5 Steps to prepare your business for full customs controls

DSA Prospect Associate Nigel Benton is discussing the new 'complex' customs rules and how businesses can prepare for trade moving forward.

It's nearly time for full customs declarations to come into effect. With some of the government's easements ending 31 December 2021, it's time for businesses to start planning for the new UK trade rules, especially for those who will be managing customs requirements on their own.

The big question is, how can you prepare for these full customs controls?

What changes are being enforced and when?

1 January 2021

The government previously announced the trade changes that would take place in January 2021 following Brexit and the UK's exit from the EU Single Market and Customs Union. Exports experienced changes immediately while the government introduced a tiered timetable to help businesses cope with the new import rules.

The key changes that occurred January 2021 included:

• Full export declarations on goods moving from the UK to the EU
• The option for a 175 day delayed declaration on most goods imported into the UK
• Introduction postponed VAT accounting which allows import VAT to be paid at a later date
• Most goods imported into the UK permitted to enter the country without full customs paperwork under the same system as imports from the rest of the world
• Full customs declarations on controlled (e.g. firearms) and excise goods (e.g. alcohol)

1 January 2022

• Full customs declarations and controls (including agriculture and food)
• Pre-notification of food and agriculture imports
• Upfront payments of any tariffs, with the exception of VAT-registered businesses who still have the option of using postponed VAT accounting

1 July 2022

• Safety and Security declarations required
• Export Health Certificates where necessary
• Physical checks on food and agriculture imports at Border Control

How should businesses prepare for the new rules?

#1 Know the import/export process

Many businesses have already been working within the new rules when it comes to exporting goods out of the UK, but as the full customs controls are coming into place for imports it's a good idea to have a refresh on the processes for both.

For individuals or businesses that are new to importing and exporting, you'll want  to familarise yourself with the ins and outs of the new UK trade rules as soon as possible to ensure you can move goods across the UK-EU border without significant delays.

You can find detailed guidance on the government website:

#2 Familarise yourself with commodity codes & tariffs

The new trade rules have been described as 'complex', largely because they vary depending on the product, its categorisation and origin. 

Following Brexit the UK-EU Free Trade Agreement came into effect allowing tariff-free imports between the UK and EU providing the goods originate in either the UK or EU, depending on if you're importing or exporting. Remember, that the trade agreement does not necessarily mean that all goods moving between the two will be duty-free.

It's important to know the codes and tariffs related to your goods as it will be required to complete paperwork associated with your import/export, including declarations. It also ensures you pay the correct Customs Duty and import VAT.

#3 Decide who will deal with customs

Luckily business owners have the choice to manage their own declarations or hire a customs intermediary to do this on their behalf. The benefit of hiring someone is that you'll receive expert advice and the option to choose a service that suites your needs.

These services may be provided by customs agents, freight forwarders, or fast parcel operators.

Before selecting someone to deal with customs on your behalf, you'll want know:

You will need to provide:

Your intermediary may also require additional information or documents and you'll need to ensure you either have this on hand or can produce them in a timely manner.

You can hire a person or business to act directly or indirectly for you, please note that your liability will vary depending on which option you choose.

#4 Prepare additional paperwork requirements

You may need to provide additional paperwork depending on what you are importing into the UK. This may include:

Export Health Certificate and pre-notifications to move live animals and animal products
UK safety and security declarations (required from 1 July 2022)
Supplementary declarations and duties owed for any goods you’ve imported from the EU since January 2021.

#5 Is your suppliers are ready for business?

If you're bringing goods from the EU into the UK your supplier will also need to be prepared for the upcoming changes.

Is your EU supplier prepared to clear the goods through customs? This includes knowing what's required and having it ready ahead of time.

Can they ensure tariff-free status under the UK-EU Trade agreement?

Supply concerns

One of the main concerns that have been raised by UK business owners is supply disruptions which could hinder the supply and demand chain.

Failure to complete the correct paperwork and additional inspections will likely be the culprits to import delays, or in a worst case scenario the denial of goods into the UK.

UK businesses may also be fined a minimum of £250 to a maximum of £2,500 for violation of the customs rules, although a warning letter will likely be issued as a first measure.

Your next steps...

Be sure to review and plan for these rule changes as soon as possible to ensure a smooth transition.

The team at DSA Prospect can help you implement measures to protect the health of your business.

Need to discuss the possible impact of the new UK trade rules? Please contact our team today.

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