What the new EU-UK import rules mean for small businesses

The UKs largest trading partner in the world is the 27-nation European Union bloc, unsurprisingly, given that all of the UK’s nearest geographical neighbours are EU members. Indeed, UK imports from the EU were worth a huge £301 billion in 2020 alone, representing 50% of all UK imports in that year.

So when, in January 2022, the rules around importing goods from EU nations to the UK changed, it had a major impact on the way that businesses around the country conducted their trade. If your business already regularly imports and exports goods from overseas, then it’s likely that you already have a good understanding of the rules, but for many small businesses that don’t regularly go through this complex process, the changes in regulations can be a minefield of bureaucracy.

With even more rule changes coming into effect in July 2022, we explore everything you need to know about the changes in UK-EU import regulations.

Why are the import rules changing?

Brexit

Brexit has been a long process that began in 2016 with a UK-wide referendum on membership of the EU, resulting in a 52%-48% victory for the ‘Leave’ campaign. Over the following three years, progress was slow as both the UK government and the EU struggled to negotiate a withdrawal agreement that satisfied both parties and guaranteed that post-Brexit trade and industry would not suffer. The final withdrawal agreement was signed in January 2020 and on the 31st of that month, the UK left the EU after 47 years of membership.

The transition period

A transition period followed in which trade rules remained largely unaffected to allow businesses to adapt. Even after the transition period ended in December 2020, some temporary measures continued to remain in place to allow businesses that traded with Europe the chance to adapt to the regulations.

One such temporary rule that remained in place until 1st January 2022, governed how goods entering the UK from the EU should be declared to customs.

What are the new import rules?

Customs declaration

Prior to January 1st 2022, goods imported to the UK from the EU enjoyed a 175-day delay period in which a customs declaration could be filed with HMRC. That delay period has now ceased and a full customs declaration must be made before the goods can enter the UK.

Read more about the process of submitting a customs declaration.

Classification of goods

In order to complete your customs declaration and import goods into the UK from the EU, you will need to find the right Commodity Codes for the items you are importing. These codes are 10 digits long and identify the type of goods being imported so that the correct customs tariffs can be applied and you’ll end up paying the right amount of Customs Duty and Import tax.

You can use the UK government’s Trade Tariff Tool to find the correct commodity codes, duty and VAT rates for the items you wish to import.

Origin of goods

You will be required to state the origin of any goods that you import into the UK on your customs declaration form. Importantly, the place of origin is considered to be where the goods were originally grown, produced or manufactured, and not where the items were bought or shipped from.

Zero tariff

Because the UK and EU have signed up to a post-Brexit trade treaty, known as the Trade and Cooperation Agreement, certain goods that were made or ‘originated’ inside the EU qualify for zero tariffs or a reduced rate of customs duty.

To qualify, the imported goods must either have been grown, produced or manufactured within the EU. Alternatively, if the constituent parts were produced outside the EU, then the product needs to meet a “qualifying level of processing” within the EU to access zero tariffs. In short, if the items you wish to import were either entirely made in the EU, or were significantly constructed there, you may be entitled to import them for zero tariffs.

You can check if the type of goods you wish to import meet the general provisions of the UK-EU Preferential Rules of Origin.

Safety and security declarations

From 1st July 2022, all imports to the UK from the EU will require a safety and security declaration alongside your customs declaration. This brings EU imports into line with the safety and security requirements currently in place for goods imported from non-EU nations.

The legal responsibility for submitting an ENS declaration lies with the carrier/transporter of the goods, rather than the business purchasing or selling the goods. If you intend to import goods yourself, or in vehicles owned and operated by your business, then you will be responsible for completing and submitting the ENS declaration.

The ENS declaration must be submitted before the goods arrive in the UK, and the amount of time before arrival depends on the method of transport:

• Long-haul container ship – at least 24 hours before loading onto the vessel
• Long-haul maritime bulk or break bulk – at least 4 hours before arrival in the UK
• Short sea voyages – at least 2 hours before arrival in the UK
• Short-haul flights (less than 4 hours) – by the time of take-off
• Long-haul flights– at least 4 hours before arrival in the UK
• Rail – at least 2 hours before arrival or at least 1 hour if the journey is less than 2 hours long

What about Ireland?

The Republic of Ireland is a member of the European Union and is the only member state to have a land border with the UK. As a condition of the Good Friday peace agreement, dating back to 1998, no hard border can exist between the Republic of Ireland and Northern Ireland (part of the UK).

This means that, for now, goods that either originate from The Republic of Ireland, or pass through the Republic of Ireland or Northern Ireland en route to Great Britain (England, Wales and Scotland), still qualify for a 175-day delay before any customs declaration must be made and customs duties and import taxes paid to HMRC.

This 175-day delay is expected to remain in place until the UK and the EU have concluded negotiations over the Northern Ireland Protocol.

Adapting your business to the new regulations

To make the most of the large market for European imported goods in the UK, it’s crucial that your business knows the rules and regulations that govern trade between the UK and EU, so you don’t fall foul of the law.

Whether you’re a sole trader or the owner of a medium-sized enterprise, take the time to read the UK government’s step-by-step guide to the import process. You'll then be well placed to adapt your current business practices to work inside the new import framework.

As the rules around imports and customs declarations can be complex, you may wish to consider hiring a specialist to deal with customs on your behalf. Typically this will be a freight forwarder or a customs agent or broker. Only you will know whether the cost of such specialist help is worth it for your business at the scale at which you are planning to import.

Finally, one way to prepare your business for any potential disruption caused by delays in importing goods and clearing customs is to ensure you have adequate insurance. Superscript offers business interruption insurance that can help your business maintain its cash flow even if your supply chain is disrupted by delays at the border.

EU to UK import checklist

• Identify the place of origin of the goods
• Calculate the value of the goods you are importing
• Decide whether to complete your own customs declarations of hire a customs agent or broker
• Check if the goods you’re importing meet the UK-EU Preferential Rules of Origin to reduce your customs duty
• Find the product’s commodity code using the Trade Tariff Tool
• Confirm whether you need any licenses or certificates to import your chosen goods
• Ensure your goods for import meet UK marking, labeling and marketing standards
• Ensure your imported goods meet safety and security standards and file an ENS declaration if you will be transporting the goods over the border yourself
• Keep all of your invoices, receipts and records of all transactions and payments

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