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How the post-Brexit rules for EU trade are set to change at New Year

Brexit: are you and your ecommerce ready for the split?

As the first anniversary of the post-Brexit trading deal between the EU and the UK approaches, processes are soon set to get tighter as full customs controls come into force. We look at what that’s likely to mean in practice for retailers and brands selling to and importing from countries that are members of the European Union. 

It’s almost a year since Trade and Cooperation Agreement (TCA) between the UK and the EU was signed on Christmas Eve 2020, coming into force on January 1. Now procedures between the two parties are set to get tighter still as full customs controls come into force on January 1. Many retailers and brands must, once more, adapt to new ways of working. 

Aodhán Connolly, trade advisor at the British Retail Consortium, says: “Retailers are working closely with European suppliers to prepare them for future UK checks. Where necessary and practicable, some retailers may stockpile key products ahead of new customs declaration in January. Nonetheless, it is essential that EU suppliers ensure they are aware of new documentation requirements ahead of the new January and July import controls.”

How do trading arrangements work now?

The Trade and Cooperation Agreement between the EU and UK put new trade barriers in place between the UK and the trading bloc that it was once a member of. These have already meant  significant changes for the way that retailers and brands do business with Europe, but the effect of the barriers will not be felt in full until January 1 2022.

The deal itself did not directly add customs tariffs or quotas to goods imported and exported between the UK and the EU, but it has added extra administration. That includes setting up VAT payments to each individual EU state – and delays at borders while goods are checked by customs. EU rules of origin have also meant extra customs charges when importing goods that were at least partially made outside the UK.

What effect has this had on retailers and brands?

Already, the changes have seen retailers from global sports fashion retailer JD Sports to footwear brand Vivo Barefoot shift warehouse distribution into the EU. Others, such as Jigsaw and John Lewis, stopped exporting to Europe, while some retailers have closed stores in Europe. Marks & Spencer, for example, has closed the Paris food shops it ran with a franchise partner, while most recently, Majestic Wine has closed two superstores in the Calais area. The retailer says on its website that post-Brexit trading changes were behind the decision. “Following the changes to personal allowances enacted on us by the UK government post-Brexit we have had no choice but to make the regrettable decision to close these stores,” it says. 

Rules of origin changes have also meant significant costs for retailers including Asos, which has previously said it expected to pay £15m a year as a result. 

What changes on January 1?

Up until now, there have been “easements” to the way importers and exporters have to comply with the terms of the Trade and Cooperation Agreement. HMRC has set out the changes that will come into force, and suggests that since many retailers will want to use a third-party to handle logistics, it’s important to check the terms and conditions of couriers and freight forwarders about who will handle customs declarations.

The UK government has, however, temporarily delayed post-Brexit checks on goods being imported from Ireland – so current procedures will not change on January 1 between Northern Ireland and Great Britain. 

Customs declarations

Staged customs controls were in force during 2021, enabling exporters to delay making their import customs declarations. From January 1 2022, however, most customers will have to make their declarations, paying tariffs where appropriate, at the point of import. From January, the customs declaration must include the individual country code of the relevant member state rather than the EU country code. 

It’s possible to use a simplified declaration procedure for imports, but authorisation to do that can take up to 60 calendar days. Information on the procedure can be found on

Border controls

Goods being moved between Great Britain and the European Union will be checked at ports and other border locations from January. Goods can only be released into the market if they have a valid customs declaration and have received customs clearance. 

Where checks cannot be done at the border they may be sent to an inland border facility for physical or document checks, with knock-on delays as a result.

Rules of origin

UK and EU importers need to be able to state the origin of the goods they trade between the UK and EU. For some goods, exporters need to hold supplier declarations to show where they were made and where materials came from. From January 1, those issuing statements of origin for goods exported to the EU will need to hold the supplier declarations at the time that they export their goods, whereas up till now the those declarations could be supplied later. 

Import VAT

HMRC says that importers can continue to used Postponed VAT Accounting (PVA) on customs declarations require them to account for import VAT.

Non-Brexit changes

Brexit is not the only factor to affect the regulation of cross-border trade this year. The EU’s abolition of the VAT exemption on low-value goods, the introduction of the Import One-Stop Shop (IOSS) have brought extra administrative requirements, while from January 1 there could e new delays for parcels at customs if retailers, marketplaces and their logistics partners are not prepared for the arrival of Harmonised System 2022.

On January 1 2022, the World Customs Organisation (WCO) will implement the 7th edition of its Harmonised System, bringing sweeping changes to how importers and exporters determine and assign HS codes to many of their products. The Harmonised System serves as the international basis for customs tariffs and the compilation of international trade statistics in more than 200 countries around the world.

The new HS 2022 edition introduces more than 370 new HS codes and more than 100 deletions, covering a wide range of goods across industries. Among the items affected are e-cigarettes and other vaping products, cameras, drones, lighting and antiques. HMRC says that information on trade tariffs can be found on by searching for ‘trade tariff tool’. 

Martin Palmer, chief content and compliance offer at Hurricane Commerce said earlier this month: “This is the first HS update since 2017 so is a significant moment for anyone involved in cross-border ecommerce. For many retailers and shippers, the data requirements will change in areas including HS codes and duty and VAT rates, as well as having implications for prohibited and restricted goods screening.”

He added: “One of the biggest impacts will be around the accuracy of the landed cost of a product – the total amount of sale, transport and delivery to the end customer.”

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