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UK help with Brexit customs declarations

  • Aug 11, 2020 | Richard Asquith

The UK will leave the EU’s Customs Union on 31 December 2020 at the end of its Brexit transition period. This means goods moving between the UK and EU will require customs declarations paperwork, and potential payment of tariffs. The details are still be negotiated by both sides as they work towards a Free Trade Agreement. The UK also leaves the EU VAT regime at the same time.

HMRC estimates that over 200,000 UK businesses will need to complete such bureaucracy for the first time. Whilst they could consider mastering the process themselves, outsourcing the requirement may make more sense given the complexity and short time table.

Alternatives parties that can assist with customs clearance, and who must be UK resident, for UK imports include:

1 Freight forwarders

Freight forwarders are responsible for moving goods cross-border. This can include arranging the clearance of goods through UK and EU customs. They will generally have automated access to the UK’s customs systems (CDS and CHIEFS), and the EU27 national systems.

A freight forwarder is responsible for the transportation of goods between one destination and another.  The UK’s HMRC can provide a list of approved forwarders. They act as an intermediary between the shipper and transportation services, liaising with various carriers to negotiate on price and decide on the most economical, reliable and fastest route.

2 Customs agent or broker.

Customs agents ensure goods clear through customs, and may act as a direct or indirect representative.  A customs agent offers a customs clearance and representation service to traders importing and/or exporting goods from/to the European Union. This includes lodging import/export customs declarations to Customs (HMRC in the UK) and facilitating the payment of import duties, VAT, excise duty etc. on behalf of importers and exporters. For intra-EU movements, some customs agents file their clients’ statistical data into “Intrastat”. 

Direct representation means the agent acts in the name of and on behalf of the principal. They are equally responsible for making sure the information is accurate jointly and severally liable for any duty or VAT. The indirect representative performs legal actions in the name of the principal, but on their own behalf.  

3 Fast parcel operators

Fast parcel operators transport parcels and freight internationally within a specific timeframe. This may include customs clearance. A number have been approved by HMRC to move goods under simplified memorandum of understanding. The enables goods valued up to £873 may enjoy reduced customs procedures.

Need help with your UK VAT compliance?

Researching UK VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade. 

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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.
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