Navigating Customs - Imports and Exports
Internet sales as a percentage of total retail sales in the UK, (as recorded by the Office for National Statistics), has grown steadily from under 5% in 2006, to around 20% in 2020 (prior to the Covid Pandemic), peaking during this period to approaching 40%, before a fluctuation at the start of 2021 (combined Brexit and Covid effect), then settling down to around 25% in 2023. The trend remains upwards, so internet sales are becoming increasingly important.
UK Businesses Importing Goods For UK-based businesses, wishing to import goods from the EU post-Brexit, the rules have become aligned with the rest of the world, with new options available to facilitate imports such as:
New EU VAT rules In July 2021, the EU changed the VAT rules for cross-border VAT e-commerce – everyone in the e-commerce chain is affected both inside and outside the EU, postal operators and couriers, customs and tax administrations, through to consumers. To facilitate trade the EU introduced the One Stop Shop and the Import One Stop Shop for consignments valued at 150 EUR or less. Selling from a third country into the UK Brexit rules which came into effect on 1 January 2021, had an impact on sellers based outside the UK, (EU and the wider world), selling small consignments with a value of £135 or less to customers into the UK, by requiring them to register for VAT in the UK, unless they sold small consignments into the UK using an online marketplace.
Planning an e-commerce strategy Now that the UK is no longer part of the EU it is important to seek appropriate advice in setting up an e-commerce strategy for importing goods into the UK and selling outside of the UK. First Steps for UK Businesses Importing and Exporting Anyone involved in the importing and exporting of goods, whether they are self-employed, (selling goods on a social media platform), a business (large or small) or an agent acting on behalf of a business, will need to understand what is required to import goods into the UK or export goods from the UK – the specific rules may be different according to the circumstances, but the same steps will each need to be considered. Basic Requirements – consider what is required to import or export the specific goods to the county of destination:
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Postponed VAT Accounting (PVA)
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Deferment Accounts
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Customs Declaration Service (CDS) – replacing the former CHIEF system
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The creation of Freeports around the UK
Once imported, (VAT and Duty paid) goods can then be distributed into free circulation to customers in the normal way. VAT is charged to UK customers as applicable, and the import VAT is reclaimed as input VAT. UK Businesses Exporting Goods As part of Brexit planning, exporting for businesses has been made relatively straightforward (with no UK VAT or Duty due on exports from the UK perspective). However, now the UK is outside of the EU and with the EU becoming like the rest of the world the important consideration will be the import rules in the country of receipt.
Importantly, no import duty is payable on consignments of £135 or less.
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Ensure that each good that is being imported or exported is allocated a
There is some anecdotal evidence that some EU businesses have ceased to sell goods online into the UK post Brexit, which does give the opportunity to UK-based businesses to import goods in bulk for distribution and sale within the UK.
commodity code. The code describes the product and governs the duty and VAT payable at the port. This ensures a smooth transition through customs, without this your goods may be seized.
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