How to Export Goods to Europe after Brexit – The 7 Key StepsMay 31, 2021
Almost 6 months after the UK officially left the European Union and the EU’s rulebook stopped applying to the UK, many areas of life have changed. The effects have been felt by both people and businesses – although in many respects this has been overshadowed by the overwhelming impact of the pandemic. British exports to the EU have been hardest hit by new border formalities, including the introduction of customs declarations, additional checks on certain produce, as well as ensuring goods comply with the ‘rules of origin’. For many, its impact has been dramatic with exports reported to have plunged by over 40% and imports by 30% in the immediate wake of the UK’s departure from the single market. In a survey carried out by the Federation of Small Businesses in late March, it also indicated the huge impact Brexit had on the small business community with nearly a quarter of small firms surveyed saying they had temporarily halted sales with the EU because of post-Brexit rules.
Today, although some sectors report improvements since the early chaos in January, many businesses say the problems run deeper than the “teething troubles” the UK government highlighted at the time. Much of this is triggered by confusion concerning the obligations and requirements now expected of businesses supplying or receiving goods from the EU. In this guide, we will breakdown the seven key steps you will need to follow when exporting goods to the EU.
Step 1: Check Duties and Customs Procedures
First step is to have a clear understanding of the duties, rules and restrictions for your goods in the destination country. To find out this information and what exporting documents you will need, you can head to this page on the government website. Before you start, you will need to know what your product is made of to get the correct information about how to export it. For example, if you’re exporting chocolate, you will need to know if it contains any added cereal, fruit or nuts.
At this stage, you will also need to apply for any licences that you may need in order to be able to export your goods. There are special rules for certain products which require specific certificates. Look here for a list of these goods.
Step 2: Get Ready to Export
There are several important stages and things to consider when getting your business ready to export.
1. You must obtain an EORI Number
One of the most important pieces of information you will need when exporting goods to the EU is to obtain an identification number known as EORI – Economic Operators Registration and Identification. The EORI number code has 12 digits starting with the letters ‘GB’ if you are exporting from England, Wales or Scotland and ‘XI’ if you are moving goods to or from Northern Ireland. Failure to produce this could subject your goods to serious detention and potential delay in the export process. Applying for an EORI number only takes a few minutes on the UK government website which you can access here - Get an EORI number - GOV.UK
2. You must check if you need to register for VAT
Exports to EU countries are now treated like those to non-EU countries and are zero-rated for UK VAT. This applies regardless of whether you’re exporting goods to a consumer (B2C), or to a business (B2B). This doesn’t mean you can simply forget about VAT. It means you apply a 0% VAT rate. No VAT is payable but you still have to include the exports as part of your VAT accounting records.
3. You must Check who is receiving the goods
The business or person receiving the goods may need to make an ‘import declaration’ in their country or obtain suitable licences or certificates to receive the goods from the UK. You must check that whoever you are sending the goods to is eligible to import them correctly into their country.
Step 3: Decide Who will Make Export Declarations
UK businesses have several options for managing customs processing including:
Fast parcel operators
Freight forwarders can help you move goods anywhere around the world or liaise on your behalf with customs clearance authorities. Fast parcel operators, on the other hand, are responsible for moving parcels and documents, while customs brokers will manage the necessary customs documentation and registration, plus be up-to-date with customs rules and compliance.
If you choose the self-filing option you will be handling the export processes yourself. For smaller businesses this approach could prove complicated and time consuming although could be a cost effective solution if you are up for the challenge.
If you do decide to self-file, along with applying for an EORI number (as above), you will need to apply and register on the National Export System (NES) which enables export declarations to be submitted electronically. You will also need to register with the Customs Handling of Import and Export Freight (CHIEF). This is the UK government’s current electronic system that handles customs declaration processes. Do be aware however, that CHIEF will be replaced by the government’s Custom Declaration Service (CDS) in the future.
Step 4: Classify your Goods
The next step is to ensure you have the right commodity code to classify the goods you are exporting. If you have hired someone to deal with customs and transport for you, they should be able to help you with this. If you are self-filing, you can head to the government site here for more advice.
Step 5: Prepare the Invoice
It is essential that a completed invoice, along with any licences or certificates, travel with the goods. When filling in the invoice you need to determine the value of your goods. To do this, you can either use the price you are selling the goods for or if you are not selling the goods, you can use the predicted market value of the goods. You may also need proof of origin if you are exporting to a country where your goods have a reduced or zero rate of duty. The rules of origin state that a product must be either wholly obtained from the UK or the EU, or be substantially transformed in such a way that value is added.
Step 6: Get your goods through Customs
If you’ve appointed someone to deal with UK customs for you, they will make the declaration and get your goods through the UK border. You will need to check the specific import rules of the country you are exporting your goods to as you may need other documentation. The best way to deal with this is to ask the person or business buying your goods what specific information they need you to provide.
Step 7: Keep Invoices and Records
It is essential you keep and preserve all records and accounts, and are able to present these upon request to HMRC. If you are VAT registered, be sure to record the goods in your VAT accounts even if they are zero-rated.
Now you’re ready to go!
We hope this guide to exporting goods to Europe has been useful. If you’re still feeling confused, please don’t worry – you’re definitely in good company! This has been a big transition for everyone – from the smallest business to the largest corporate giant and we are all still finding our way. Alongside this guide, you’ll find plenty of information on the UK government website including a raft of videos and webinars to help.
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