Brexit, tax and customs: all you need to know

Brexit officially occurred on 1^st January 2021, but it was only from the start of this year that the new customs formalities between the UK and the EU were established. All new customs controls will take legal effect on 1^st July this year.

In practical terms, this means a change from the intra-community flow of goods and services that existed before Brexit to a new regime of separate import and export checks.

The DEB (declaration of exchange of goods) has now been replaced by two separate declarations. UK businesses must also now apply for an Economic Operators Registration and Identification (EORI) number in order to transfer goods to the EU.

The new ‘smart border’ system, a series of technological solutions designed to make it easier for goods to flow between the EU and the UK, is now in operation. It relies heavily on anticipation and automation, with digital tools designed to speed up the flow of goods across the border.

The Goods Vehicle Movement Service (GVMS) is designed to complement this. It is an IT service which allows hauliers to file import and export declarations ahead of time, speeding up the processing of trucks.

Companies may be exempt from duties in they satisfy certain special conditions. Subject to agreements, certain goods may qualify for ‘preferential origin’ status making them exempt from customs duties. To qualify for this status, a product must be either fully obtained or significantly processed in the country concerned; full proof of this is required.

Certain other schemes also allow for the suspension of checks in specific cases. A special returned goods relief scheme removes customs duties on exported products that have to be returned to their country of origin. The goods must be in the same condition that they were at the time of export, and returned within three years.

Temporary admission is also allowed for goods being used for things like exhibitions, showrooms and private sales which are only entering the country for a short period of time.

The key word for companies to bear in mind in 2022 is anticipate. Delays in the processing of imported goods pose significant risks for the supply chain, and around 30% of trucks are still arriving at ports with insufficient documentation. The new regulations are coming into force on 1^st July, so it is vital for businesses to get ahead of the curve and make sure they are sufficiently adapted – by taking steps like applying for an EORI number – in order to keep goods flowing as smoothly as possible.