January 2021 marks the first stage of the UK’s new import controls on goods moving to GB from the EU. This section describes the Stage 1 Core Model for importing goods – the processes that all movements must follow from January 2021. In addition to the Core Model, there will be additional requirements on some commodities. Further requirements that apply for particular goods movements are outlined in Additional Requirements SECTION 1.2.
The Stage 1 Core Model consists of the following processes, set out in this section:
- (1.1.2) Import Preparations
- (1.1.3) Customs Declarations
- (1.1.4) Duties and Import VAT
- S&S declarations are not required, but traders have the option to submit them. See SECTION 3.1 for details on the
Various (1.1.5) Import Facilitations exist to reduce the impact of these processes. The facilitations available are also set out in this section.
(1.1.6) Non-Freight Imports. Most businesses use an intermediary when dealing with customs requirements. Businesses can either hire an agent or may want to recruit or train someone in their business to deal with customs for the company.
1.1.2 Import Preparations
From January 2021, in order to fulfil the import process, all traders will need to ensure they have:
- A GB Economic Operator Registration and Identification (EORI) number before moving
- The Commodity Code of their goods – needed to make a customs declaration and calculate duties on an
- The customs value of goods – needed to make a customs declaration and calculate duties on an import. The rules for valuation are based on the World Trade Organisation (WTO) valuation agreement and will not change from 1 January
- Considered whether they are able to, and would benefit from, using any available simplifications or facilitations SECTION 1.1.5, including deferring customs declarations for standard
Traders not deferring their customs declarations SECTION 1.1.3 will also need to ensure they have:
- Considered how they will make customs declarations to HMRC systems, and whether they will use an intermediary. Using the Customs Handling of Import and Export Freight (CHIEF) system requires the party making the declaration (the declarant or their representative) to hold a CHIEF badge (made available on request to HMRC) in order to make a customs declaration. Customs declarations can be made using commercial software or through Community System Providers (CSPs). Currently the majority of traders engaging with customs use an intermediary to help them comply with their obligations, including submitting declarations into CHIEF or Customs Declaration Service (CDS).
1.1.3 Customs Declarations
From January 2021, traders moving CONTROLLED GOODS must submit a standard customs declaration (or may use Simplified Declaration Procedures if they are authorised to do so) – this includes those moving excise goods. Traders must use the customs process currently applicable at the location that they are using to move their goods, as well as ensure any specific licencing requirements are fulfilled. Details of these can be found in Additional Requirements SECTION 1.2.
The full list of controlled goods can be found at ANNEX C.
From January to July 2021, traders moving STANDARD GOODS will have two options for submitting customs declarations for importing:
- Use Deferred Declarations – keep records of the imported goods but defer the declaration to HMRC for up to six months
- Use existing customs processes to complete a standard customs declaration at point of entry to GB (or use Simplified Declaration Procedures if authorised to do so).
Detailed information on deferring declarations, or submitting standard customs declarations, is outlined in the sections below:
The staged approach announced by the UK Government allows traders to make a record in their own commercial records at the point of entry of goods into GB, and then follow this with a supplementary declaration which must be submitted to HMRC within six months of the point of import. If the goods are being moved through a location without existing customs control systems, the EORI must accompany the goods.
If the goods are moving through a location with existing customs control systems, the person collecting the goods must bring evidence that can be used to prove a declaration has been made, such as the trader’s EORI. In order to complete the supplementary declaration, the trader, or an intermediary acting on their behalf, will need to be authorised for simplified declarations procedures and have a Duty Deferment Account.
Traders or individuals with a poor compliance history will be not be allowed to defer declarations in this way, and must submit a standard customs declaration, as with importers of controlled goods from January 2021. Traders who fall into this category will be contacted by HMRC and will be instructed that they will not be able to defer declarations.
Requirements to defer declarations
Traders will need a GB EORI number to import.
By the time they need to submit the supplementary declaration they will need access to an authorisation for simplified declarations for imports and a Duty Deferment Account. Details on applying for these can be found in Import Facilitations SECTION 1.1.5.
“Access to” means that either the trader or an intermediary acting on their behalf must be Customs Freight Simplified Procedures (CFSP) authorised and have a DDA. The UK Government expects that for most traders it will be beneficial to use their intermediary’s CFSP authorisation but to have their own DDA. If traders do use their intermediaries’ authorisation, from January 2021 traders will be able to do so without the intermediary becoming jointly liable.
Calculation of Tariff
From 1 January 2021 the UK Global Tariff will be in place. Any tariff that is due will be calculated and must be paid when the supplementary declaration is submitted. The relevant tariff will be calculated using the commodity code provided on the customs declaration.
If claiming tariff rate quotas (TRQs), traders can still defer declarations during Stage 1. However, as some UK tariff rate quotas work on a first come, first served basis, the sooner a claim is submitted on a supplementary customs declaration, the greater chance that the claim will be successful. This is also important for goods which are subject to a quota issued under license, such as beef.
Border Force will continue to complete risk based and targeted checks to detect and disrupt cross border criminal and terrorist activity, as they do now.
Controlled Goods (Standard Customs Declarations)
From January 2021, traders moving CONTROLLED GOODS must submit a standard customs declaration (or may use Simplified Declaration Procedures if they are authorised to do so) – this includes those moving excise goods. Traders must use the customs process currently applicable at the location that they are using to move their goods, as well as ensure any specific licencing requirements are fulfilled. Details on the standard customs requirements and the additional requirements for certain goods can be found in SECTION 1.2
The full list of controlled goods can be found at ANNEX C.
Control at border locations without existing customs control systems
For controlled goods entering GB through border locations that do not have existing customs control systems, where a declaration is required for imports, traders will have up to the end of the next working day to notify HMRC that the goods have entered the country. These locations will not be required to have systems in place (i.e. the GVMS or temporary storage) to control standard imports and exports.
Control at border locations with existing systems
Border locations will use their systems and infrastructure to facilitate the control of controlled goods. The UK Government will work with these locations to ensure goods not requiring a declaration on import until Stage 3 are allowed to flow through.
Traders will need a GB EORI number to import. Hauliers may be required to produce a valid EORI number upon entry into GB.
Groupage refers to a mixed load of consignments of different importers goods contained within one vehicle. It can also refer to a scenario where multiple product lines are brought together into a single consignment.
For individual imports within a groupage load, this does not negate the need for each individual consignment to have cleared the relevant requirements for those goods to be imported. This means that each individual consignment will need to have met both the ‘core’ model requirements, and where goods within a groupage load are subject to additional requirements, these will also need to be met.
The clearance of the entire groupage load is dependent on this, and therefore traders, intermediaries, and hauliers will need to ensure that the relevant declarations, permissions, and where necessary, paperwork, is in place to ensure groupage loads are not subject to delays or compliance action due to customs or other requirements not being met. The core import requirements are detailed in SECTION 1.1 and the key import additional requirements are detailed in SECTION 1.2.
1.1.4 VAT on Imported Goods
Traders not using Deferred Declarations
VAT registered traders not choosing to, or not eligible to defer their customs declarations will be able, but not compelled, to account for import VAT on their VAT return by using postponed VAT accounting.
Non-VAT registered traders who are not choosing to, or not eligible to defer their customs declarations will have the same options available to report and pay import VAT through the customs processes. As is possible for customs duties, traders and intermediaries can use duty deferment to defer payment of import VAT until a prescribed date, delaying payment for an average of 30 days. Details can be found in SECTION 3.1.4
Traders using Deferred Declarations
VAT registered traders who are eligible to defer their supplementary declarations must use postponed VAT accounting. This means they will need to account for import VAT on their periodic (usually quarterly) VAT return which includes the date they imported the goods. To do this they will need to estimate the import VAT due from the records of imported goods they are required to keep in their own commercial records. When they submit their deferred declaration, they must adjust this estimate to precisely account for the import VAT due on a later VAT return.
Non-VAT registered traders who choose to defer their supplementary declarations will follow the same process as they do for customs duties and will pay any import VAT due on their Duty Deferment Account.
Collection of Intrastat Data
HMRC will continue to require that all VAT registered businesses currently required to submit monthly Intrastat arrivals declarations to carry on submitting these from 1 January 2021, to the same timelines as currently required. This includes both businesses deferring their customs declarations and businesses providing customs declarations at the time of import. This is essential to continue our ability to produce National Accounts, Balance of Payments and impact government policy development, evaluation and performance monitoring and decision making to help UK businesses and the economy.
Consignments of Value Below £135
For imported goods in a consignment not exceeding a value of £135, excluding excise goods and gifts, import VAT will no longer be due at the border. Low value consignment relief will be withdrawn and VAT will be charged on the goods as if they were supplied in the UK and accounted to HMRC on the UK VAT return.
Businesses selling goods to be imported into the UK with a value not exceeding £135 will be required to charge and collect any VAT due at the time of sale. Businesses selling goods to be imported into the UK will be required to register for VAT in the UK and to account for the VAT due on their VAT return.
In circumstances where businesses sell goods to be imported into the UK with a value not exceeding £135 through an online marketplace, the online marketplace will be required to register for UK VAT and to account for the VAT due on their VAT return.
UK VAT registered businesses importing goods in a consignment not exceeding £135 in value that have not been charged VAT at the time of purchase will be required to account for VAT on their VAT return under the reverse charge method.
Separate guidance on how to pay and account for VAT on non-excise goods not exceeding £135 will be published in due course.