This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our privacy policy for more information on the cookies we use and how to delete or block them.

Brexit: The ‘no deal’ plan for customs declarations

04 January 2019

The Government has now advised businesses trading in goods with the EU to get ready to complete customs declarations after 29 March 2019 in the event of a no-deal Brexit.

The ‘no deal’ position

Since August 2018, the Government has been publishing a series of Technical Notices to explain how it will implement Brexit in the event the UK cannot reach agreement with the EU on the terms of withdrawal. These include details of the VAT and customs duty changes affecting businesses who have previously only traded within the EU and will be making customs declarations for the first time.

If there is no deal, the Government has already confirmed that businesses will have to apply the same customs rules to goods moving between the UK and EU as currently apply to trade between the UK and non-EU countries – i.e. a hard border will apply. Customs declarations will be required when goods enter or leave the UK and importers will be liable to pay import VAT and/or customs duties. Similarly, the EU will apply customs rules (and duty and VAT at EU rates) to goods it receives from the UK, requiring customs declarations on goods imported from the UK.

The latest Technical Notices

HMRC has now written to the estimated 144,000 VAT registered businesses who move goods between the UK and EU, advising them to take action to prepare for the customs obligations of a no-deal Brexit. It has also published more notices and details of the legal framework for the UK’s post-Brexit customs regime.

Cross-border traders are advised to consider how to classify and value their goods for customs purposes, how they will pay any customs duty that may be due and whether their goods might be subject to import/export licensing. The notices also outline how some importers and exporters may benefit from using customs procedures to reduce or manage their duty liability, such as customs warehousing (where goods can be stored with customs charges suspended until the time the goods are removed for use), temporary admission relief or inward/outward processing relief.

HMRC has also published information for businesses using roll on/roll off ports, who will be required to pre-lodge customs and safety and security documents before the goods cross the border. HMRC recommends that these businesses take steps now to:

  • Register for an Economic Operator Registration and Identification (EORI) number, which will be needed to complete customs declarations and apply for customs procedures.
  • Decide whether to appoint a customs agent to make their import and/or export declarations or complete them in-house by using suitable software.
  • Contact the transport company that moves their goods between the UK and EU to discuss what additional information is required to clear their goods through roll on/roll off ports.

A grant scheme is available to help businesses who complete customs declarations by providing partial reimbursement for the costs of suitable software and staff training.

HMRC also highlights that businesses who will be required to pay customs duty on their imports should consider setting up a deferment account, which allows payment of customs charges by a single monthly payment on the fifteenth day of the month following the month of import. Deferment is subject to an application process and requires a bank guarantee as security.

HMRC’s latest Technical Notices on the no-deal picture for customs can be found on its website here.

What happens next?

HMRC says that further ‘no deal Brexit’ information on VAT, customs and excise duties will be published in January, including details of how these may apply at the Northern Ireland land border. Meanwhile, a withdrawal agreement between the UK and EU, which could keep the UK in the current EU VAT and customs systems for a transition period after 29 March 2019, is still a possibility, so the VAT and customs implications of Brexit remain subject to change.

For the time being, businesses should continue to prepare for a no-deal Brexit and watch out for further developments. The following BDO information may be useful:

BDO: Brexit Planning Tool

BDO Hard Brexit Trade Assessment

BDO Insight: Why Authorised Economic Operator status is essential for manufacturers with non UK supply chains

BDO Insight: Brexit - Government sets out its no deal plan for VAT

BDO Video: AEO status and customs reliefs

BDO video: assess your supply chain