Breezing Through Brexit – Understanding The Import-Export Jargon

You know how government loves a three letter acronym? These are in abundance within Brexit related matters, peppered with others too!

Unfortunately, this means you’ll need to learn a few new ones ready to trade internationally from next January 2021. Here are just a few of the terms and actions required:

• C79 – Import VAT certificate - proof of VAT paid on import
• C88 = SAD
• C88A – Postal version of the C88
• CCG – Customs Comprehensive Guarantee
• CDS – Customs Declaration Service
• CN22/23 – Customs forms for postal imports and exports up to £900
• CPC – Customs Procedure Code
• DDA – Duty Deferment Account
• DAN – Deferment Account Number
• EORI – Economic Operator Registration and Identification number
• FPOs – Fast Parcel Operators
• FFs – Freight Forwarders
• NES – National Export System – Usually operated by an intermediary.
• RMG – Royal Mail Group
• SAD = C88 – Single Administration Document for non-RMG postal imports and exports over £750

You’ll see that you could get very distracted from running your business trying to work your way through this. It’s therefore likely you’ll need to use the services of cross border operators (intermediaries) to help you navigate the system. 

Importing Goods? 

What essentially do I need to do? 

1. Get a GB EORI number.
2. Check import tariffs on the goods you are importing.
3. Check the commodity code for your products.
4. Appoint an intermediary such as an FPO, FF, customs agent or broker to complete the paperwork such as SADs.
5. Use an intermediary with a DDA to make returns on your behalf into the CDS.
6. Use CN22 and CN23 when importing goods with RMG.
7. Use your intermediary’s DDA to defer customs duty and VAT to a monthly payment.
8. If VAT registered, postpone import VAT for longer through your quarterly VAT return.
9. Imported items with a value less than £135 should have charged VAT on the seller.
10. Importers of items with a value of less than £135 where VAT hasn’t been charged, must account for the VAT under the reverse charge mechanism.
11. If bringing in goods in your own luggage with a value under £1,500, make an online or oral declaration.

Exporting Goods?

What essentially do I need to do?

1. Get a GB EORI and an EU EORI number.
2. Check what export licenses you might need.
3. Check the commodity code for your products.
4. Appoint an intermediary such as an FPO, FF, customs agent or broker to make overseas customs declarations and returns for you.
5. Check exactly what an intermediary can and cannot do for you.
6. Prepare a commercial invoice.
7. UK VAT is likely to be 0%.
8. Register for local VAT if exporting large volumes to consumers in the EU.
9. Use CN22 and CN23 when exporting goods with RMG.
10. If taking out goods in your own luggage with a value under £1,500, make an online or oral declaration.

Supplying Services?

You may be like many UK businesses and provide only services. What changes do you need to make?

If you sell B2B and currently don’t charge VAT on invoices to EU customers, it’s likely that UK VAT will still not be charged.

If you sell B2C and currently charge UK VAT, it’s likely that UK VAT will still be charged.

However, if you sell automatically downloadable digital services such as apps and e-books, to consumers in an EU country, you’ll need to register for VAT and pay EU VAT in each EU country. Or take advantage of EU VAT MOSS administration where you register in one EU country which collects all EU VAT and pays it over to each EU country depending on your sales in each country.

Certain prescribed professional services provided to consumers such as advertising, consultants and accountants may become outside the scope of UK and EU VAT, as they currently are for non-EU consumers.

What else do I need to do?

Go to this tool: https://www.gov.uk/transition  for more details.

After you’ve input the shape of your business plus also your personal requirements, you get a comprehensive list of links and actions not only for your business, but also for your personal life.

As this is a changing landscape, always check back with HMRC, your intermediary or adviser before you make any final decisions.

Remember to build in additional costs such as customs duty and intermediary services into your budgets and review your pricing structure.

Ensure you don’t miss out on grants, some old, some new, that might be available to you such as: https://www.gov.uk/government/news/20-million-in-new-grants-to-boost-recovery-of-small-businesses

Happy international trading!