November 2, 2020

Imports from the EU into the UK post-Brexit

UK, Third country to the European Union

On the 1st January 2021 the final phase of the UK’s exit from the European Union will be complete, meaning that the UK will be a 3rd Country to the European Union from this date forward.

Traders will in future be required to undertake customs processes for the goods moving over the EU-United Kingdom border. Here are the documentary options for the mandatory customs processes that will be required from the 1st January 2021 for goods being imported into the United Kingdom.

Utilization of Customs Freight Simplified Procedure (CFSP) – a customs authorisation that facilitates:

  • The filing of a simplified frontier declaration (SFD) with a reduced data set.
  • The supplementary declaration has to be submitted by the 4th day of the following month whereby any Duty & VAT would need to be either paid or deferred on the importer’s Deferment Approval Number

This customs facilitation is usually available through an intermediary agency who will act on behalf of the importer. 

Deferred Declarations – a customs easement which is available until July 2021:

  • The staged approach announced by the UK Government allows traders to make a record in their own commercial records at the point of entry of goods into GB, and then follow this with a supplementary declaration which must be submitted to HMRC within six months of the point of import. 
  • Any duty would need to be paid or secured by Deferment upon submission of the supplementary declaration 
  • Requirements to defer declarations - traders will need a GB EORI number to import. By the time they need to submit the supplementary declaration they will need access to an authorisation for simplified declarations for imports and a Duty Deferment Account. “Access to” means that either the trader or an intermediary acting on their behalf must be Customs Freight Simplified Procedures (CFSP) authorised and have a Duty Deferment Authority. The UK Government expects that for most traders it will be beneficial to use their intermediary’s CFSP authorisation but to have their own DDA. If traders do use their intermediaries’ authorisation, from January 2021 traders will be able to do so without the intermediary becoming jointly liable. 
  • VAT - VAT registered traders who are eligible to defer their supplementary declarations must use postponed VAT accounting. This means they will need to account for import VAT on their periodic (usually quarterly) VAT return which includes the date they imported the goods. To do this they will need to estimate the import VAT due from the records of imported goods they are required to keep in their own commercial records. When they submit their deferred declaration, they must adjust this estimate to precisely account for the import VAT due on a later VAT return.

Goods subject to controls such as excise goods, tobacco goods and alcohol are excluded from this facilitation.

Submission of full entries prior to ferry boarding at the EU Ro-Ro terminal

  • Enables the trader to take advantage of the VAT postponed accounting easement
  • Have the option but not compelled to account for import VAT on their VAT return by using postponed VAT accounting.
  • Postponed VAT accounting requires registration within the Direct.Gov application in order to receive the electronic statements as required for VAT accounting purposes.

Common Transit

  • Movement under the customs transit document T1 from an authorised consignor location through to an authorised consignee location in the UK, removing the need for customs clearance processes at the frontier.
  • The import clearance process would take place at the authorised consignor location.
  • An authorisation must be held for the use of Common Transit within the NCTS (New Computerised Transit System) environment

Movement under TIR Carnet

  • An alternative to the T1, the TIR (Transports Internationaux Routiers) carnet is typically used where more than one border is to be crossed, such as a movement from Turkey.
  • Reduces the risk of physical checks at the frontier, however, the system of vouchers would mean that the vehicle would be required to contact customs at each border post on both sides of the frontier.
  • The use of this system is subject to the utilisation of certified loading units.
  • An authorisation must be held for the use of TIR carnets

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