With less than two weeks to go until the Brexit Transition period ends, HM Revenue and Customs (HMRC) is urging traders to complete crucial preparations needed to trade with Europe from 1 January.

This month, HMRC has sent 250,000 letters and emails to VAT-registered traders urging them to get ready for the new trading rules.

Ongoing trade negotiations between the UK and the EU will not impact on this deadline.

There will be no further extensions and these talks will not remove the changes ahead for trading with Europe. As of 1 January, businesses will no longer be able to trade with EU countries in the same way they do at present.

Katherine Green and Sophie Dean, Directors General, Borders and Trade, HMRC, said: 

“We understand the complex pressures that all businesses are dealing with this winter, as a result of COVID-19. But everyone in the UK who trades with EU countries or will move goods under the Northern Ireland Protocol will be affected by new processes and rules from 1 January 2021. They must take action to protect their business or risk disruption in the New Year.

“We urge businesses to act now. HMRC is working hard to help you prepare so you can continue to trade smoothly at the end of the Brexit transition period. Please take advantage of the help on offer – including live webinars, videos and forums.”

The changes to customs and tax rules will affect everyone who trades with EU countries, no matter the type or value of the goods they buy or sell, how frequently they trade or how their goods are transported.

HMRC is encouraging customers to complete the new trader checklist, which can be found on GOV.UK. This simple guide will help them work through the necessary steps they must take to be ready for 1 January 2021 and identify aspects of their preparations which need urgent attention.

Businesses that are not confident of their readiness or yet to prepare for the new processes are warned not to move goods from 1 January, as doing so risks delays and added costs for them.

The key actions businesses must take to continue trading smoothly with EU countries next year include:

  • Check when you need to make customs declarations. From 1 January 2021, you will need to make declarations for goods you import and export. However, if you import goods from EU countries that are not controlled, you may be able to delay making declarations for up to six months.
  • Get ready to make customs declarations. Customs declarations are complex and time consuming, so most businesses use a specialist, such as a customs broker, freight forwarder or fast parcel operator, to deal with customs for them. This is important regardless of the amount or value of trade your business does with Europe.

PITTARDS case study

Pittards was established in Yeovil in 1826, making leather for the local glove industry. Through its work with the military, Pittards has developed expertise in the manufacture of performance leathers - for example, water resistant, abrasion resistant, fire retardant and anti-bacterial types. In recent years, Pittards has expanded into making finished products, owning luxury men’s label Daines & Hathaway and manufacturing other premium leather goods in the UK.

Dispatch and Logistics are very important to the organisation. This ensures that goods are packed, invoiced promptly, customs documentation is complete, and that the goods are sent using our preferred freight forwarders to meet the customer’s time requirements. Pittards exports 92% of its products and experienced in shipping internationally.

Due to our extensive global experience, our documentation for exports can already be used for shipping to EU countries after the Brexit transition period with no major changes needed. We have been speaking with our freight and customs agents, who we currently work with for our trade with the rest of the world, regarding EU trading and they have no concerns with our current practices which was great to hear.

We are working with our suppliers and retailers to prepare for the new trading rules with the EU, providing clearing agent contact information to our suppliers so that they can advise our agent of the goods before they arrive into the UK. We are focusing more on Incoterms with our EU suppliers to ensure that goods will travel on the correct delivery terms on import. This has led to stronger communication between the purchasing and logistics team. And we know that Rules of Origin will be important and we’re making sure we familiarise ourselves with those.

Our freight forwarder has been invaluable in our preparations. They are responsible for delivering goods at an agreed date and submitting the customs declarations for us. This is done by checking our export/import paperwork, classification and rules of origin, invoices and packing lists, so that the correct tariffs and values are applied. GOV.UK is our first port of call for information on customs processes for our goods, but if we are ever unsure, our freight forwarder can always advise us.

When seeking a freight forwarder for the first time we’d always recommend that you consider the experience of the company in question, for example, whether they have exported to the country or countries you are seeking to export to. With 1 January coming closer every day it is also worth asking if they have hubs in the UK dedicated for EU imports and exports and if they have hubs in Europe.  

Reg Hankey CEO of Pittards said:

“Pittards exports UK manufacturing excellence around the world, we are proud of that and have firm plans in place to extend that trading, both in and beyond Europe.

“As a global exporter with already exacting industry compliance standards, Pittards will able to transition to new EU trading, and our in-house logistics team with its international experience and expertise has laid a solid foundation for the transition.

“Innovation is at the heart of everything Pittards does, from engineering performance leathers that are water resistant and anti-bacterial, for global brands and the military, to producing premium leather goods, and we will take that same innovative spirit and apply it to all that we do next year to ensure that we thrive.”