From our recent experience, many companies have not prepared adequately for Brexit, on the assumption that there would be some kind of alternative trade deal.
It looks quite likely that it won’t happen or there will a requirement for of export or import process required for shipping goods to and from the UK. Subsequently, there is now a bit of a scramble to ensure that they are ready for the changeover from 1st Jan 2021.
Shippers will be required to submit export or import documentation to HMRC, via a process called Customs declaration.
Northern Ireland, although still in the UK, with the border in the Irish see, documentation (Customs declaration) would be required in order to ship product to or from Northern Ireland.
It is not too late to prepare. Shippers can prepare by getting the following information now –
- Product Sales value
- Inco terms (internationally recognised shipping terms – common simplified examples are ex works or delivered), the inco terms determine who pays the duty, importer or exporter.
- commodity codes – a 10 digit code classifying the product being shipped – specified on the UK GOV website
Shippers can appoint a broker, an expert to prepare the customs documentation and process with HMRC, many brokers have systems which integrate with the governments CHIEF customs system therefore enabling goods to be cleared for shipping overseas.
Shippers can setup a deferment account – This is not essential, shippers can rely on the deferment account of the broker, however in this case duty and or VAT will often need to be paid in advance of shipping. A deferment account essentially means you can delay duty and VAT payments to the following month when it will be taken by direct debit on the 15th of the month – giving up to 45 days payment terms.