Simplified customs processes for UK businesses trading with the EU in the event that the UK leaves the EU without a deal.
In the event that the UK leaves the EU without a deal, on 12 April 2019, many UK businesses will need to apply the same processes to EU trade that apply when trading with the rest of the world.
If you trade goods with the rest of the world as well as the EU, we’ve published guidance to tell you what you need to do if you’re an existing authorisation holder.
When you import goods into the UK they must be declared electronically (by submitting a customs declaration). HMRC has to clear your goods, and you must pay any duty and tax upfront.
There are a number of existing customs procedures and simplifications currently used when trading with the rest of the world. You can use these to make the processes easier and give you a cash flow advantage.
When we refer to import VAT in this guidance, it’s for importers who are not registered for VAT.
If you’re registered for VAT then you can account for import VAT on your next VAT Return instead.
HMRC wants to ensure that as many traders as possible can use the right simplifications ahead of leaving the EU to ensure trade can keep flowing. We’ll update this guidance when further details are available.
Moving goods across the Ireland land border
This guidance does not apply to moving goods between Ireland and Northern Ireland. Sign up for EU Exit email alerts to find out when new guidance about this is published.
Importing without an agent
If you do not use a customs agent to import, you might want to use:
- new transitional simplified procedures
- customs freight simplified procedures
Transitional simplified procedures
Transitional simplified procedures are simple measures HMRC is putting in place to make importing as easy as possible for you for you until at least July 2020. If you register for transitional simplified procedures, you’ll be able to transport your goods into the UK without having to make a full customs declaration in advance. You’ll also be able to postpone paying your duties and VAT.
You will also need a duty deferment account.
Customs freight simplified procedures
Customs freight simplified procedures is another way to access simplified processes, but HMRC must authorise you to use these. If you’ve not already applied for this you may not get authorisation before the UK leaves the EU. Most businesses will find that the registration for transitional simplified procedures is their best option for preparing to trade if the UK leaves the EU without a deal.
You will also need a duty deferment account.
Importing with an agent
If you use a customs agent to import, you might want to use customs freight simplified procedures.
Customs freight simplified procedures
If you’re not authorised to use the customs freight simplified procedures but still want to benefit from it, you could ask a customs intermediary (who may have HMRC authorisation) to use the procedure on your behalf. You’ll need to hold a duty deferment account and you’ll still be liable for any customs duty, excise duty or VAT due.
Goods that will be modified or are a part for something else
If the goods will be modified or a part for something else, you might want to use:
- inward processing relief
- outward processing relief
Inward processing relief
Inward processing relief allows you to suspend customs duty and import VAT on goods that you import while they’re being repaired or processed. For example, if you import sheet metal into the UK to turn into a car chassis and then export it to Germany. You can then export the goods or enter them into another customs procedure without paying duty or VAT. You’ll pay customs duties and VAT when the goods are in free circulation. The duties you’ll pay can be based on the value of the goods at import, or the value of the final product after processing.
In most cases, you’ll not need a guarantee to be authorised to use inward processing relief.
Outward processing relief
Outward processing relief allows you to temporarily export goods from the UK for processing or repair and then claim full or partial duty relief from UK customs duty when you re-import them. For example, if you export buttons from the UK to be sewn on to shirts in Italy, then import the shirts back into the UK for sale.
In most cases, you’ll not need a guarantee to be authorised to use outward processing relief.
Goods that are in the UK temporarily and are not modified
If the goods are only in the UK temporarily and will not be modified, you might want to use:
- temporary admission
- ATA carnets
Temporary admission is a customs procedure that allows you to import non-UK goods temporarily in to the UK:
- under certain conditions
- for a specified period of time
- with either total or partial relief from customs charges
Temporary admission is useful if you temporarily import goods such as:
- samples of your goods - for example, carpet samples
- professional equipment - for example, instruments for a touring orchestra
- items for auction - for example, vintage wines for auction
- items for exhibition - for example, artworks on loans to galleries
- items for demonstration
You cannot alter these goods while they’re in the UK. Using temporary admission should mean any import duty or import VAT is suspended as long as you later remove the goods from the UK.
In most cases, you will not need a guarantee to be authorised to use temporary admission.
The ATA Carnet is an international customs document that allows you to temporarily import commercial samples, professional equipment or goods going to a trade fair or exhibition.
If you have an ATA Carnet you can use a single document to clear goods through customs in countries that are part of the ATA Carnet system.
If you do not have an ATA Carnet you must go through each country’s customs procedures for the temporary admission of goods.
You must apply to the London Chamber of Commerce and Industry to get an ATA Carnet.
Moving goods within the UK and across partner countries
If you move goods across multiple borders, you might want to use:
- consignor status
- consignee status
The Common Transit Convention (CTC) allows you to move goods across certain borders without paying import duties, until the goods arrive at their final destination.
It gives you cash flow benefits and can help you get your goods across the border more quickly at points of entry into the UK and when exporting to CTC countries (EU member states, Iceland, Norway, Liechtenstein and Switzerland, Turkey, North Macedonia and Serbia).
Moving your goods under CTC may help if you move goods from Ireland to other EU member states (or the other way around) through the UK.
After the UK leaves the EU, the UK will stay in the CTC. There’ll be little change to the current process for using CTC after the UK leaves the EU.
To use CTC, you must make a transit declaration using the New Computerised Transit System (a system that records and tracks the movement of goods under CTC).
You can do this yourself, or you may choose to use a customs intermediary, like a freight forwarder or agent. You must also have a guarantee.
Movements of goods under CTC must:
- start from an ‘office of departure’, either government, your own or an agent’s premises if you or they are an authorised consignor
- pass through an ‘office of transit’ to record the entry into the new country when the goods cross into a new customs territory, that is, the first entry in to the UK from a CTC country - you must present goods with their accompanying documentation
- move on to the final destination, to an ‘office of destination’, either government, your own or an agent’s premises, if you or they are an authorised consignee - you must then enter the goods into another customs procedure, or into free circulation
Under CTC, simplified transit procedures can help if you regularly use transit procedures to move goods between CTC countries. There are 2 main simplifications.
Authorised consignor status
This enables you to start transit movements at your premises, rather than a government office. To apply for this you need to have a customs comprehensive guarantee that’s been authorised by HMRC to cover customs duties that are suspended during the transit of goods.
If you do not already hold a customs comprehensive guarantee, you can apply for authorised consignor status once HMRC has received your guarantee application.
Authorised consignee status
This enables you to receive transited goods at your premises, rather than a government office. To apply for this you need to have an approved temporary storage facility where transited goods can be stored before they enter another customs procedure or they’re released for free circulation.
If you want to be authorised by HMRC to use simplified transit procedures, we’ll check that you:
- have not committed any serious or repeated infringement in respect of your customs and tax obligations
- demonstrate a high level of control of your operations and the flow of goods
- have a proven ability or professional qualifications to operate transit procedures
Importing goods that meet defined criteria
If you import goods that meet defined criteria, you might want to use authorised use.
Authorised use (or end use) is a customs procedure where goods arriving in the UK may be allowed a reduced or zero rate of duty, as long as they’re put to certain uses specified by HMRC. Goods include:
- shipwork goods
- aircraft and parts
- hydrocarbon oil
- marine propulsion engines
- military equipment
- casein (used in the cheese industry)
This helps UK traders to be more competitive in certain trade sectors. To be eligible for authorised use relief, your products must meet defined criteria and be identified in the Trade Tariff. Find out how to use the Trade Tariff for end-use.
In most cases, you’ll not need a guarantee to obtain authorised use relief.
Running a storage facility
If you run a storage facility, you might want to apply for authorisation to operate either a:
- customs warehouse
- temporary storage facility
Operating a customs warehouse allows you to store goods for traders on which customs duty and import VAT payments are suspended whilst the goods are stored in your HMRC approved warehouse.
Once the goods leave your warehouse, the importer must pay the duty unless the goods are exported or moved to another customs procedure.
In most cases, you will not need a guarantee to be authorised to operate a customs warehouse.
You must apply to HMRC for authorisation.
Temporary storage facility
A temporary storage facility is a place close to or in a seaport or airport, where goods are stored under customs supervision before being:
- placed under a customs procedure
- released to free circulation by duty being paid
- exported outside of the UK
Traders authorised to receive goods moved under Common Transit Convention at their premises (known as authorised consignees) must have a temporary storage facility.
In most cases, you will not need a guarantee to be authorised to operate a temporary storage facility.
You must apply to Border Force to operate a temporary storage facility.
A duty deferment account allows you to pay your customs duties, import VAT and excise duties monthly by direct debit, rather than having to pay immediately each time you clear your goods through customs.
You must have a duty deferment account to import goods using either transitional simplified procedures or customs freight simplified procedures if you have customs duties, excise duties or import VAT to pay. You do not need a deferment account for your import VAT if you’re using postponed VAT accounting.
If you have duties or taxes to pay, HMRC will take your direct debit in the same month that you submit your supplementary declaration.
HMRC will take your payment of customs duties and import VAT on the 15th day of the month (or the next working day if the 15th is on a weekend).
Any excise duties will be taken on the 29th of the month (or the previous working day if the 29th is on a weekend).
Check what the tariffs will be, to see whether you’ll need to pay customs duties on your goods.
Apply to HMRC to defer any duties, import VAT or excise duties payable.
From 30 September 2019 you must have secured a financial guarantee from an approved financial institution to cover the amount of duty you defer. Guarantees can take several weeks to set up, so you should contact your bank or insurer about this as soon as possible.
Guarantees for moving goods or deferring duty
You will need a guarantee to move goods under the CTC procedure and to become an authorised consignor. It’s an agreement to cover a customs debt or import VAT that’s arisen (or will arise) when duty is suspended. It’s needed because you’re not paying your customs duty straight away.
You can use:
A comprehensive guarantee allows you to cover multiple debts under one guarantee. Traders must meet specific competence and compliance criteria to use a comprehensive guarantee.
You can get the guarantee in a number of different ways, for example:
- a guarantor undertaking from a bank or financial institution
- a cash deposit
Guarantees can take several weeks to set up, so you should contact your bank or insurer about this as soon as possible.
Other customs simplifications, special procedures and temporary storage
You’ll need to give a guarantee to defer duty, but do not need to be authorised by HMRC to give one.
For at least 12 months after the UK leaves the EU, you will not usually need to give a guarantee to be authorised for the following:
- customs warehousing
- temporary admission
- inward processing
- outward processing
- authorised use
- temporary storage
This will mean that you can get your authorisation quickly. In some cases, HMRC will ask you to give a guarantee when you apply, for example where your previous compliance history or the background of your employees shows that there’s a risk that you might not pay duties due.
Authorised economic operator status
Authorised economic operator status is recognised internationally as a quality mark. It shows that your role in the international supply chain is secure and your customs controls and procedures are efficient. Depending on the type of authorised economic operator authorisation you apply for and are granted, benefits can include easier access to certain customs simplifications and deferment guarantee reductions or waivers.
To apply for UK authorised economic operator status you must meet a range of criteria such as an appropriate record of compliance with customs legislation. HMRC does rigorous checks on the information you give and this is verified through a site visit.
If you’ve not applied yet, you may not get the status approved before we leave the EU. Only businesses that are heavily involved in importing and exporting are likely to benefit. Most businesses will find that the straightforward registration for transitional simplified procedures is their best option for preparing for no deal.
You can stay up-to-date, by registering for HMRC’s EU Exit update service.