Business after Brexit: understanding customs

The Department for International Trade has released a series of new regulations outlining how trade must be conducted between the UK and the EU from 1st January 2021. Of course, these new rules are complex and pose their own challenges for UK retailers. That’s why in the coming weeks we will be outlining some of the key rules and regulations to help you understand exactly what Brexit will mean for your business.

As a major part of the import/ export process, we couldn’t produce a Brexit series without spending some time on the customs implications. From 1st January 2021, all retailers will need to make a customs declaration on any goods imported from EU countries or exported from the UK to EU countries.

Hiring someone to look after customs for your business

Many businesses will hire a customs professional to deal with customs declarations for them. From 1st January 2021, this person, or business, will need to be based in the UK. The following entities may be able to help you with your customs declarations:

• Freight forwarders who move goods around the world for importers. A freight forwarder will arrange clearing your goods through customs and will have the software to communicate with HMRC. You will be able to find out more about freight forwarders and what they do, as well as accredited companies on the British International Freight Association website.

• A customs agent or broker. You can view a list of these here.
• A fast parcel operator (like a courier or next-day shipping service) can also sometimes help with customs. You can view a list of these here.

You are responsible for keeping records, the accuracy of all information on customs declarations, and any VAT or import tax due. It is worth noting that if your customs agent makes a deliberate or unreasonable error, they can become jointly and severally liable if you have issued clear instructions. You will need to agree with your customs agent if you need to have a duty deferment account to make payments or if they’ll use their own.

Making your own customs declarations: importing

Making your own declarations can be complex, and also requires you to have software that is compatible with HMRC systems.

The first step to making your own declarations is to apply for access to the Customs Handling of Import and Export Freight (CHIEF) system. To do this, you will need to fill in a C1800 form which can be found here. You will also need to ensure your business is set up with the correct software to be compatible with the CHIEF system. You can find a list of customs software providers here.

Upon arrival into the UK, you must present your goods to customs. This means that you need to inform customs that they have arrived and are available for inspection. You will do this either electronically via a trade inventory system linked to customs or by lodging a C1600A form at the designated customs office. For every shipment, you will need to provide a full customs declaration within 90 days of your goods being presented to customs.

You will use the CHIEF system to make your full declaration. This will need to include:

• Customs procedure code which indicates the type of product, where it has been released from (e.g. temporary storage) and where it is going next (e.g. your UK warehouse).
• Commodity code which indicates the type of product as well as how much VAT and duty is due.
• Your declaration unique consignment reference (DUCR) which is the main reference number that links declarations in CHIEF
• The departure point and final destination of your shipment
• The consignee and consignor (or recipient and seller)
• The type, amount and packaging of your goods
• The transport methods used and costs
• Currencies and valuation methods
• Any certificates and licences that are applicable to your products,

Once your declaration is accepted, you will receive a message via CHIEF which tells you what VAT and duty you owe. This will need to be paid before your goods are released to you. You can amend your import declaration before it’s been cleared by customs and for up to 3 years after your declaration.

Making your own customs declarations: exporting

From 1st January, if your business is exporting goods to the EU you’ll need to submit a customs declaration for this as well.

As for imports, most declarations are submitted electronically, using the National Export System (NES). If you are not using a customs agent, you will need to register for this software which you can do here. You will need your EORI number and CHIEF badge role to do this. You might also need to buy third party software that can submit declarations.

For most goods you’ll make a full declaration before the goods arrive at the port of export. If you do not your goods could get stopped at the border.

Your declaration will need to include the same information listed above for importing.

You are able to amend your export declaration before it’s been cleared by customs and then up to 3 years after it’s cleared. You will need to inform HMRC of any amends.

In order to provide our retailers and exhibitors with the most up to date information surrounding Brexit and trade we will be publishing a series of bitesize guides surrounding the points above. Please keep up to date with the Spring Fair blog for all the latest updates.

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Discover more Brexit guidance here: 

• Business after Brexit: auditing your supply chain
• Business after Brexit: applying for an EORI number
• Business after Brexit: 5 things you need to know about new import rules
• Business after Brexit: understanding tax and tariffs
• Business after Brexit: exporting to the EU