Getting ready for Brexit 1st January 2021.
There are a number of actions that businesses trading in goods between the U.K. and EU can be taking now to prepare for January 1, 2021 and the start of the U.K.’s new trading relationship. We fully expect delays at Dover during January and early February as teething issues are worked through.
If a business does not have an EORI number it will need to get one in place ASAP.
An EORI (Economic Operators Registration and Identification) number is an importer/exporter ID number.
Customs declarations will be mandatory.
There are some misunderstandings as to what the impact or benefit of a “deal” would be.
Import and export declarations will be required for trade in goods between the U.K. and EU. Once the Brexit transition period ends, the U.K. will be outside of the EU and will no longer be part of the Customs Union or Single Market. Goods that move into the U.K. from the EU after January 1, 2021 will be considered imports in place of an intra-EU acquisition. Import value-added tax (VAT) and customs duties will be payable and customs declarations will need to be made. If there is a “deal” it would likely alter the rate of duty payable on eligible goods but it would not remove the need for import and export declarations. If there is “no deal” duty will be at WTO levels. There will be charges associated with customs declarations (aka ‘clearance filing’ or ‘entries’).
European movements – practical advice from the start to all exporters/importers check list.
- Commercial Shipping invoices will be required for each shipment (eg. same as for exports to the USA or imports from China)
- For UK-EU movements a Shipper’s/Consignor’s Shipping invoice and packing list to be given at time booking to EFS (whether import or export), zero rated of VAT, HS code detailed per line item (commodity code dictates the duty level), incoterm and country of origin detailed.
- EORI# to be added to consignor and consignee address clearly and visible to aid smooth clearance (make sure you get this info from your suppliers and customers alike)
- Suggest regular importers from the EU through Dover ferry port look at acquiring their own deferment account to pay customs duty and import VAT for imports cleared through Dover. This is the most seemless payment mechanism whereby the importer can defer payment of duty and VAT to customs to the 15th of the following month from their deferment account linked to a trading bank account. The deferment account number is lodged against the clearance entry.
- Importer’s should consider Postponed VAT accounting for imports (see below).
Customs declarations & the need to raise commercial shipping invoices for exports will require shippers to adjust their sales admin processes as well as allow extra lead time for door to door transits.
For export shipments (road or express parcel courier) please provide your shipping paperwork at the time of booking transport to ensure an export customs entry (declaration aka EAD) is filed timely.
Import shipments & clearances.
Shipping documents must be given at time of booking & clearance instructions must be given to the clearance clerk. The declaration must be pre lodged before the vehicle leaves the EU ferry port. In practical terms our clearance team need copy of shipper’s EAD (with MRN barcode) plus the vehicle details (reg and trailer number and country of registration of the vehicle).
- Standard clearances. Import Duty and Import VAT payable immediately.
A full clearance at Dover for road arrivals whereby duty and import VAT are payable immediately at the border cleared against a deferment account. A charge will be levied for clearance filing. If shipments are cleared against the EFS deferment account because the importer (declarant) does not have one, import Duty and import VAT monies are required to be paid to EFS immediately and a fee will also be levied for use of the deferment account itself. New clients or high outlay amounts – until funds are received, delivery could be stopped which could also incur additional penalty charges in itself. Alternatively, importers can use their own deferment account, avoid delays, and defer payment of the duty until the 15th of the following month to customs as detailed earlier.
VAT registered businesses can choose to use postponed VAT accounting, see below.
Express parcel couriers (eg. DHL, Fedex..) will arrange clearance filing on arrival from Europe by air as they do already for international arrivals – their rates may increase to allow for clearance filing. They will contact the importer and have their own processes in place for deferment admin and associated charges and payment of import duty and VAT.
- Deferred Declarations & Simplified procedures. Import Duty and Import VAT can be deferred for up to 6 months.
An importer will firstly be required to obtain an authorisation from customs to be able to use this procedure in the form of a CFSP style authorisation. EFS will only use this clearance procedure for importers against written instructions from the importers CEO/MD/Owner and only using an importers own deferment account for the clearance. Postponed VAT accounting must be used. EFS will not allow this procedure to be used on its own deferment account. A charge will be levied for each part of clearance filing. EFS can raise front declarations to get goods cleared at the border (Dover) and also supplemental declarations (the actual clearance) , although will not be involved in any monitoring part.
Postponed import VAT accounting.
From January 1, 2021, import VAT will no longer be required to payable when goods enter into the U.K. Instead, postponed VAT accounting can apply to all goods imported by VAT registered importers to the U.K., including those from the EU. Under postponed accounting, import VAT will be declared and recovered on the VAT return rather than having to pay it upfront and then recover it later, which will lead to an improved cash flow position for businesses. No authorisation from customs is required to do this. Import declarants (UK importing businesses) will be required to give EFS written authorisation to arrange this on their behalf at the time of clearance declaration if this is the importers preference.
https://www.gov.uk/guidance/get-your-postponed-import-vat-statement
Deferment accounts.
Deferment accounts for duty may be beneficial for those importing on a regular basis from Europe. For most importers, a bank guarantee will not be required for deferred customs duty amounts below 10,000 pounds ($13,000) per month or if the business has Authorised Economic Operator (AEO) certification. Note that postponed import VAT accounting will mean that there is no need to include import VAT when considering the required level of deferment guarantee.
Duty levels by commodity (HS) code.
The U.K. has issued its own global customs tariff which is similar to, but different from, the EU Customs Union tariff. The U.K. Global Tariff can be accessed at https://www.gov.uk/check-tariffs-1-january-2021
https://www.trade-tariff.service.gov.uk/sections
Notice 252 – Valuation of goods for Imports for Customs – https://www.gov.uk/government/publications/notice-252-valuation-of-imported-goods-for-customs-purposes-vat-and-trade-statistics
July UK.GOV notice.
Rules of Origin.
https://www.gov.uk/government/publications/rules-of-origin-for-goods-moving-between-the-uk-and-eu
Incoterms: internationally recognised set of rules communicating obligations, costs, and risks associated with the transportation and delivery of goods between consignor and consignee. The most common for road shipments are EX WORKS (buyer arranges collection from the factory), DAP (door to door but the importer arranges clearance and duty) and DPP (the seller pays everything including duty in destination country).
Customs Freight Simplified Procedure (CFSP) is an electronic customs declaration for speeding up the importation of goods. … HMRC treat goods imported under CFSP in the same way as goods entered under the normal procedures.
Did you know ? EFS operates its own bonded warehouse facility as well as having access to an ERTS facility nearby.
V1 6/11/2020 adjustments may be made in due course.
V2 4/2/2021 adjustments made.
Streamlining Your Shipping Operations in 2023. BLOG
Streamlining Your Shipping Operations in 2023 Executive Freight Services Ltd April 26, 2023 2023 has seen the global economy continue to evolve, with customer expectations and technological advancements pushing businesses to adapt and innovate. In this fast-paced environment, streamlining shipping operations has become critical to maintaining a competitive edge. In this article, we explore the various strategies and technologies that can help businesses optimise their shipping processes, reduce costs, and improve customer satisfaction. Adopting Advanced Technology Solutions Automation and artificial intelligence (AI) are revolutionising the shipping industry, allowing businesses to reduce manual labour, increase efficiency, and enhance accuracy. From automating data entry to implementing robotic sorting systems, businesses can leverage these technologies to streamline their shipping operations. AI-powered predictive analytics can also help optimise shipping routes and schedules, ensuring timely delivery and reducing fuel consumption. The Power of IoT Devices and Real-Time Tracking The Internet of Things (IoT) has opened up new possibilities for shipping operations. IoT devices such as sensors, GPS trackers, and smart containers can provide real-time data on cargo location, temperature, and other vital parameters. This enables businesses to monitor their shipments closely, ensuring timely delivery and better managing potential issues. Real-time tracking also improves customer satisfaction by allowing them to track their orders with greater accuracy. Harnessing Blockchain Technology for Transparent Supply Chains Blockchain technology has the potential to transform shipping operations by providing a secure, decentralised, and transparent record of transactions. This can help streamline supply chains by enabling real-time data sharing, reducing paperwork, and minimising the risk of fraud. Blockchain can also facilitate better collaboration between different stakeholders in the shipping process, such as suppliers, carriers, and customers, ultimately improving efficiency and reducing costs. Optimising Packaging and Warehousing Strategies Eco-friendly packaging materials not only reduce environmental impact but can also lower shipping costs by minimising weight and volume. Lightweight materials such as recycled cardboard, biodegradable plastics, and plant-based packaging solutions can help businesses optimise their shipping processes while aligning with their sustainability goals. Utilising Smart Warehouse Solutions for Better Inventory Management Smart warehousing technology, such as automated storage and retrieval systems (AS/RS), can greatly improve inventory management and reduce the time it takes to prepare shipments. Integrating warehouse management systems (WMS) with IoT devices enables real-time monitoring of inventory levels and more efficient use of warehouse space, ultimately streamlining the shipping process. Implementing Just-in-Time (JIT) Shipping Strategies Just-in-Time (JIT) shipping strategies aim to minimise inventory levels by delivering goods only when they are needed. This approach can help businesses reduce warehousing costs, improve cash flow, and reduce the risk of stock obsolescence. To implement JIT shipping, businesses must closely collaborate with their suppliers and carriers to ensure timely and efficient deliveries. Admittedly JIT is susceptible to issues during pandemics and associated Worldwide shipping capacity constraints. Enhancing Your Shipping Network Establishing strong relationships with shipping providers can help businesses access better rates, faster delivery times, and more flexible options. By partnering with multiple providers, businesses can also minimise the risk of disruptions and ensure a more reliable shipping service. EFS itself works with multiple overseas partners playing each to their own individual strengths. Exploring Multimodal Transport Options Multimodal transport involves using multiple modes of transportation (e.g., road, rail, sea, and air) to optimise the shipping process. This approach can help businesses reduce costs, increase efficiency, and minimise the environmental impact of their shipping operations. By leveraging different transport modes, businesses can also better navigate potential disruptions and delays in the supply chain. Expanding Global Reach with International Shipping Networks As businesses expand their operations globally, having access to reliable international shipping networks is crucial. This allows businesses to reach new markets, meet customer demands, and capitalise on growth opportunities. To expand their global reach, businesses should explore partnerships with international carriers and logistics providers, invest in local distribution centres, and familiarise themselves with regional regulations and customs requirements. Ensuring Regulatory Compliance and Risk Management Complying with international trade regulations is essential for businesses involved in global shipping. Understanding and adhering to import and export rules, tariffs, and customs requirements can help minimise potential delays, fines, and legal issues. Businesses should invest in robust compliance management systems and seek the guidance of experts in international trade to navigate these complex regulations. Implementing Robust Cybersecurity Measures As shipping operations become more digitised, the risk of cyberattacks and data breaches increases. Implementing strong cybersecurity measures, such as encrypting sensitive data, conducting regular security audits, and training employees on best practices, can help protect businesses from potential threats and ensure the integrity of their shipping processes. Employing Insurance and Risk Mitigation Strategies Shipping operations can be subject to various risks, such as natural disasters, political unrest, and cargo theft. To mitigate these risks, businesses should invest in comprehensive insurance coverage, conduct regular risk assessments, and develop contingency plans to minimise the impact of disruptions on their shipping operations. Prioritising Sustainability and Environmental Responsibility As the shipping industry continues to face growing pressure to reduce its environmental impact, businesses should prioritise reducing their carbon footprint. This can be achieved by adopting eco-friendly packaging materials, optimising shipping routes, investing in energy-efficient vehicles, and exploring renewable energy solutions for transportation and warehousing. Adopting Circular Economy Principles in Logistics Embracing circular economy principles in logistics can help businesses reduce waste, extend the lifecycle of products, and minimise their environmental footprint. This can involve practices such as refurbishing and recycling products, adopting reusable packaging, and promoting the sharing of resources and assets across the supply chain. The Role of Green Shipping in Corporate Social Responsibility Green shipping initiatives can play a crucial role in a business’s corporate social responsibility (CSR) strategy. By prioritising sustainability, businesses can demonstrate their commitment to social and environmental responsibility, ultimately improving their reputation and fostering trust among customers, partners, and investors. Improving Customer Experience and Communication In today’s competitive market, meeting customer expectations is essential for success. Offering flexible shipping options, such as express delivery, in-store pickup, overseas warehousing and international shipping, can help businesses cater to diverse Read More
Are you an XI EORI number holder?
Are you an XI EORI number holder? HMRC has released an announcement related to changes to come that will affect businesses holding XI EORI number’s. UK Businesses moving goods into or out of Northern Ireland need an Economic Operator’s Registration Identification (EORI) number starting with XI (the “XI EORI”). In order to qualify for an XI EORI, businesses need a permanent business establishment in Northern Ireland. If a business does not have a permanent business establishment in Northern Ireland, they can still move goods into Northern Ireland or the EU as long as they are using an ‘indirect representative’ who meets the criteria. Businesses using TSS (trader support service) can continue to do so. A permanent business establishment definition : “a fixed place of business, where both the necessary human and technical resources are permanently present and through which a person’s customs-related operations are wholly or partly carried out”. Businesses that do not have a permanent business establishment in Northern Ireland may still be able to have an XI EORI to undertake limited customs activities within both Northern Ireland and the EU. Background of the XI EORI number Prior to the implementation of the Northern Ireland Protocol on January 1st 2021, as a factor of Brexit, aiming to minimise disruption, HMRC auto-allocated XI EORI numbers to UK businesses that they identified as operating in Northern Ireland. However, at that time HMRC were not able to ascertain whether those businesses with a GB address also had a permanent business establishment in Northern Ireland. Initially, any business registering for an XI EORI number with HMRC in early 2021, were not required to provide any information giving detail of whether they were a permanent business establishment in Northern Ireland, nor to provide a reason their business might need an XI EORI. Later amended in September 2021, all applications now require evidence of establishment or an allowable reason to hold an XI EORI number. What are HMRC now doing? HMRC are reviewing all businesses with an XI EORI number, and a GB address, to identify whether they have a permanent business establishment in Northern Ireland. If businesses do not have an establishment in Northern Ireland, HMRC will need to know if the business will still need their XI EORI number for specific activities. The scope of the validation and removal exercise relates to those XI EORIs that were issued between 1 January and 13 September 2021 and should bring those business in line with any who receive and XI EORI after September 2021. What are HMRC asking businesses to do? If a business has a permanent business establishment in Northern Ireland, HMRC will ask them to provide evidence of the business establishment, which they will be able to upload via an online form on Gov.uk. If a business does not have a permanent business establishment in Northern Ireland and does not have a need for their XI EORI they do not need to contact HMRC. HMRC will remove their XI EORI after 6 weeks from the date of the letter they are sent. Where a business does not have a permanent business establishment (PBE) in Northern Ireland, you will be asked to provide a reason why you need to keep their XI EORI. If HMRC do not hear from businesses within the timeframe they are given, HMRC will assume that they do not have a PBE in Northern Ireland and that they no longer require their XI EORI number. Timeline HMRC announced that they will be writing to businesses from Thursday 13 to Wednesday 26th April. Engagement with businesses is expected to continue into May, as HMRC processes the responses they receive. For more information about EORI numbers, their applicability and when you require once, please visit www.gov.uk/eori.
Innovations And Sustainability In the UK Freight Industry
March 9, 2023 While there’s no denying the environmental impact of freight transport, there are many innovations and initiatives that are helping to reduce its carbon footprint. In this blog post, we’ll take a look at some of these advances and discuss how they’re helping to make the industry more sustainable. The UK freight industry is a vital part of the country’s economy, providing essential services for businesses and consumers alike. It is also one of the most competitive and dynamic sectors, with new technologies and innovations helping to drive efficiency and sustainability. This blog will explore some of the key issues facing the industry today, from environmental challenges to government initiatives and innovative solutions. It will also look at some of the benefits of investing in greener technologies, data innovations, and smart logistics systems. By understanding these issues, companies can gain a competitive edge by adopting the latest technology and sustainable practices. Overview of the UK Freight Sector The UK Logistics sector is a vital part of the country’s non-financial business economy, contributing 10% to its overall GDP. Freight transport is a private sector activity that has wider economic, social and environmental impacts. Despite the pressures brought on by globalisation and technological advances, the UK freight and logistics industry is poised to grow at a CAGR of 2.5% by 2027. The Government has launched a new fund to help small to medium-sized businesses develop greener and more efficient solutions for freight transport, as well as investing in smarter logistics systems. As such, it is important for businesses to be aware of the current and developing strategic plans for the UK transport sector in order to benefit from these initiatives and create sustainable solutions for freight transport in the UK. Environmental Challenges Facing the Industry The freight industry in the UK faces numerous environmental challenges, including emissions from road freight, which account for 77% of overall emissions from transport in the UK. The sector is also responsible for a third of total emissions from transport. To address these issues, the government has implemented various initiatives to support SMEs in developing sustainable solutions. This includes investing in green financing solutions, efficient and sustainable innovation, design, procurement and maintenance techniques. Additionally, innovative technologies are being scaled up and rolled out across the industry to improve journey times and reduce emissions. Data innovations can also be used to tackle environmental issues such as pollution and congestion by providing insights into how operations can be optimized for sustainability. Investing in smart logistics systems can further enhance efficiency and help reduce environmental impacts. Government Initiatives to Support SMEs The UK Government is making a significant investment in support of SMEs to enhance the efficiency and sustainability of the freight industry. The freight innovation fund (FIF) provides £7 million in financial assistance for small and medium-sized enterprises to develop innovative approaches for reducing emissions and improving efficiency. This funding allows businesses to access the resources needed to explore new technologies, data solutions, and smart logistics systems for tackling environmental issues. It also provides a platform for businesses to collaborate and share their ideas, helping to create a more sustainable freight industry in the UK. Sustainable Solutions for Freight The £7 million fund launched to ‘green up’ the freight delivery process demonstrates the government’s commitment to making the UK freight industry more sustainable. The fund will be used to invest in innovative tech such as rail and smart logistics systems, with an aim to decarbonise freight and improve efficiency. Logistics UK supports projects like the Freight Portal, developed by the Energy Savings Trust, which has the potential to reduce emissions from freight transport. The investment in greener technologies will also create new jobs and help SMEs in the industry to become more competitive and efficient. Furthermore, data innovations such as telematics can be used to gain insights into transport patterns and identify areas for improvement that can reduce energy use and emissions. Investing in sustainable solutions for freight will not only benefit the environment but also create a more efficient, cost-effective supply chain. The Benefits of Investing in Greener Technologies Investing in greener technologies is essential for the UK freight industry to remain competitive and reduce its environmental impact. Government initiatives have been launched to support small to medium-sized businesses to develop more efficient solutions for freight. Freightliner has demonstrated their commitment by investing in increasing the sustainability of rail, including by co-firing fuels. Such investments are necessary for the UK’s drive for decarbonisation, and can lead to additional benefits, such as high knowledge spillovers from green innovation and enhanced technology diffusion. Investing in greener technologies also has the potential to identify green innovation priorities across the UK economy, with a particular focus on hard-to-reach sectors, such as road freight, buildings, and heavy industry. By investing in smart logistics systems, innovative technologies, and data innovations, businesses within the freight industry will be able to reduce their environmental impact while simultaneously increasing efficiency. Other solutions include new approaches for sharing data between different modes of freight transport, as well as investing in greener technologies such as renewable energy sources. Such initiatives are helping to improve the sustainability of the UK freight sector, while also increasing efficiency and reducing costs. Data Innovations for Tackling Environmental Issues Data innovations are becoming increasingly important in the freight industry. The government has launched a new fund to help small to medium-sized businesses to develop greener and more efficient solutions for freight. Digital Catapult is working with the manufacturing and creative industries to reduce their negative environmental impacts and reach net zero, while innovative partnerships are tackling environmental challenges in the water sector. Data innovations can help support these initiatives by providing more accurate information about environmental issues, such as climate change, depletion of natural resources, pollution of air, water and soils. They can also help businesses identify opportunities for improvement in their operations, such as developing smarter logistics systems or investing in technologies that promote sustainability. By harnessing the power of data, freight companies can ensure Read More
