Updated GB-EU Border Guidance
Date published:
The Chamber looks at the UK Border Operating Model and how business can take steps now to prepare for the new UK Border.
The UK has launched it’s updated UK Border Model. Any business trading with, through, or involved in EU trade operations, especially hauliers, must read this document- Click Here.
The Model
The model details the future of the GB-EU border, from 1st January 2021 (Ireland-EU has its own special arrangement). The plan is to “phase-in” the border, allowing your standard (“non-control”) goods to enter the UK on a simplified customs declaration, allowing business to complete a full declaration and pay any full duty later (before July 2021).
From January to July, the border will be extended to more sensitive goods, this will give business, and HMRC, time to adjust to new custom details & processes.
Inland Clearance
The main update is how the UK will deal with customs. The updated plan is to establish ten inland clearance sites, to support ports either constrained by space or overwhelmed by demand. These inland sites, such as lorry parks, will act as safe zones for customs checks or processes to be conducted.
Alongside this, Heavy Goods Vehicles will need special Kent Access Permits, to enter Kent county, home of Dover. Only those with the required completed trade documentation will be able to enter or face time and cost penalties.
Hauliers Readiness Service (previously Smart Freight)
To assist hauliers with the wave of new processes, especially when handling the new EU border, the Government is setting up a “Check an HGV is Ready to Cross the Border Service”. Hauliers will be able to submit information of their goods into the system, which will either advise them they can travel, or that information is missing.
Getting this wrong could mean financial and time penalties at either the UK or EU border, and result in further at border queues and delays.
It is pleasing to see real and practical information on the issues that will face business at the border in 2021, however there are still many unanswered questions such as customs requirements, regulatory alignment and Rules of Origin.
The British Chambers said: “With just over 80 days until the end of the transition period, the businesses that produce the £300bn of UK exports to the EU are desperate for news of a comprehensive free trade agreement that will provide jobs and future prosperity across the United Kingdom.”
I’m just thankful this UK Border Model has a contents page….
EXTRACT OF UK BORDER OPERATING MODEL GUIDANCE FOR BUSINESS (p27)- * indicates Chamber comments.
-> You must apply for a GB EORI number
This is required for all businesses (traders and hauliers) moving goods into or out of GB, including those delaying their import declarations. Further information, including a link to apply for an EORI number, is available here. It can take up to a week to get one, and around 5-10 minutes to apply. VAT registered businesses with EU trade were previously enrolled with an EORI number, so should check whether they already have a number before applying. EU based traders and hauliers will need a GB EORI number to carry out border formalities in GB.
*You can apply or check for an EORI by clicking here
-> Apply for an EU EORI number
Some GB traders or hauliers may also need to apply for an EU EORI number. Traders need an EU EORI number if their business will be making customs declarations or getting a customs decision in the EU.
*You can find an EU EORI number via that member states Customs Authority.
-> Get a Customs Intermediary
Customs declarations are complicated as detailed in SECTIONS 1.1.3, 3.1.3 and 4.1.3. The majority of businesses that currently trade outside the EU use an intermediary, such as customs agents, Fast Parcel Operators (FPOs), Freight Forwarders (FFs) or brokers, to help them meet the customs requirements set out in this document.
Intermediaries can help traders find the information needed to complete formalities and submit the required declarations, for example customs information such as the value and origin of goods to HMRC systems such as CHIEF, as detailed in SECTION 3.1.4. This simplifies the declaration processes for traders. Further information can be found here. The UK Government has announced a grant scheme to support intermediaries and those businesses who want to make declarations themselves.
If a business decides not to use an intermediary, they will need to make declarations themselves. To do this they will need to get access to HMRC systems and to purchase software, as detailed here.
GB Traders may also need an EU intermediary or fiscal representative to carry out export and or import formalities in the EU. More detail can be found in annex A and B of this document.
-> Apply for a Duty Deferment Account
Traders who import goods regularly may benefit from having a duty deferment account (DDA). This enables customs charges including customs duty, excise duty, and import VAT to be paid once a month through Direct Debit instead of being paid on individual consignments. VAT registered traders can account for import VAT on their VAT return using postponed VAT accounting, as detailed below. To set up a DDA, traders, or their representatives, apply for a deferment account number (DAN) and will need to be authorised by HMRC, as detailed here. New rules are being introduced which will allow most traders to use duty deferment without a Customs Comprehensive Guarantee (CCG).
-> Prepare to Pay or Account for VAT on Imported Goods
If you are VAT registered and completing full customs declarations from January and have chosen not to defer your customs declaration, you will be able to use postponed VAT accounting to account for import VAT via the VAT return. This is a choice for individual businesses.
If you are importing non-controlled goods and either delaying your supplementary customs declaration, or using Simplified Customs Declaration process, where authorised to do so, and make an Entry in Declarants Records, the businesses must account for their import VAT on the VAT return.
Non-VAT registered traders (and any VAT registered traders not using postponed VAT accounting) will need to report and pay import VAT through the customs processes. Within this context, VAT payments can be deferred using a duty deferment account DDA as outlined above.
With regards to VAT on imports of goods in consignments not exceeding £135 (excluding Excise and consumer to consumer consignments), we will be moving the point at which VAT is collected from the point of importation to the point of sale. This will mean that UK supply VAT, rather than import VAT, will be due on these consignments and therefore accounted for via the VAT return.