Exporting from the UK to the EU Post Brexit.
Here’s what you need to know, or setup, before exporting goods from the UK following our exit from the EU.
You’ll need a UK EORI number beginning with GB or XI to export goods out of the UK. But you’ll also need to know the EU EORI number for the European business you’re exporting to.
The importer in the EU will need to pay tax and duty on what you export to them. Therefore, it’s important to ensure you use the correct commodity codes.
As with importing, the government suggests you hire a freight forwarder, customs broker or fast parcel operator for making customs declarations. If making declarations yourself, you’ll need to register for and use the National Export System (NES), which will let you make declarations electronically. You’ll need what’s known as a CHIEF badge role.
Some goods require export licences, and there are additional rules specific to alcohol, tobacco and certain oils, and for controlled goods. You’ll need to ensure you have these in place prior to export.
Businesses should review the commercial terms of trade (Incoterms) in contracts relating to delivery of goods for those you export to. These will help you to understand who is responsible for customs duties, import VAT and any additional insurance and transportation costs.
Businesses can utilise commercial goods transportation services, which is certainly the easiest option, or opt to use their own transport.
Your customers in the EU may now have to pay tariffs when they import from you, when previously they didn’t need to do so. This will need to be part of your pricing calculations, and you might find it impacts demand.
You should discuss this issue with your clients so that it doesn’t come as a shock to them or cause their goods to be held in local customs.
VAT on exports:
VAT on export of goods:
As of 1 January 2021, when it comes to exporting goods to EU countries, the VAT situation also changes. Exports to EU countries are treated like those to non-EU countries, which is to say, they should be zero-rated for UK VAT.
This will apply regardless of whether you’re exporting goods to a consumer (B2C), or to a business (B2B).
This could mean businesses selling B2C to the EU need to register for EU VAT and appoint fiscal representatives depending on the requirements of the countries in which they sell.
VAT on sale of services:
When it comes to purchasing services, rather than goods cross-border, things continue much as they did before 1 January 2021.
Under the place of supply rules:
VAT on sale of digital services:
All sales of digital services are subject to tax in the country of the customer.
UK businesses that use the Mini One-Stop Shop (MOSS) system will need to register for the non-union MOSS and will no longer benefit from a €10k threshold before having to apply the place of supply rules.
This means many more businesses may be liable to VAT in the countries they sell digital services to and will need to register for non-union MOSS.
VAT will need to be charged at the rate applicable in the country of the customer.