The next step

Apply for grants if your business completes customs declarations

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Are you ready for customs?

New customs procedures

Whether or not the UK and the EU finally manage to agree a free trade agreement, there will be new customs procedures and processes that come into force on 1 January 2021. The UK’s protracted trade talks with the EU will have absolutely no impact on the urgent need for you to review your company’s importing and exporting procedures. What do you need to do?

Make customs declarations

You’ll need to make customs declarations when you import goods from the EU. You can make these declarations yourself, but they are complicated so most businesses that currently trade outside the EU use an intermediary such as a courier, freight forwarder or customs agent to help them meet the requirements.

Tip. From 1 January 2021 if you hire someone to deal with customs for you, they need to be established in the UK.

Tip. If you decide to make the declarations yourself, you’ll need to gain access to HMRC’s systems and purchase software. HMRC has made available funding to help businesses complete customs declarations, and grants are available to businesses established in the UK to cover new roles and help train employees to deal with customs procedures (see The next step ). The recruitment grant gives you £3,000 towards recruitment costs for each new employee and up to £12,000 to cover the salary costs. The training grant is up to £1,500 per employee for external training and £250 per employee for internal training.

Tip. If you have a good HMRC compliance record, you should be able to defer import declarations on most non-controlled goods for up to six months after 1 January 2021, i.e. until 1 July 2021.

Tip. You don’t need to complete a customs declaration for any products you ship by 31 December 2020 even if they are received after 1 January 2021.

Make sure you have a GB EORI number

From 1 January 2021, you’ll need an Economic Operator Registration and Identification (EORI) number which starts with GB to move goods between the UK and the EU.

Tip. To apply, go to www.gov.uk/eori . The application process takes ten minutes, but it can take up to a week to get the number.

Tip. In 2019 HMRC auto-enrolled VAT-registered businesses with EU trade which did not have an EORI number, so you should check whether you already have one before applying as you won’t be given a new one.

Prepare to account for VAT on imports

If your business is registered for VAT in the UK, you’ll be able to declare and recover import VAT on the same VAT return, rather than having to pay it upfront and recover it later.

Tip. Ensure your accounting software is updated so that it will include the VAT due on imports through postponed VAT accounting in Box 1 of your return and reclaim it in Box 4. The net value of all imports should be included in Box 7.

For a link to the grant applications, visit http://www.tips-and-advice.co.uk , Download Zone, year 13, issue 02.