Trading With UK

It is mandatory to be EORI registered to import and export goods between Ireland and Great Britain. All businesses and individuals based in the EU need an EORI number issued by the competent authorities in the EU to trade goods with countries outside the EU. In Ireland the competent authority is the Revenue Commissioners and you apply for an EU EORI number online with Revenue Online Service (ROS).

An EORI is a unique identification number that is linked to your company. It is used for customs procedures and on documentation that allows customs authorities to quickly identify your business. Once you receive your EORI number, Revenue will issue your Trader Account Number (TAN) that you can use to cover payment of import Taxes (i.e duty, VAT or excise duties if required.)

You will also need a GB EORI (EORI number issued by UK competent authorities i.e. HM Revenue Commissioners (HMRC) if you are responsible for making export declarations out of GB or import declarations into GB. If you have agreed with your customers in the UK to deliver the goods to them on DDP terms you will be responsible for making both export declarations to Irish Revenue and import declarations to UK HMRC. Sellers and buyers’ responsibilities are set out in your sale contract using Incoterms (see Customer Relationships chapter for more information on Incoterms).

If your business is UK VAT registered, you may have automatically received a UK EORI already.

 HMRC published step-by-step guidelines on preparing to import goods into Great Britain from the 1st of January 2021. It also released short explainer videos on import customs procedures from the 1st of January. This UK government tool can help you define what customs and VAT requirements are in place for specific products imported into Great Britain from the EU.

More guidance can be found here:

Brexit: guidance for businesses

https://www.gov.uk/guidance/help-and-support-if-your-business-trades-with-the-eu  

https://www.gov.uk/government/publications/hmrc-brexit-transition-communications-resources 

https://www.gov.uk/government/publications/guides-to-importing-and-exporting-goods-between-great-britain-and-the-eu 

The UK Government have introduced new customs formalities for imports into the UK with effect from 1 January 2021.

These are split into two types

1) Full Import/Export Declarations to be lodged with HMRC

2) Delayed Import Declarations: This can be availed of up to 1 January 2022 however supplementary declarations detailing imports need to be lodged with HMRC 175 days after your first import. See link here for further information.

The EU implemented the full requirements for Customs Declarations on Import/Export on 1 January 2021 with no simplifications or delays.

Customs declarations need to be lodged with HMRC by the Importing/Exporting business. In this regard businesses should conduct a cost analysis on whether to use a customs agent or manage customs procedures in-house by using specialised software and upskilling staff.

Customs agents or brokers can make all necessary customs declarations for your consignments, such as import and export declarations. This relieves the burden of customs paperwork from a business but can add significant costs. You are still required to provide relevant information to your broker to enable them to make declarations on your behalf.

For goods being traded across a customs border (e.g., from Ireland to Great Britain), it is necessary to classify those goods for customs purposes. Every product has a specific code.

Goods are classified according to globally observed rules which have been developed by the World Customs Organisation and which are provided for in EU legislation.

Classification codes are fundamental data elements that are included on documentation associated with trade. They are an unambiguous way of describing goods throughout the world in a way that transcends language. They also determine what measures are to be applied to goods when traded across a customs border. Such measures include, Rules Of Origin, Duty Rates, Quotas, Import Restrictions, Export Restrictions, Sanitary and Phytosanitary Considerations, Tariff Suspensions, etc.

The correct classification of goods is a fundamental aspect of good Customs compliance. An incorrect code may not be identified at the point of import but could be identified later during a post clearance Customs audit.

An incorrect code entered onto Customs documentation is a non-compliance and could result in penalties. Furthermore, the Customs Authority will insist upon the payment of any underpaid customs duties potentially going back over a period of 4 years. The importer bears sole responsibility for accurately assigning tariff codes.

Tariff Schedules

 Every Customs jurisdiction has its own Customs Tariff Schedule. For example, the EU tariff schedule is the Common Customs Tariff (CCT), the US tariff schedule is the Harmonised Tariff Schedule of the United States (HTSUS) and the UK tariff schedule is the UK Global Tariff Schedule (GTS).

 Goods being sent from Ireland to Great Britain will need to be classified to the 8-digit level in accordance with the EU’s CCT upon export and to the 10-digit level in accordance with the UK’s GTS upon import to GB.

It is necessary to refer to the appropriate tariff schedule because the structure of the various tariff schedules will not necessarily be the same from one jurisdiction to another.

Binding Tariff Information and Advanced Tariff Rulings

To get legally binding clarity on the classification of goods being imported or exported, a company can apply to Revenue to get a ruling known as a Binding Tariff Information (BTI). This is also possible in the UK by applying to HMRC for an Advanced Tariff Ruling (ATaR).

In the EU, BTIs can be issued by every EU member state and by the UK Customs Authority in the case of goods into and from Northern Ireland. Once issued, these rulings are binding. For example, in the Irish Customs Authority issues a BTI for a litre of full fat (3.5% fat) milk under CN code 0401 20 91, traders in every other EU member state trading this product must use the classification established for the existing BTI. This system ensures that all traders within the EU compete on a level playing field.

If you decide to manage customs in-house, you need to familiarise yourself with the various customs procedures, legal requirements and documentation. If you decide to use a customs agent, they can submit declarations on your behalf, but you still need to provide them with the right information. The following guidance is for businesses that are managing customs in-house, but all businesses should make themselves aware of the process.

It is important that you are aware that the increase in customs and controls resulting from Brexit will lead to increased costs for your business. The following actions can help you mitigate the impact of the cost implications of the customs and controls requirements:

• Have you mapped your supply chain and identified areas where cost-saving and time efficiency measures can be made?
• Have you considered the impact of customs compliance (including agents)?
• Have you considered the impact on cash flow from VAT?
• Have you ensured your business has applied for all relevant simplified procedures that may help ease the administrative or cost burden of customs?
• Have you decided whether it is more cost effective to use a customs agent to deal with customs or to invest in specialised software to manage customs in-house?

You can download a sample for proforma or commercial invoices here.