Choosing the right VAT scheme is an important step for small business owners and can have a considerable...
Brexit is going to pose challenges for anyone who deals with members of the EU. Read more to find out if your export business is ready.
A lot of our clients have asked us how Brexit is going to affect their export business, and what they can do to prepare for it. So we’ve put together this handy guide. Remember, this is only for exporting goods to the EU. If your business also exports to Northern Ireland, or if you import goods from the EU, you’ll need to check out our other articles.
Step 1 – EORI Numbers
An EORI number, or Economic Operator Registration and Identification number, is required by all firms who move goods in or out of the EU. If you don’t have one, you may end up having to pay extra fees, and you may end up with delays or storage charges from HMRC.
EORI numbers are 12 digits long, and if you’re registered for VAT it will include your VAT registration number.
If you’ve already got an EORI number that starts with GB, you’re good to go: you can keep using it. If not, you’ll need to get one from the UK Government website. The process only takes 5 or 10 minutes, but you do need to make sure you have a few details before you start. Find out more.
You also need to make sure your importer has an EORI number. If you’re not sure, check with the customs authority from their country.
Step 2 – The Export Process
When it comes to export compliance, you first need to decide who is going to handle the process for you. You can do it yourself, or you can hire someone else to do it on your behalf.
If you do it yourself, you’ll need to carefully follow the instructions from HMRC. The process involves a customs declaration and can be quite complicated. If you decide to go down this route, make sure you check the requirements.
If you’d rather have someone else do it for you, you can hire a customs broker or a specialist freight handler. There are specific rules as to who is allowed to act on your behalf, so make sure you read the list of customs agents before you sign a contract.
Then you need to see if you can use the Common Transit Convention (CTC) for your goods. This offers a streamlined process which removes some of the administrative burden, and can cut down on some of the export fees, but there are some restrictions. The CTC guidelines lay this out very clearly, so check if you apply.
Step 3 – Taxes, Duty, Licenses & Certificates
Different types of goods will incur different fees for the importer. They will also affect the various licenses and certificates that you need to get, especially for things like:
- Alcohol & tobacco
- Certain types of oils
- Controlled goods like firearms
- Foods, plant seeds & manufactured goods
- Live animals & animal products
- Chemicals, drugs & waste
Most of these products require extra attention, so make sure to check the specific compliance documents for your industry.
Step 4 – VAT
If the UK leaves the EU with no deal, you won’t be able to use HMRC’s VAT online services to claim a VAT refund from an EU member state. You’ll have to use the individual process for the country you’re exporting to.
This also applies for unclaimed expenses you had before Brexit.
The European Commission has a good summary of EU country specific information on VAT which you should check out.
If you sell digital services to EU customers, you won’t be able to use the old system for VAT; you’ll have to register for VAT (or VAT MOSS) in the individual member state. The European Commission page has the information you need.
Step 5 – Transporting The Goods
If you decide to transport the goods to or through Europe yourself, you need to make sure you comply with the rules.
There’s quite a heavy burden in terms of what you or your driver needs to carry:
- Operator licenses
- Vehicle permits
- Valid passports
- Driver’s licences
- Mixed load or restricted load permits
- Export documents
- Insurance documents
Further Help & Advice
Fortunately, there are lots of places you can go for help and advice on preparing your export business for Brexit.
- The UK Government has a dedicated Brexit phone number – 0300 3301 331 (Monday to Friday)
- Your local Growth HUB has free support, advice and sources of finance
- The Business Support Helpline for England has a live chat
- A good accountant will be able to offer you compliance and business advice
So if you’d like to discuss how we can help you prepare for Brexit, please get in touch.