Brexit customs, exports & excise issues are perhaps the most confusing area for most businesses attempting to plan for Brexit. With rules, guidance and decisions changing by the day, feelings of frustration, despair and a general lack of clarity are unfortunately all too common.
The government has suggested that they may indeed ‘slash’ trade tariffs, according to the BBC, but there is no confirmation as yet. At the point of reading this, the rules may have changed once again.
So, what do we know? After all, it’s better to focus on that which we can control rather than fretting about the unknown. Below you’ll find the steps you need to take to plan for the Brexit challenges that lie ahead (which many businesses have still not taken).
This is CRUCIAL. Register and get your UK EORI number as soon as possible. Without it, you’re facing a whole world of complications once we leave the EU. You may have a European EORI number but that isn’t enough, you need a UK one. You should receive your number within a couple of days after applying. DO IT NOW.
Brexit: Customs Freight Simplified Procedures (CFSP) changes
If you’ve previously been relying on a forwarder to manage this for you using their CFSP authorisation, you will no longer be able to do so following our exit from the EU. You must have your OWN internal authorisation. The forwarder can still manage this for you but will no longer be able to put you through via their CFSP arrangement. The suggested limit for this Brexit customs change is October 2019 – so get moving on this if you think you may be affected.
Guidance on CFSP can be found on the Gov.uk website here.
Transitional Simplified Procedures (TSP)
You can register for TSP now but you must have your EORI number to do so. TSP aims to simplify imports by allowing those registered to transport standard goods by making a standard customs declaration within their usual business records. In simple terms, as long as you have the basic information around purchase, ship, and due date all logged your import should be fairly straightforward.
For controlled goods, those who hold TSP registration can make a ‘simplified’ frontier declaration’ to HMRC up to 2 hours before goods are due to arrive at the border. The importer will then have 24 hours to update HMRC that the goods have arrived. Import declarations must be submitted by the 4th day of the following month and payment of all duties are payable on the 15th day of the month following that.
All declarations can be made via the online portal to HMRC. Whilst the importer cannot use their TSP to manage your imports, they can manage this on your behalf as long as you have your own TSP registration.
A few things to note around TSP:
- You must be a UK ‘Established’ company. The exact meaning behind ‘established’ is unclear but is suggested that as a business you have a UK presence, sales office, UK registered company, manufacturing operation, etc.
- TSP is a limited option as it presently stands. The government are due to review TSP after 3 months but have stated that they will give a 12-month notice to any change or termination. (Many believe that TSP will be effective for a number of years but there is no confirmation of that from the government as yet).
Customs Comprehensive Guarantee (CCG1)
Goods exported to the EU will be tied to a Customs Comprehensive guarantee once we leave; a transit guarantee for exports. You will need to apply for a CCG1 via the HMRC. CCG1 will allow you to defer some of the customs duty payable after Brexit – alleviating some of the pressures from holding cash reserves and transferring money via deferment accounts. Once again, you’ll need your EORI number.
You can apply for a reduction in the amount of cash required if you complete a GGC1a questionnaire. If you have AEO status, you can skip this step.
Authorised Economic Operator status (AEO)
You can apply for AEO status for customs simplification (AEOC), AEO status for security and safety (AEOS) or both. Anyone involved in the international supply chain that carries out customs related activities in the EU can apply for AEO status regardless of the size of their business.
AEOC status is the most common and by far simpler to achieve. Generally, any business that fulfils the specified criteria below should be able to get AEOC status:
- Good tax and customs compliance history
- Good commercial and transport record-keeping standards
- Financial solvency
- Professional qualifications, or demonstrating practical standards of competence in the activity they’re involved in
If you hold AEOC status, you could benefit from:
- A faster application process for post-Brexit customs simplifications and authorisations as detailed above
- Reductions or waivers of comprehensive guarantees
- Moving goods in temporary storage between different member states
- A notification waiver when making an EIDR
- A 70% reduction in a business’s deferment account guarantee to the customs duties
- Undertaking centralised clearance (when available)
- Completing self-assessment (when implemented)
To obtain an Authorised Economic Operator (AEO) certificate, you must have an EORI number and complete an application pack which contains a C117 form (basic information about the business) and a C118 form (detailed questionnaire about your business activities). Both forms must be sent together to HM Revenue & Customs (HMRC) to enable the application to be accepted and processed.
About our Guest Blogger:
Rachel Sellers is a Principal Supply Chain Consultant at Industry Forum, which provides Brexit-related training, consultancy & project management support to help Supply Chain, Logistics and Operations professionals cut costs, increase efficiency & improve service.
Dealing with Brexit-related Supply Chain, Logistics or Operations strategies requires the right team.
Make sure your recruitment and retention strategies are Brexit-ready with our Brexit Recruitment Checklist.