Helping customers export out of Europe and into the UK

David Rae

Avoid the headaches of exporting

The UK has always had a strong importing economy and the vast majority of those goods come from mainland Europe.

According to the data provided by the UK parliament, £432 billion worth of goods was imported from the EU which accounts for 48% of total imports.

Exporting has always had its challenges but Brexit, Covid-19 and an imbalance of trade makes exporting from Europe into the UK just that bit harder.

There are some essential pieces of information and registrations that are needed to prevent delays at the border. Some of these will differ for a European business exporting or for a UK business importing so strong communication between both parties is important.

Here is a breakdown of essential things that businesses on both sides need when moving goods into the UK from Europe.

Always have a REX Number

All businesses that are exporting into the UK need to apply to become a Registered Exporter on the REX system. This will give a REX number which can be up to 35 digits, is used as reference to the issuing nation and acts as a certificate of origin for goods.

Businesses do not need to pay duty on the majority of goods exported from Europe but if they are not REX registered then they will certainly be liable for duty costs.

Only the businesses that are exporting into Britain need to apply for a REX number. More information and resources on how to apply can be found here.

Any UK businesses that are sourcing European goods should be aware that EU companies will often forget or are unaware that they need a REX number as it is not needed for most of their exports.

 If any business suspects that they have been paying for duty and there is a possibility that they did not need to then they can apply for a Customs Cleanse. This procedure will confirm whether the correct duty has been paid and the correct codes to use in the future. Find out more about Customs Cleanse here.

Apply for an EORI Number

Any business which trades with Europe or the UK also needs to apply for an Economic Operator Registration and Identification or EORI number. This is needed to trade legally with the European bloc.

Goods will be held at the border which will likely incur storage fees if the paperwork does not identify the EORI number. This must also be used whenever exchanging information with EU or UK Customs authorities.

UK businesses which are buying from an EU company will need to ensure that the European company has a valid EORI number. This can be checked online here.

This needs to be applied for from local national tax authorities in the country that either the goods will first arrive in (from outside EU) or where they originate from.

An importer of record is needed

An importer of record (IOR) is the business which has responsibility for all customs entry documentation and duty costs.

The European exporter will need to obtain an EORI number and a VAT number for the UK from the business that it is selling to.

Consider deferring VAT payments

Businesses can defer payment on imports with Postponed VAT Accounting (PVA) which will save them a significant outlay in their working capital.

VAT can usually be reclaimed by businesses but that means having to hold a lot of money in reserve to pay in the short term.

European businesses which are exporting will not need to apply for a PVA as VAT will only be payable in the importing country.

To use postponed VAT accounting UK businesses will need to register for the Customs Declaration Service (CDS) which has replaced the Customs Handling of Import and Export Freight (CHIEF) system.

Alternatively, a Freight company with a VAT deferment account can be used if the business does not wish to apply and administer one themselves.

When choosing a freight forwarder, it is important that one with a large enough deferment account is chosen as smaller companies will often reach their account limit very quickly if high value consignments are transported.

If the consignment is under bond then VAT will not need to be paid until it leaves the domestic bonded warehouse.

Baxter Freight has built a solid reputation on working around the hurdles of European imports to allow businesses to trade internationally in the most frictionless way possible.

We have a VAT deferment account which can be utilized by our customers and we are happy to deal with your business in either Euros or Sterling.

If you want to make your exports to the UK a reality then please get in touch with one of our experienced account managers immediately!

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