Who would have thought that amongst all of the craziness of the past year, a Brexit deal has been agreed. This means that the UK is no longer part of the EU’s single market and customs union, therefore if you and your business send items to the EU then new rules will apply.
In summary, you now need to complete and attach a customs declaration form (available from the Post Office or Royal Mail’s Click&Drop), provide electronic customs data and determine how VAT and duties will be paid for items.
Sounds easy right? Let’s break this down for you:
GB EORI number
Firstly, it is now mandatory to have a GB EORI number to export to all international destinations.
This number is unique to you and can be inserted in the VAT field on the customs declaration form.
Don’t have one? You can apply here: gov.uk/eori.
Customs Declaration Form
As mentioned above, this form must be completed and attached to your item.
It is solely your responsibility to ensure this form is completed correctly. Failure to do so may cause delay to the shipment of your items. This includes a description of the goods, their weight and value.
Electronic Customs Data
Another mandatory element to shipping. Please ensure you use an approved shipping solution to complete all fields on the customs declaration to avoid delays. Without this data, the international postal partner may be unable to deliver your item – no one wants that!
Alongside this, it is also mandatory to include the Harmonised System (HS) code. This code assists customs authorities to identify the item, regardless of language barriers.
Every little helps!
Yes, those three little letters we all love. Every sale of goods is now treated as an export. They can be zero rated for UK VAT purposes.
In some cases, the recipient may then have to pay customs or VAT charges and a handling fee in the receiving country before they can retrieve the parcel. This is all dependent on the country, the items itself and the nature of the goods.
What about customs charges?
Items sent from Great Britain to the EU are subject to VAT and duties in the EU as outlined below:
Until 1 July 2021, commercial goods sent to the EU with a value between €10 and €150 may be subject to import VAT and may incur a handling fee in the receiving country.
Commercial goods sent to the EU over €150 may attract VAT, customs duties and a handling fee.
Excise duty: is chargeable in addition to customs charges for certain products.
So how do you pay taxes and duties?
There are two ways to make payment:
Delivered Duties Unpaid (DDU)
The international postal partners will collect the import VAT (and customs duty) from your EU customer prior to delivery, alongside a handling fee.
Delivered Duties Paid (DDP)
This method calculates VAT and customs duty in advance from your customer at the checkout.
As with anything linked to Brexit, it can seem a daunting task to tackle the new rules and compliance. If you would like help navigating through the changes then do not hesitate to get in touch.