Post-Brexit changes to Customs declaration procedures have been phased in to reduce the immediate impact for businesses and the next phase takes effect from 1 January 2022.
Customs declarations on goods imported from the EU (apart from Ireland)
As a temporary measure after Brexit (1 January 2021), HMRC allowed a 175-day delay in submitting Customs declarations. For most imports from the EU, this temporary delay rule ceases from 1 January 2022. The only exception is that the 175 delay in declarations can continue for imports from the island of Ireland (even where the goods originate elsewhere in the EU and are moved through Ireland or Northern Ireland enroute to Great Britain). This concessionary treatment will continue to apply while negotiations with the EU continue on the Northern Ireland protocol. Where the delay facility is used, any duty payable is also delayed until the declaration is made. However, any import VAT must be reported and paid for the VAT period covering the import date.
Therefore, from 1 January 2022 a full Customs declaration must be made for goods arriving in the UK from the EU (pre-lodged) before any goods enter Great Britain from the EU (apart from Ireland as per above).
Animal and plant products imported from the EU (apart from Ireland)
Pre-notification requirements of all Sanitary and Phytosanitary (SPS) goods moving from EU to Great Britain will be introduced on 01 January 2022. However, as with Customs declarations, such goods imported from the island of Ireland will be exempt from these requirements while negotiations with the EU continue on the Northern Ireland protocol.
This means that goods movements into Great Britain must be pre-notified via the government’s Import of products, animals, food and feed system (IPAFFS) before the shipment takes place. This affects ‘Products of Animal Origin (POAO)’ – for example meat, honey, milk or egg products – as well as fruit, vegetables and flowers. Any physical checks currently in place will continue to be conducted at the point of destination until July 2022.
From 1 July 2022, movement of certain goods will become subject to three checks. First there will be an electronic document check to confirm the consignment of goods has the right commercial documentation and certification. Prior to departure there will be an identification check on the seal applied to the consignment. On arrival there will be a physical check of the goods. These rules will apply to:
- All meat and meat products
- All regulated plants and plant products
- All remaining regulated animal by-products
- All remaining ‘high-risk’ food not of animal origin.
Checks on high-priority plants and plant products will no longer take place at the place of destination from 01 July 2022, instead they will be carried out at designated Border Control Posts (BCPs) or Control Points.
From 01 September 2022, the same certification and physical checks are due to be introduced also on dairy products imported from the EU.
Finally, from 01 November 2022, certification and physical checks are to be introduced for all remaining regulated products of animal origin, including composite products and fish products (eg fish fingers). In addition, physical checks on live animals will take place at designated BCPs where a facility is operational at the point of entry (where there is no designated BCP, checks will remain at destination for other ports of entry until sufficient BCPs are operational).
Supplier declarations on origin for UK exports
The EU-UK Trade and Cooperation Agreement (TCA) allows goods exported from the UK to the EU to benefit from reduced rates of Customs Duty (typically 0%) but the exporter must be able to prove that goods exported originate in the UK.
The 'origin' of goods means where they (or the materials, parts or ingredients used to make them) have been produced or manufactured – read more on origin of goods. UK exporters need to issue a ‘statement of origin’ so that the preferential tariffs can be applied by the EU customer/ importer.
From 1 January 2022, where the exporter cannot issue a ‘statement of origin’ based solely on the production or manufacturing criteria for their work on the goods alone, declarations from their own suppliers about the origin of the components of the goods must be held before the exporter issues the overall ‘statement of origin’ for the finished goods. Note that there is no legal obligation for a UK exporter to share the supplier declarations with the buyer/importer – only with HMRC. From a commercial viewpoint, however, the exporter may want to provide the buyer/importer reassurance by voluntarily share its supplier declarations.
Please note that under the terms of the TCA, the customs authority in the EU member state of import can ‘instruct’ HMRC to carry out a customs origin audit on a UK exporter, if the EU customs authority believes that UK preferential origin is being applied incorrectly. This is an important point, because some EU customs authorities have historically adopted, and continue to apply, strict controls and checks around EU companies claiming preferential origin at import. If a UK business can’t provide supporting evidence when asked by HMRC to verify the origin of the goods exported:
- The EU customer will be liable to pay the full (non-preferential) rate of Customs Duty
- The UK business may be charged a penalty
- The UK business may be blocked from using preferential tariffs going forward.
From 1 January 2022, Intrastat declarations will only apply to movements of goods between Northern Ireland and the EU (and vice versa). Therefore, the 2021 requirement for businesses in Great Britain to continue to submit Intrastat reports for Arrivals will cease.
While HMRC have taken a relatively light touch to Customs declarations and procedural requirements throughout 2021, 2022 will see things return to business as usual with penalties for incorrect Customs declarations. Read more on penalties for Customs Duty errors.
Get help with Customs declarations
While you can delegate Customs procedures to a freight forwarder or logistics company, if there are errors in Customs declarations for your goods, it is your business that will be liable for any penalties (which can be charged even if there is no duty payable). If you need help with your declarations or simply want to validate the service you are getting from an agent, please get in touch with Hakan Henningsson, Juliet Wallwork or Matthew Clark.
Read about BDO’s Customs Duty Declaration Assessment Tool.