Key Aspects of the New Guidance
The first and foremost aspect of the new guidance is that UK-based traders will have to make a customs declaration before exporting goods to the EU. A similar declaration would also be required in case you are importing goods from the EU. Such a declaration should include key information about the goods being traded. The key areas that are covered under the declaration include a description of the goods as well as the appropriate tariff codes assigned to the products.
The second point that you need to keep in mind is that you may require new licenses and permissions in order to trade goods with EU business partners. The actual license depends upon the type of goods that you are trading. For example, goods and services categorised under the technology sector would need different permissions compared to food items. You need to check with the UK government website in order to ensure that you have the required permissions according to your items.
Thirdly, you will also need to ensure that you are registering a UK-specific EORI number in order to execute your trades. This EORI number usually starts with the letters GB. Further, you will also need to obtain a new EU EORI number if you are planning to import or export goods within the EU. In addition to the above, the tariff scheme will also change post-2020. As of now, the Common External Tariff of the EU customs union is applicable to all trades taking place within the EU. However, starting from 1st January 2021, the UK Global Tariff is going to replace it. The UK government has already set up a search tool that helps you in comparing the tariffs under the old regime and the new regime.
Finally, one point of relief for the traders is that the standard VAT rate will remain the same even in 2021. This rate has been frozen at 20%. In addition, the new guidance states that UK-based traders will now be allowed to zero-rate their goods. This implies that traders can charge their customers a 0% VAT. This rule is applicable to customers within the EU as well as outside the EU.
Thus, it is clear that the new guidance includes several changes compared to the earlier trade regime. It is advisable that traders make use of specialised export software in order to keep track of the changes that are taking place. This could help you in mitigating your compliance risk and ensure smooth trade operations.
In conclusion, it is evident that there are multiple regulatory aspects that UK-based traders need to comply with. If you need external assistance related to your trade compliance program, there are various trade management firms active in the market. Our export management software makes sure that your business is fully compliant with all trade regulations. For more information about our global trade management software offerings, please contact us.