What is changing?
At present, as a temporary measure, most goods imported from the EU are allowed to enter the UK without providing full customs paperwork “upfront” (as is currently required for goods entering the UK from non-EU countries). Instead, most businesses can make customs declarations and pay any applicable tariffs “in arrears” (within 6 months of the point of import). Similarly, import VAT does not have to be paid at the point of import; it can be paid at a later date, by using postponed VAT accounting (in the case of VAT-registered businesses).
But from 1 January 2022, customs declarations will be required “upfront” and any applicable tariffs must be paid “upfront” as well (although VAT-registered businesses will still be able to use postponed VAT accounting to avoid having to pay Import VAT at this stage). There is also likely to be a higher level of physical checks (currently these are limited to “high risk live animals and plants”). The postponement announced by the UK Government only relates to the following measures, most of which are relevant to agri-food imports only:
This follows the postponement of the requirement for all relevant products to be labelled with the new UK CA safety mark instead of the EU CE mark (originally scheduled for 1 January 2022 for most products); that has now been delayed until 1 January 2023.
Impact of the postponement
Whilst the postponement may reduce the risk of disruption to some degree, a failure to provide the correct paperwork from 1 January 2022 will mean that goods cannot clear customs and enter the UK market. It also remains to be seen how well UK customs IT systems and other border-related infrastructure will cope with the change. It follows that, despite the postponement, there remains potential for disruption to supply chains – indeed the experience of UK firms exporting to the EU (where upfront paperwork has been required from 1 January 2021) suggests that this could be significant. With a view to mitigating the risk of disruption, some businesses are likely to stockpile ahead of the changes, which may itself create shortages. There is also a risk that media coverage of the postponement will make some businesses think that they no longer have to prepare for change on 1 January 2022 – which is not the case.
What can you do to prepare?
To mitigate the risk of disruption:
The bottom line is of course, make sure you are engaged with a effective, reliable customs agent who has IMPORT and EXPORT capabilities, will look after your transit documents, has a deferment account and has excellent visibility of transport availability and any port and customs issues.
Call our international team on +44 (0)1327 362 222
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