Customs and excise procedures: preparations for a no-deal Brexit

By January 18, 2019Blog

Like it or not, the United Kingdom is more than likely leaving the European Union at 11:00pm on 29 March 2019.  At the time of writing, we don’t know whether an exit deal will be agreed, which will open upon a new book of rules and procedures regarding how we trade with the EU.  In the meantime, the government is issuing various guidance regarding how trading will take place in the event of no deal with the EU.  In this blog post, we will look at the potential implications of a no deal on customs and excise rules. We will look at the VAT implication for businesses in a separate blog post.

The current position

As things currently stand, businesses can move goods freely between EU member states. For customs, this means that businesses trading with the rest of EU do not have to make any customs import or export declarations, and their trade with the EU is not subject to import duty.

Certain goods are subject to excise duty. This is a tax charged on the importation and manufacture of alcohol, tobacco and oils. These goods are currently free to move between the UK and the rest of the EU with excise duty suspended.

What would happen to customs and excise procedures in a no-deal scenario?

If the UK leaves the EU without a deal there will be immediate changes to the procedures that apply to businesses trading with the EU. It will mean that the free circulation of goods between the UK and EU will cease.

For businesses trading with the EU, the impacts will include:

  • Businesses having to apply the same customs and excise rules to goods moving between the UK and the EU as currently apply in cases where goods move between the UK and a country outside of the EU. This means customs declarations will be needed when goods enter the UK (an import declaration), or when they leave the UK (an export declaration). Separate safety and security declarations might also need to be made by the carrier of the goods (this is usually the haulier, airline or shipping line, depending on the mode of transport used to import or export goods).
  • The EU applying customs and excise rules to goods it receives from the UK, in the same way it does for goods it receives from outside of the EU. This means that the EU will require customs declarations on goods coming from, or going to, the UK, as well as requiring safety and security declarations.
  • For movements of excise goods, the Excise Movement Control System (EMCS) will no longer be used to control suspended movements between the EU and the UK.

HMRC is currently in the process of contacting businesses that import and/or export with the EU, highlighting the need to undertake, at the very least, the following three actions:

  1. Register for a UK Economic Operator Registration and Identification (EORI) number at gov.uk/hmrc/get-eori. You will need an EORI number:
  • To continue to import or export goods with the EU after 29 March 2019, if the UK leaves the EU without a deal;
  • Before you can apply for authorisations that will make customs processes easier for you – HMRC will advise on applying for these imminently.
  1. Decide if you want to hire an agent to make import and/or export declarations for you or if you want to make these declarations yourself (by buying software that interacts with HMRC’s systems). If you want to:
  • Declare through an agent, contact one to find out what information they’ll need from you;
  • Use software to make declarations yourself, talk to a software provider to make sure that their product meets your needs, depending on whether you import, export or both.
  1. Contact the organisation that moves your goods (for example, a haulage firm) to find out if you will need to supply additional information to them so that they can make the safety and security declarations for your goods, or whether you will need to submit these declarations yourself.

In addition, HMRC have issued, and continue to update, various pieces of detailed guidance here which includes some useful notes on what to expect on ‘day one’ of a no-deal Brexit.

If you need further help and advice on the above, contact our team.