As a member of the EU the UK benefits from 40 trade agreements with 70 countries on preferential terms that the EU has negotiated on our behalf. The result of this is that the UK gains reduced or no tariffs on imports and exports between the trading partners along with reduced regulatory barriers. The UK government has been working to replicate these trade agreements, the latest information on these can be found here.

1. Tariffs

From the 01 January 2021 the UK will implement its own tariff schedule, known as the UK Global Tariff (UKGT). UK import duties will apply to all imports from countries with which the UK has no trade agreement. Note that the UKGT differs to the EU’s Common External Tariff which the UK has previously followed.

The UKGT applies exclusively to imports; duties on UK exports depend on EU and other trading partners.

We advise that businesses check the import tariffs for goods imported to the UK here.

2. Market Access

Today, if an EU business believes it faces a trade barrier that limits or prevents them exporting they can report this to the EU Commission who will investigate and take appropriate action to rectify the barrier.

From the 01 January 2021 UK businesses will no longer report trade barriers to the EU Commission and instead report them to UK government. UK government will take on the responsibility to investigate and take appropriate action.

A UK business can report a trade barrier here.

3. Preferential Rules of Origin (RoO)

Free trade agreements accord lower “preferential” tariffs or eliminate tariffs entirely on products originating from the countries that are part of the agreement.

If your business is trading with countries with which the UK has concluded a free trade agreement at the time the transition period ends, showing compliance with RoO set by the specific agreement is necessary to access preferential tariffs/claim preferential treatment.

We do not yet know what the rules of origin will be in any UK-EU free trade agreement. We will update the website as and when we have more detail.

A majority of the information in this section is relevant for businesses that have only traded within the EU Single Market and Customs Union. For businesses that trade with countries outside the EU this should all be familiar to you, though it is worth double checking. Below we look at the basics steps businesses need to take.

We would also strongly recommend you read the UK governments Border Operating Model which provides a significant amount of information on how to move goods between Great Britain (GB) and the EU. This can be found here.

1. VAT number

Are you VAT registered in the UK? If you are not and plan to import or export goods between GB and the EU then you must apply for one immediately.

Apply for a VAT number here.

2. EORI numbers – GB, NI and EU

GB

If you are responsible for either importing goods into GB or exporting them from GB you will need a GB EORI number (starting with GB). Last year (2019) VAT registered businesses were enrolled with an EORI number, it is worth double checking whether you already have one.

The application process takes around 10 minutes to complete and you should hear back from government within a week of applying. Note that you will not be able to receive a GB EORI number until you have a UK VAT number.

You can apply for a GB EORI number here.

NI

If you move goods to or from Northern Ireland (NI) you will need an EORI number that starts with XI. In order for you to obtain one you will first need a GB EORI number. If you already have a GB EORI number and HMRC thinks you need an XI EORI number they will automatically send you one in mid-December 2020.

EU

If you export your goods to an EU country and are responsible for the import declaration into the EU then in addition to a GB EORI number you will need an EU EORI number.

Information on applying for an EU EORI number is available here.

3. Customs declarations and the Staged Approach to Customs Import Controls

Unlike today, in order to move your goods into and out of the UK customs declarations will be required. There are two ways to do this:

• Complete the declarations yourself if you have the resource, expertise and systems in place. If these are not in place already then we strongly advise using the option below.
• Use a customs broker. A broker will prepare and submit customs declarations on behalf of your business. More information is available here. To allow a broker to do this on behalf of your business you will need to issue the broker with a letter of representation. More information on representation is available here.

A list of customs brokers is available here.

UK government have introduced a staged approach to the imposition of customs controls on EU imports to GB. This will reduce the amount of information businesses need to provide when moving their goods into GB from the EU. Note this does not apply to GB exports to the EU and does not apply to moving your goods in or out of the EU.

The staged approach is as follows:

• January 2021: Traders importing standard goods will need to prepare for basic customs requirements, such as keeping sufficient records of imported goods, and will have up to six months to complete customs declarations. While tariffs will need to be paid on all imports (should the UK and EU not secure a free trade agreement or the company cannot prove they comply with the rules if the UK and EU do secure a free trade agreement), payments can be deferred until the customs declaration has been made. Businesses will also need to consider how they account for VAT on imported goods.
• April 2021: All products of animal origin (POAO) and all regulated plants and plant products will also require pre-notification and the relevant health documentation.
• July 2021: Traders moving all goods will have to make declarations atthe point of importation and pay relevant tariffs. Full Safety and Security declarations will be required.

Businesses do not have to make use of the staged approach if they already know how to complete and submit customs declarations and plan to do this for trade between GB and the EU.

4. INCOTERMS and Contracts

Customs declarations include information on the terms of delivering the goods and who is responsible for each part of the process, these are known as INCOTERMS. These are agreed between the buyer and seller.

It is therefore important you are familiar with INCOTERMS and agree the appropriate terms with your buyer and/or seller. With this in mind companies should consider reviewing their contracts with their suppliers and/or customers.

For more information on INCOTERMS visit here.

5. Classification

In order to import your goods to or export your goods from the UK the correct commodity code needs to go on the customs declaration.
Companies may wish to use a customs expert to ensure their goods are classified correctly.

More information is available here.

HMRC also provide informal advice on classification of goods. The address for that advice is tariff.classification@hmrc.gov.uk

6. Valuation

In order to import your goods to or export your goods from the UK they must have a value. There are six methods by which to value your goods. The most commonly used method is the “transaction value”.

More information on how to value your goods is available here.

7. Origin

In order to import your goods to, or export your goods from the UK, the correct origin of the products needs to be stated on the customs declaration.

An origin declaration is mandatory and it does not allow a tariff reduction unless origin requirements set by specific trade agreements are met.

In principle, origin is conferred to a specific country if:

• The product was “wholly obtained” in that country, so if no imports were used in its production, or
• The product underwent its “last substantial transformation” in that country.

The EU has a set of rules to determine where the last substantial transformation took place.

More information on EU origin rules for specific products is available here.

8. Useful links to support your preparedness

Link to HMRC letters to traders:
https://www.gov.uk/government/publications/letters-to-businesses-about-new-trade-arrangements-with-the-eu-from-1-january-2021?&utm_source=stk_email100&utm_medium=email&utm_campaign=transition_

Link to the Trader Checklist:
https://www.gov.uk/government/publications/hmrc-brexit-transition-communications-resources

Link to short information videos:
https://www.youtube.com/playlist?list=PL8EcnheDt1zgewSxxQGs7l9OGDC2KxYTo

Link to decision trees on importing and exporting processes:
https://www.gov.uk/government/publications/how-to-import-and-export-goods-between-great-britain-and-the-eu-from-1-january-2021

Here’s a link to our step by step guide to importing:
https://www.gov.uk/prepare-to-import-to-great-britain-from-january-2021

And a link to our step by step guide to exporting:
https://www.gov.uk/prepare-to-export-from-great-britain-from-january-2021

Northern Ireland – 5 December

GB-NI

From 1 January 2021, you will need to make declarations and may need to pay any tariffs due when bringing goods into Northern Ireland from Great Britain or from outside the EU.

The government has launched the free-to-use Trader Support Service which will help businesses and traders prepare for the changes that will affect your business if you move goods into and out of Northern Ireland. Register for the Trader Support Service.

NI-GB

From 1 January 2021, there will be no changes in how qualifying Northern Ireland goods move directly from Northern Ireland to Great Britain.

Before you move goods

1. If you plan to move goods between Northern Ireland and non-EU countries (including Great Britain), you’ll need an EORI number that starts with XI.
2. If you plan to move goods between Northern Ireland and Great Britain, or bring goods into Northern Ireland from outside the UK, you can sign up for the free Trader Support Service.
3. If you’re not using the Trader Support Service, you can get someone to deal with customs for you, or find a training provider to help you.
4. If you import goods into Northern Ireland and want to declare your goods not ‘at risk’ so that EU duty will not be payable on those goods, you’ll need to apply for an authorisation for the UK Trader Scheme.
5. If you import goods regularly, you can apply for a duty deferment account to delay paying most customs charges.
6. To understand any duty or other measures that apply to your goods, you’ll need to find the right commodity code to make your customs declaration when you bring goods in or send goods out of Northern Ireland.

EU, EEA and Swiss nationals already in the UK

For EU, EEA and Swiss nationals resident in the UK by 31 December 2020 who wish to stay will need to apply to do so through the EU Settlement Scheme.

Applicants will be granted either pre-settled status if they have been resident in the UK for less than five years or settled status if they have been resident in the UK for more than five years.

Pre-settled and settled status will allow EU, EEA and Swiss citizens to continue living, working and studying in the UK.

The application is a free, three step process requiring basic information on identity, proof of residence and a criminality check.

The scheme is open, with over 4 million applicants already receiving pre-settled or settled status. EU, EEA and Swiss citizens have until 30 June 2021 to apply.

Apply for the EU Settlement Scheme here.

EU, EEA and Swiss nationals coming to the UK from 2021

From 01 January 2021, free movement will end, and the UK will introduce a points-based immigration system. The new system will treat EU and non-EU citizens equally. Anyone you want to hire from outside the UK will need to apply for permission in advance.

Under the new points-based immigration system, anyone coming to the UK for work must meet a specific set of requirements for which they will score points. Visas are then awarded to those who gain enough points. Further information is available here.

You will need to have a sponsor licence to hire most workers from outside the UK. You can apply for a licence here.

Type Approval

European Community Whole Vehicle Type Approval (ECWVTA) and EC Type-Approvals are required for the registration and placing on the market of whole vehicles, vehicle systems and separate components, respectively. They ensure products meet EU standards and are accepted throughout the EU.

Following the end of the transition period, EC type-approvals issued outside of the UK will no longer be automatically accepted for registering vehicles in the UK; similarly EC type-approvals issued by the UK will no longer be valid for sales or registrations in the EU27.

This does not apply to EC type-approvals for individual components, National Small Series Type Approvals (NSSTA) or Individual Vehicle Approvals (IVA).

The UK will continue to recognise these, along with United Nations Economic Commission for Europe (UN-ECE) approvals for systems and components. The EU will continue to recognise UN-ECE approvals issued by the UK.

To help ensure the continued supply of automotive products into the UK, a provisional UK Type Approval Scheme has been put in place by the Department for Transport.

The UK will issue ‘provisional’ UK type-approvals, upon application prior to the UK’s departure from the EU to manufacturers that can prove they hold valid EC type-approvals. This will be an administrative conversion of valid ECWVTAs into UK type-approvals. It will ensure that products can continue to be sold and registered in the UK.

Provisional approvals will be required for vehicle categories – M (passenger vehicles), N (goods vehicles), L (2/3 wheelers and quadricycles) and T (tractors).

The UK will accept either a ‘provisional’ UK approval or a valid EU approval for category O (trailers) and NRMM.

The provisional UK type-approval will be valid for 2 years from the date of issue. It will need to be converted into a full UK type-approval during this period or it will become invalid. Legislation to allow the conversion is expected to be in place during 2021.

Manufacturers currently holding a VCA-issued ECWVTA, who intend to continue placing their products in the EU27 following a no-deal exit, must transfer that approval to a new ECWVTA from a type-approval authority in an EU country.

Manufacturers wishing to place new products on the EU market after the UK leaves the EU will need to follow the existing procedure for obtaining a new EC type-approval. Full testing and certification must be done by an EU type-approval authority and a technical service designated by that authority.

More information on UK type-approvals is available here.

CO₂ Regulations for Cars and Light Commercial Vehicles  

The obligations and enforcement of CO2 legislation will become the responsibility of the British government from day one of exit.

Compliance in Great Britain will be based on registrations in England, Wales and Scotland from 01 January 2021. Due to the Northern Ireland protocol, registrations in Northern Ireland will continue to be the subject of the EU regulation. Therefore, manufacturers will have a target for Great Britain, with compliance based only on registrations in Great Britain. Registrations in Northern Ireland will count towards compliance at an EU level.

Although currently being formally consulted on, government have outlined the following approach:

• Any excess premium for missed targets becomes payable to the British government (£86 per gram of exceedance per vehicle registered).
• Domestic approval of eco-innovations will be required (any approved eco-innovations prior to the point of exit will be automatically recognised in Great Britain).
• Fixed derogation thresholds will be changed to thresholds based on each manufacturer’s historical share of European Economic Area sales occurring in Great Britain.
• At the point of exit, the average mass figure will be retained but will be updated at the first due update to reflect the average mass of Great Britain vehicles only.

Full government guidance will be published later in the year.

Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH)

The regulations on REACH aims to reduce the risk from chemicals to humans and the environment and encourages the substitution of substances of very high concern.

Upon exit day the UK will replicate EU REACH regulations with the Health & Safety Executive (HSE) being the regulator.

There will be a dual registration regime (UK and EU). This will have an impact on:

Automotive production facilities – plants that are users of industrial chemicals that are not placed on the market (e.g. vehicle paints, adhesives, body sealers).

Automotive aftersales distribution centres and dealerships (including vehicle manufacturers with no UK manufacturing presence) – users/distributors of automotive aftermarket chemical products that are sold to professional and private users (e.g. top-up screenwash, engine oil refill, leather cleaner).

From 01 January 2021 REACH registrations/authorisations of UK companies will become invalid in the EU. Those will be grandfathered (including registrations existing 2 years before exit and transferred to EU) to UK system – subject to initial validation and later full data submissions.

In the UK a new IT system has been set up to manage the REACH registrations. Companies with registration requirements (producing or importing substances above 1 tonne per year) would have to enter basic information on the chemicals into the UK system within 120 days post exit. Companies will then have to provide the technical information within 2 years of the UK’s exit date.

If companies (UK based downstream user or a distributor) wish to access the UK market they will have to either:

• Procure substances or mixtures (directly or in articles) from a UK-based entity – no further action needed
• Procure substances or mixtures (directly or in articles) from an EU/EEA-based entity

Plus:

• Enter basic information onto the UK’s REACH IT system within 180 days of the UK’s exit
• Provide technical information required under UK REACH – 2 years post exit
• Convince the EU/EEA supplier to appoint a UK-based Only Representative (OR)

If you are a UK based registrant (manufacturer or importer) who wants to access the EU27 market then you will have to either:

• Transfer your registration(s) to an EEA-based entity (e.g. affiliate or OR)
• Support your EEA-based importers to comply with EU REACH.

More information is available here.

CE and UKCA Markings

A new UK product marking will be required to place goods on the Great Britain market, this will be the UK Conformity Assessed (UKCA) marking.

The UKCA marking will apply to most goods currently subject to the CE marking. Note the UKCA marking alone cannot be used for goods placed on the Northern Ireland market, which require the CE marking or UK(NI) marking.

From 01 January 2021 until 01 January 2022 businesses will still be able to use the CE marking to place goods on the Great Britain market. This applies so long as the Great Britain and EU rules remain the same.

From 01 January 2022, the CE marking will not be recognised in Great Britain however a product with a CE marking would still be valid for sale so long as it is also UKCA marked. The UKCA marking can put on a label and affixed to the product or put on an accompanying document.

From 01 January 2023, the UKCA marking must be affixed directly to the product

Note the UKCA marking will not be recognised on the EU market. To place goods on the EU market CE marking will still be needed.

More information on the UKCA marking is available here.

Personal data is any information that can be used to identify a person, including names, delivery details, IP addresses, or HR data such as payroll details. Most organisations use personal data in their daily operations.

An example of this is a UK company that receives customer information from an EU company, such as names and addresses, to provide goods or services.

If you receive personal data from the EU/EEA, you should ensure you can continue to lawfully receive data from your clients in the EU from 1 January 2021, whatever the EU decides. Specifically, this means:

• You should take stock of the personal data you process prior to 1 January 2021.
• If you receive personal data from a company based in an EU/EEA country, you should map your data flows and put in place alternative transfer mechanisms, such as Standard Contractual Clauses (SCCs), with any relevant EU organisations (the EU has yet to make a decision as to whether they accept that the UK’s data protection regime is still adequate).
• Visit UK/using-personal-data-2021 for guidance on the actions your business or organisation needs to take regarding data protection and data flows.

We also encourage you to look at the Information Commissioner’s Office (ICO) website and specifically the guidance on data preparedness and the ICO’s interactive tool on Standard Contractual Clauses.

The ICO will have helpline open between 10:00 and 14:00, Monday 28 December to Thursday 31 December inclusive. This will be to answer EU withdrawal questions.

0303 123 1113

For EU businesses doing business with the UK the EU Commission has a useful readiness checklist available here.

Moreover, there is a longer overview of the main areas of change that will take place in any event as of the end of the transition period, whether there is an agreement on a future relationship between the UK and EU or not here.

National Member State Brexit Advice – https://ec.europa.eu/info/brexit/brexit-preparedness/national-brexit-information-member-states_en

Belgium – https://finances.belgium.be/fr/douanes_accises/entreprises/brexit

France – https://brexit.gouv.fr/sites/brexit/accueil/preparer-la-fin-de-labrperiode-d.html

Germany – https://www.auswaertiges-amt.de/en/aussenpolitik/europa/-/2404912

Netherlands – https://business.gov.nl/running-your-business/international-business/brexit/brexit/

Spain – https://www.lamoncloa.gob.es/lang/en/brexit/howtoprepare/Paginas/economic-operators.aspx