your EU supplier as they require full compliance of the EU regulation probably from day one.

The UK Government is currently trying to re-negotiate the regulatory alignment they had previously agreed with the EU, as the full extent of the difficulties it creates are now emerging. The raft of measures introduced in the last couple of weeks by the devolved NI and the UK Governments give guidance on how all stakeholders should deal with the introductions of the easements for GB-NI-GB trade, as NI remains in the UK Customs territory, but is working to the EU Customs code.

HMRC is working on clarification and notifications relating to the Northern Ireland Protocol. If you trade in Northern Ireland you will be directly/indirectly affected by these changes. It is our recommendation that you complete HMRC’s questionnaire and submit immediately. Please find our link to the relevant Government portal Here.

Your Commodity Code is the basis of any Customs Declaration.

Wrong codes can cause an incorrect amount of import tax to be applied leading to delays, returns or even destruction of the goods. Without the Commodity Code, we cannot complete the declaration.

The best way to start this process is to break down your consignment into three different categories:

  • What the goods are
  • What they contain
  • What they are used for


The three categories will help you determine the most relevant commodity code for your consignment, this is the same procedure that is used by HMRC within their trade tariff.

Some consignments will require an additional four-digit Meursing code. This will ensure that the correct import taxes are made payable to HMRC and MUST be correct. Once you have found your commodity code, you will be advised if you also require a Meursing code.

More information

UK MFN Trade Tariff

Additional Commodity Code

EU Trade Tariff

All information provided by Dover International Department (DVI) of Nagel Langdons Ltd. If you are a UK based company and you seek support or help to prepare for Brexit please contact UK customs. If you are a Continental based company please contact Continental customs.