The UK has struck a free-trade agreement with the EU, which allows most businesses to continue selling goods to customers on the Continent. However, UK companies must make sure they have the relevant paperwork and authorisations in place in order to trade. This means reviewing customs and excise procedures, as well as your system for making VAT payments and claiming refunds. Occasional exporters making less than 15% of turnover from the EU may decide to pause these sales – or move them onto a platform like eBay or Amazon that takes care of all the red tape and paperwork – in the short term as there may be a disproportionate amount of effort required.
To trade goods with EU countries, you need an Economic Operator Registration and Identification number. This number will begin “GB…”. HMRC began issuing this number to importing and exporting business in the UK last year but if you haven’t received one you can apply direct.
UK exporters selling to the EU must now make customs declarations. You can use the Simplified Declaration Procedure to save time after receiving an order, as this requires including fewer details before shipments take place. You’ll need to provide a supplementary declaration two weeks later. To use simplified declarations, you’ll need to be authorised by HMRC and registered to use the National Export System. Once registered on the National Export System, you can also take advantage of the C21 form, which allows you to make an entry in your records when exporting goods that do not need a pre-departure declaration – quick and easy. Again, you’re just deferring the paperwork, as it will need to be completed in full two weeks later.
Transport and logistics
The government has advised UK businesses to use a customs broker or freight forwarding service when exporting – at least in the short term – as they can take care of the significant amount of paperwork required. Please note that there are a number of new rules to follow so do look into the detail affecting your particular goods as well as general housekeeping, such as including three copies of commercial invoices with shipments as one is kept by customs agents each side of the border and one must remain with the goods. Failing to include three copies of the invoice will result in delays.
VAT does not currently apply to UK exports as they are zero-rated. However, VAT may be payable in the country that is importing the goods. You have a few options, when it comes to VAT. You can make your EU customer pay the freight forwarder but you probably won’t get another order from that customer. You can VAT register in the EU country you are trading with (though you need to be making a significant proportion of your sales there to make this worthwhile) as this comes with cost and compliance considerations. If your customer in the EU is a repeat buyer then you can give that customer Power of Attorney so that they become a Buyers Agent, meaning that you pay the fees but don’t have to be VAT registered in their country. This process takes time to complete so expect no quick fixes. You can also move your export sales onto a platform that takes care of EU fulfilment such as eBay or Amazon.
For exporters who are getting to grips with post-Brexit trade, a good place to start is the Government’s online survey for exporters to the EU.
Here is the full detail of the UK’s Brexit trade deal with the EU
Apply for your EORI
Register for National Export System
Rebecca Burn-Callander is a freelance journalist specialising in writing about small businesses and entrepreneurs. She published The Daily Telegraph Guide to Brexit for Business in 2019.