News article

Brexit: Customs intermediaries and traders – how to prepare for a no-deal scenario

3 October 2019


Adapt your business to comply with new systems, processes and controls

The trade that’s carried out with the EU will broadly follow the customs controls that apply for the rest of the world, and there’s likely to be an increase in demand for customs agents’ services from traders who had only worked within the EU before, or traded both within the EU and with the rest of the world. So you’ll need to adapt your business to comply with these new systems, processes and controls.

How customs processes will change

You can expect to see an increase in demand for customs services from the traders who have only traded within the EU to date.

If you’re established in the EU and are making import declarations on behalf of UK clients, you’ll need to have a European Economic Operator Registration and Identification (EORI) number as well as a UK EORI number - HMRC wants to ensure that traders have access to the right authorisations ahead of the UK leaving the EU to ensure trade can keep flowing.

HMRC have published further information specifically for importers, exporters, carriers, and port operators who trade with the EU through roll-on roll-off locations. It includes new and temporary easements to support continued trade fluidity at these locations.

When using roll-on roll-off (RoRo) transport, for example ships designated to carry wheeled cargo such as lorries, you’ll need to have information from traders about goods, in order to pre-notify HMRC of consignments.

You’ll also need to know transport information from the haulier – such as the registration details of the vehicle that goods are travelling in – and communicate with them if they need to go to a specific inland location, such as a Designated Export Place for certain exports.

Dealing with import VAT

In a no-deal Brexit, the government will introduce postponed accounting for import VAT on goods brought into the UK.

This means that UK VAT registered businesses importing goods to the UK can account for import VAT on their VAT return, rather than paying import VAT when the goods arrive at the UK border. This will apply to imports from the EU and non-EU countries.

To reach this decision, the government took into account the views of businesses and sought to mitigate any adverse cash-flow impacts and ensure that VAT processes are kept as close as possible to what they are now. To ensure equity of treatment, in a no-deal Brexit, businesses will be able to account for their import VAT from non-EU countries in the same way, which will help to make the most of trading opportunities around the world.

Changes to VAT IT systems

EU VAT registration number validation
This service allows businesses to check whether a customer or supplier’s VAT number is valid. You will still be able to use this service to check the validity of EU business VAT registration numbers. UK VAT registration numbers will no longer be part of this service.

In the event of a no-deal Brexit, HMRC is developing a system that can continue to validate UK VAT numbers.

Funding scheme for customs intermediaries and traders

In September 2018 HM Treasury and HMRC announced an investment of £8 million to support broker training and increased automation.

Applications have reopened for businesses to get funding to help their business complete customs declarations, in preparation for the UK leaving the EU.

You can apply to get funding for:

  • training that helps your employees to complete customs declarations and processes
  • IT improvements to help your business complete customs declarations more efficiently
  • recruitment of new staff to help your business complete customs declarations

Applications will close on 31 January 2020, or earlier once all the funding is allocated.

Find out if you can apply for the funding.

Actions you can take now

  1. Assess the impact of any increased demand for customs declarations on your business, and whether you need to recruit and train additional staff.
  2. Consider any changes you may need to make if you have to follow the same or similar processes for EU trade as you do with the rest of the world.
  3. Inform businesses if they need to register for a UK Economic Operator Registration and Identification (EORI) number in addition to an EU EORI number, or register for the UK EORI number of their behalf. Read more about the information you will need to apply for an EORI number.
  4. Stay up-to-date with these changes by registering for email alerts. Follow the link, add your email address, select ‘Submit’, select ‘Add subscription’ and choose ‘EU Exit’ then select ‘Submit’.
  5. The passport rules for travel to most countries in Europe will change if the UK leaves the EU on 29 March 2019 without a deal. Read more about travelling to the EU with a UK passport if there’s no Brexit deal and, if relevant, ensure your employees and customers are aware of the potential changes.
  6. Consider checking with your customers that they are aware of the potential changes and how these could impact their business, and suggest they also register for email alerts.