Brexit export goods GB to EU; customs & VAT

This update provides the customs and VAT procedures for the export of goods from GB into the EU from 1 January 2021. You can review Avalara’s Brexit importing goods into the UK from the EU guide here. A Brexit free trade deal with no goods tariffs or quotas was announced 24 December 2020. There is a separate process for Northern Ireland Brexit VAT and customs.

If you want to contact the author for free VAT guidance on related issues: richard.asquith@avalara.com

The UK is now out of the EU VAT regime and customs union from 1 January 2021 following the Brexit transition period. The UK has introduced its new Border Operating Model for the control of imports and exports of goods between the EU and UK excluding Northern Ireland (‘GB’ or ‘Great Britain’).

Exporters from the UK should follow the following steps from 2021, and you can contact Avalara's Brexit Team to learn more about any aspect of these services.

1 Who will export the goods from GB?

Determine who will be the exporter of record and therefore responsible for the UK customs paperwork and export clearance, transport, insurance and other issues relating to the goods movement. This is contained with the in the International Commercial Terms (Incoterms) agreed in the sales contract. Typically, it is the GB supplier. They may also take responsibility of the customs clearance and import VAT for the goods into the EU. This Brexit-popular Incoterms basis is known as Delivered Duty Paid (DDP).

2 Obtain a UK EORI number

The exporter will need a UK Economic Operator Registration Identification number from HMRC. This is a unique identification number used on export (and import) paperwork to identify the exporter with customs authorities. UK businesses should already have has this issued from HMRC in preparation for Brexit in 2019; it may be obtained quickly if not. EU businesses acting as the UK exporter may apply to HMRC for one.

3 Check if you need an export licence

Certain controlled goods require an export licence or certificate. This includes: chemicals; goods; excise goods; livestock and foodstuffs.

4 Ensure you are eligible for export VAT exemption

Export sales are exempt from UK VAT. However, to be entitled to this relief, the exporter will need proof of the departure of the goods from GB. This could include sales invoice, customs declarations, bill of lading documents and transport documents.

5 Decide how you will complete export declaration

As an exporter you may complete customs export declarations and processes yourself, or appoint an intermediary:

5.1 Complete your own customs export process

5.2 Use customs intermediary

You can purchase commercial declarations software

This will enable you to complete your declarations and file with the UK National Export System (NES).

You will need to apply to HMRC to register for NES and for a ‘badge’ for HMRC's online customs systems: CDS and CHIEF

The following parties are usually approved by UK HMRC to represent exporters:

Freight forwarders
Customs agent or broker
Fast parcel operators

6 Information required for your exit declaration

Irrespective of who completes the export paperwork, you will need to compile the following information:

Commodity code for the product, which identifies the digits that identify a product, its materials and production method. The EU uses the six-digit global Harmonised System, or HS Code, and adds a further two digits 'CN heading'.
Departure point and destination
Consignee and consignor
Nature, amount and packaging of the goods
Transport method
Any certificates and licences
An exporter statement of origin to allow your importer to qualify for zero tariffs.

7 Moving the goods

You or your customs intermediary submits the completed customs export declaration to NES for a unique consignment number. This enables you to export the goods from GB and clear customs.

8 EU import customs declarations

At the same time, the EU import processes must be completed to ensure your freight forwarder and transport provier will accept the shipment. If supplying on DDP (see above) this will be you. This includes:

Applying for an EU EORI number. UK importers and exporters into the EU will need a customs intermediary and use their EORI number. This is because they are now non-resident within the EU Customs Union.
Securing any import licence.
Having the exporter's statement of origin to qualify for EU zero tariffs under the 'rules of origin' requirements.
Completing EU customs import declarations for the EU member state of import, and this is filed with the relevant country’s customs system
Applying for deferred VAT / Postponed VAT to ensure you do not have to pay import VAT.
If you are clearing the goods, consider an EU VAT registration with Fiscal Representation obligation.

9 Completing Intrastat after Brexit

The UK's HMRC is no longer expecting monthly Intrastat declarations for the export of goods from GB to EU from 2021. However, movements between NI and EU will require Intrastat and imports from EU to GB.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.