The UK has left the EU Customs Union and Single Market. As of January 1st, 2021, the movement of goods between the UK, the EU, and third countries is subject to certain changes. It is important for all Pallet2Ship® customers to understand these changes before placing any orders with us.
If your company is involved with trading or movement of goods between the UK and EU or trading with the UK but using EU Free Trade Agreements, the way you operate will be affected by Brexit. Key points to remember include:
The EU / UK Trade & Cooperation Agreement (TCA) only allows for the duty-free movement of UK and EU originating goods.
The statement of origin must be provided on invoices and any other commercial document. It must describe the originating product in enough detail to ensure it can be identified.
All shipments, wherever they originate, now require customs clearance. All shipments between the United Kingdom and EU require full customs clearance. For customers who only deal with the EU, this means familiarising yourself with customs procedures and relevant documentation. We'll cover all this here, so you have full confidence in shipping with us.
Please note: shipments coming from Great Britain and going to Northern Ireland may be subject to the clearance process, but there will be no taxes or duties.
For both UK to EU and EU to UK shipping there is new paperwork and data required, for each shipment. We're looking at this in depth, providing all the information you need to ship your pallets and packages safely and with no surprise charges or paperwork issues.
Changes to VAT
The implications of Brexit on VAT differ depending on circumstance. The liability for VAT depends on the incoterms (something we discuss more below) and payment terms of the shipment.
If you are exporting from the UK into the EU on your own behalf (e.g., incoterm Delivered Duty Paid), your business is liable for both duty and import VAT, and if you are delivering directly to your customers, you will also need an EU VAT registration.
Shipping to an EU country from the UK requires some additional documentation including:
1. A Commercial Invoice
Businesses that regularly ship outside the EU will already be familiar with commercial invoicing, but if you've only ever shipped to the EU, these invoices are a new and important form of documentation necessary to ship to Europe.
The commercial invoice is mandatory for all shipments crossing customs borders with the EU. It describes the goods and their value, helping to determine the customs duties owed. Pallet2Ship® customers need to generate their commercial invoices via our website to speed up the process and make it as straightforward as possible.
An Economic Operator Registration and Identification (EORI) number is needed for all importers and exporters. You can register for an EORI number at www.gov.uk/eori and it is used during the customers clearance process. It is now a mandatory requirement for shipping into the EU from the UK.
Incoterms are an internationally recognised set of 11 rules which define the responsibilities of sellers and buyers. Incoterms specify who is responsible for paying for and managing shipment, insurance, documentation, customs clearance, and other logistical activities. It is important to agree incoterms with your customer as they must be included on the Commercial Invoice. You can find out more about Incoterms in this guide.
4. Commodity Codes
Commodity codes are used to classify goods so you or your chosen broker can properly complete export declarations. If you aren't sure of the right codes for your shipments you can find out more from your national customs authority, as most provide comprehensive guides to help export and import companies.
Some of the requirements when shipping goods into the United Kingdom from Europe match those already discussed above but there are also some further considerations.
You will still need an EORI number when shipping from the EU into the United Kingdom. As of January 2021, it has been mandatory to have a GB EORI number for both imports and exports and it must be included on all shipping documentation, most importantly the commercial invoice.
2. Customs Broker
Pallet2Ship® acts as customs broker for many of our clients. We ensure customs clearance for both imports and exports runs as smoothly as possible and shipments are not unnecessarily delayed.
3. Deferring Duty Payments
If you regularly import goods from Europe, then a deferment account could be something you want to consider. Deferment accounts allow you to delay paying customs or tax charges when importing goods, but there are some considerations to meet. You can explore this in more depth here.
4. Tax and Duty Accountability
If you are receiving goods from the EU, you are legally obliged to pay Duty and Taxes (VAT) unless the sender has accepted these charges in the contract of sale. This should be shown in the chosen incoterm for the shipment.
The team at Pallet2Ship® are working to ensure our customers can continue their pallet deliveries to and from the EU without difficulty. We'll handle as many concerns as we can for you, but meeting the requirements above is important before you place an order.