With 31 October fast approaching and a potential ‘no deal’ Brexit on the horizon, we want to make sure you’re as prepared as you can be.
We’re here for you: if you’re unsure or need support, please contact the Brexit team or your local Kuehne + Nagel contact.
Important Links and Information:
1. Top level UK Government guidance is available here
2. Do you have an EORI number?
To import or export goods from/to the EU post-Brexit you must have an EORI Registration number. Please follow this link to see the requirements and apply here We will need the EORI Registration number from you to customs clear your goods at import or export, before any goods leave the EU for the UK, or vice versa.
This is a requirement regardless of who controls the shipment of goods; as per the Incoterm® agreed between you and your supplier or customer.
3. Are you intending to register for Transitional Simplified Procedures (TSP) for IMPORTS?
These are procedures being offered by the UK Government to importers from the EU. They do not apply to exports. They intend making imports into the UK from the EU much simpler for the majority of importers. They should reduce the need for import declarations at the time of import and may offer a to-be-confirmed six-month window to complete fiscal declarations.
There are some types of goods (see 3) that can’t use TSP but otherwise we strongly recommend all importers consider registering for TSP. Details and an application portal can be found here
We will need to know your TSP registration details before any goods leave the EU for the UK.
This is a consideration you should make, regardless of who controls the shipment of goods; as per the Incoterm® agreed between you and your supplier or customer.
4. What sorts of goods cannot use TSP Standard at IMPORT?
The following goods must use the TSP Controlled Goods Procedure:
- Goods subject to excise duty
- Military goods, explosives, firearms, torture equipment etc.
- Fish and fish products
- Endangered species
- Controlled drugs
This is not an exhaustive list; please see full details on the website shown at 2.
Please note that some ‘high risk’ imported goods may be subject to further checks, even if you are registered for TSP (see 4).
5. What other ‘high-risk’ goods may be subject to additional checks at import from, or export to, the EU?
This applies at import even though you may be registered for TSP
- Animals and animal products
- Plants and plant products
- Dairy products
- ‘Dual-use’ goods
- Certain non-manufactured wood products (e.g. packing cases, pallets)
You need to tell us if you IMPORT any of these goods before they leave the EU for the UK; as they will require a full import clearance, and possibly examination by UKBF or other government departments upon arrival into the UK. Such goods may not be able to be cleared at Dover or via the Channel Tunnel.
You need to tell us if you EXPORT any of these goods before they leave the UK for the EU. They may be subject to possible examination at export from the UK, at import into the EU and may require specific documents, certificates or licences before they can ship and/or examination by UKBF or other government departments upon arrival into the UK. Such goods may not be able to be cleared at Dover or via the Channel Tunnel.
6. Have you provided Kuehne + Nagel Ltd. with a ‘Letter of Empowerment’?
In order for us to act on your behalf when making import or export customs declaration; you must provide us with a Letter of Empowerment.
7. Are you, or your supplier (for imports) prepared to provide us with a full commercial invoice before any goods are loaded for import or export into/from the UK?
Prior to Brexit, a commercial invoice wasn’t needed at the time of shipment. Post-Brexit it will be. You need to ensure that you (for export) or your supplier (for import) can provide such an invoice to KN in the UK (for exports) or KN at EU Origin (for imports) before any goods ship.
The invoice should contain the following information (in addition to normal commercial requirements) to enable a correct customs clearance:
- A plain language description of the goods, in addition to any technical description or product code.
- Full quantities and net/gross weights (on a separate packing list if applicable)
- The Country of Origin of the goods
- The Full Value and Currency of the goods
- The terms of shipment – for example the Incoterms® applicable.
- The HS Classification, or Commodity Code, of all the goods shipped (see 7)
Without such an invoice – or without the details being provided to us another way before shipment, goods may be delayed at the time of import or export; or you may have difficulties meeting TSP requirements later (for imports).
8. Do you know that your goods need to be classified for Customs – and do you know how to do it?
Post-Brexit, all goods imported or exported into/out of the UK and EU will need to be classified. This is known as the ‘Harmonised System (“HS”) classification of goods and is a code number that applies to any given imported or exported article. It defines the duty/tax rate that applies at import into either the UK (at import into the UK) or the EU (at export from UK).
We cannot classify goods for you – it is your legal responsibility to Customs to classify the goods correctly and pay the correct amount of duty & tax due at import. The only exception is detailed below.
This is a complex area and all guidance notes on these sites relevant to your goods should be read and understood.
The Kuehne + Nagel Customs & Trade Compliance Advisory Service may be able to provide guidance on classification and to help classify your goods. However please note that this is a chargeable service and is subject to a Letter of Engagement being signed, and separate Terms & Conditions from our Standard Trading Conditions. Please click here to contact the team.
9. Controlled goods at EXPORT
The UK imposes export controls on: military items, dual-use items (items with both civil and military uses), civilian firearms, and items usable for torture. These items are regulated through a system of export licensing.
Currently, the export of many controlled items within the EU does not require a licence. However, if the UK leaves the EU without a deal, licences would be required for export of these items from the UK to EU countries.
The government has issued specific guidance for such goods here
10. Paying for Customs Clearance charges, Duty, VAT and tax etc. – Incoterms®
For goods shipped on any Incoterm® except DDP, the Buyer (i.e. you in the UK at UK import; or your customer in the EU at UK export) is obliged to pay for import customs clearance and any import duties or taxes.
Under the DDP Incoterm®, the Seller (i.e. you at UK export or your supplier, for UK imports) is responsible for all charges but does not have to act as the ‘Importer of Record’. The Buyer will usually still have to supply their EORI number at import, to be shown on any customs declaration.
For exports, under the EXW Incoterm® the Seller is not responsible for the UK export declaration at UK export (nor is the EU seller for UK imports). As a UK seller at export, you will need to ensure agreement as to who will be responsible, and for acting as Export of Record, with the EU Buyer. As a UK Buyer (i.e. importing into the UK) you need to agree this with the EU seller. The FCA Incoterm® is almost always a better choice as this means that the Seller (UK or EU) is always responsible for export customs clearance.
Under all other Incoterms® the Seller (the exporter) is responsible for Export Clearance and charges and the Buyer (the importer) is responsible for Import Clearance and charges and paying for Import Duty & Tax.
11. Paying for Customs Clearance charges, Duty, VAT and tax etc. – Making payment
If you need to pay for Import or Export Customs Clearance where you have not had to in the past, then please make the necessary arrangements to do so, including setting up of credit accounts, with your UK Kuehne + Nagel contact.
Import duty will be assessed at the rate applicable to the classification of the goods based on the value of the goods, plus freight and insurance. This applies at import into the UK and at import into the EU (UK export).
In the UK at import, VAT at 20% may be charged in addition, based on the value of the goods plus freight and insurance, plus duty. Note that VAT Postponed Accounting has been mooted for introduction upon Brexit; which means that VAT only needs accounting for on your normal VAT return rather than being paid at the time of import. You may need to confirm to us in writing that you wish to use VAT Postponed Accounting; we await final clarification from HMRC
Import VAT in the EU may need to be paid at the time of import, or a similar postponed VAT accounting method may be available, depending upon the EU country of import.
Other taxes may be calculated in other ways.
If you are TSP authorized then you do not need to pay duty & tax at import into the UK, instead you must pay within one month of import – with a possible post-Brexit concession of 6 months from 31st October 2019 - to be confirmed.
Otherwise UK Customs require payment of import duty and VAT (if not postponed) prior to release of the goods. You have several options:
- You may already have an existing ‘Deferment Account’ by which you pay Import duties and taxes. Please provide us with your deferment number if so, and a letter authorising us to use it on your behalf. This letter can be combined with the Letter of Empowerment (see 5). Alternatively this can be by your completion of HMRC form C1207N.
- You may wish to apply for a new deferment account. More details on deferment can be found here
- Kuehne + Nagel have our own deferment account with HMRC. We can pay import duty & tax on your behalf. Please note though, that we make a charge for doing so - usually a small percentage of the total amount deferred; and that we require cleared funds to be paid to us prior to delivery.