In 2018, a report found that 235,000 businesses in the UK export overseas, making it a big part of operations for many companies. However, as the UK prepares to leave the EU, the way that businesses export their goods is susceptible to change.
We have previously advised on how to prepare for importing in your company. It’s no surprise that exporting will require similar preparation. As the government makes moves towards a trade deal with the EU and other countries, it is vital to make sure you are putting the right measures in place so your business can avoid delays and continue to operate smoothly. Doing so will allow you to reduce delays and adapt your business to the UK’s trade future.
In this blog, we have put together a checklist of things to do to get your business ready for UK exporting after the transition period ends on 31st December 2020.
- Get an EORI number
- Prepare for borders and customs
- Adjust turnaround times and costs
- Find bespoke guidance for the countries you deal with
- Stay up to date with announcements
- Get advice on exporting
Get an EORI number
If you want to export to countries within the EU after the transition period has ended, you will need to apply to get an EORI number. This is already required for shipping to non-EU countries, so you may have one if you export elsewhere.
If you haven’t got one, you will face the risk of HMRC not clearing your goods to enter the country. As a result, you could experience delays or storage fees.
You can apply online for an EORI number. You will need to supply your VAT and National Insurance number, your Unique Taxpayer Reference, your company start date and Standard Industrial Classification code, using your Government Gateway login details. It takes up to five working days to receive your EORI numbers.
As well as your EORI number, find out whether you need a licence or a certificate for your UK exports to the EU. You’ll also need to make sure what other rules, relating to the products you wish to send, apply to the destination country.
Prepare for borders and customs
While the UK has announced a phased approach towards border checks on EU goods entering the country, the EU has stated that full border checks will apply on UK goods starting from 1st January 2021. So, it is vital to make sure you have everything in place that you need to get your products past these checks.
Similarly, if you are exporting to non-EU countries, you should spend time researching their border checks and customs procedures to make sure your goods are cleared to reach your customers in those countries.
One of the steps outlined in government advice for companies wishing to export is to appoint an individual or business to deal with customs on your behalf. This could be a customs agent, freight forwarder or fast parcel operator. You may even hire an internal resource to do this. Whoever you use must be registered and established in the EU.
This person or business will handle customs, including making declarations and the transport of your goods. You will still be liable for keeping records, paying Customs Duty and VAT and providing accurate information.
Adjust turnaround times and costs
With the UK no longer able to access the free movement of goods that comes with the EU single market, you may have to adapt your processes around exporting.
Part of this will include adjusting your delivery times in line with new border checks, particularly if you face delays. The effect of further checks and processes will become more evident over time, but it is essential to track any changes to your turnaround times. Make sure to communicate these changes to your customers to set their expectations appropriately, particularly if they are in EU countries.
Similarly – and depending on any trade agreements the UK lines up – you may find increased tax, tariffs and admin costs when exporting. To counterbalance these, you may need to increase the costs of your goods for your overseas customers. If this is the case, communicate it clearly to customers and ensure it makes financial sense for your business.
Find bespoke guidance for the countries you deal with
With the UK in negotiation with the EU, as well as countries such as America and Australia, details are awaited as to what future trade may look like. However, trade agreements have been signed with countries totalling £111billion in trade deals, so exporting opportunities in these countries already exist.
Depending on any deals reached, and the different regulations of countries, the processes you undertake to export may vary from one customer to the next if they are located across the world. It is therefore vital to check guidance for the specific countries you will be exporting to. This includes what border checks they have in place, what licences and paperwork you will need and any restrictions on the goods that can enter that country.
The government has published a library of guidance that outlines the trade details for different countries. The guidance covers countries within the EU, as well as the rest of the world. Make a list of countries you will be exporting to, review the guidelines and make sure your business is prepared.
Stay up to date with announcements
On the road to the UK’s exit from the EU, and with less than 6 months until the transition period comes to an end, there is still much to be decided about the UK’s future international developments. As already mentioned, talks are ongoing with both the EU and many other potential trading partners.
The outcomes of these negotiations are likely to be announced in the coming weeks and months. When they are, they will paint a clearer picture of what exporting might look like for businesses and will allow you to adapt your operations accordingly.
It is therefore worth keeping up to date with any announcements through the news and government guidance. You can also sign up for government emails for weekly updates.
Get advice on exporting
The advice laid out in this blog should set you up for exporting after the EU transition period has ended. While we await further updates, you should start preparing now to bring your staff up to date and ensure smooth progress into the new trade processes.
To get advice and book a one to one discussion with an advisor, please contact 0330 2020 216 or email [email protected].