Your Guide to the January 2022 Customs Changes
In January 2022, full customs declaration on goods imported from the EU into the UK will apply to businesses engaging in international trade. Several additional border requirements have been postponed until the middle of 2022 but you must understand how these changes are likely to impact you. While all measures are being taken to ensure disruption is kept to a minimum, with the current supply chain issues, the potential for the complication is significant. In this guide, we’ll cover everything you need to know for your business.
Changes Due in Jan 2022
- Goods imported from the EU can enter the UK without full customs paperwork ‘upfront’.
- Businesses can make customs declarations and pay applicable tariffs within 6 months of the point of import.
- Import VAT can be postponed for VAT-registered businesses.
- All customs declarations for goods imported from the UK will be required upfront.
- Applicable tariffs must be paid upfront.
- VAT-registered businesses can postpone VAT accounting to avoid Import VAT.
- Higher level physical checks on some goods.
In September 2021, it was announced that certain changes would be postponed to a later date. However, many of these apply solely to the agri-foods industry and include:
- 1st July 2022 – Additional grace periods to comply with requirements for:
- Safety and Security declaration for all goods
- Export health certificates for goods of animal origin
- Phytosanitary certificates for goods of plant origin
- 1st July 2022 – Equivalent grace period for the requirements of agri-food goods to undergo physical checks at Border Control Posts.
- 1st January 2022 – Requirement for pre-notification of agri-food imports.
- 1st January 2023 – Requirement for all relevant products to have new UK CA Safety Mark (instead of EU CE mark)
The Impact on Imports from EU
While staying as prepared as possible is the best way to deal with these changes, there is always a level of associated risk. In this situation, there is the worry that businesses may be unable to provide the right paperwork by the cut off point – Jan 2022. In this instance, the possibility that goods will be stuck in transit and unable to enter the country by the desired time, meaning a knock-on effect for companies already struggling through the supply chain issue.
In response to this, it has been estimated that UK businesses may look to stock up on their best selling lines. While reducing the risk of delays for their customers, this increases the chance of shortages with manufacturers. And, in total, acts to ignite the current challenges facing the UK and global chains too.
What Do You Need to Do?
With less than a month to go, it is important that you know what requirements exist on your side and how best to prepare for these changes.
Import Customs Declarations
For businesses dependant on EU customs, you should:
- Consider how your business will submit customs declarations and pay outstanding duties.
- Implement the support of an intermediary, such as a customs agent or freight forwarder to support.
- Consider the implementation of a ‘Simplified Declarations’ authorisation from the HMRC- (Note: This can take up to 60 days to gain authorisation so won’t be ready for the switch over on January 1st).
- Find the correct country code for the country of origin for your goods.
- Find the correct country code for the country of dispatch for your goods.
- Ensure customs declarations are correctly filled out to prevent delays during shipment.
Updated Border Controls
Goods moving from Great Britain and the EU will be under more stringent controls. Your goods must have:
- A valid declaration.
- Received customs clearance.
- Be submitted with an ‘arrived’ export declaration if moving through one of the border locations that use them.
Without these, they won’t be released to you once they have arrived. If the checks required cannot be carried out at the border, they may be moved to an Inland Border Facility. Working with an experienced freight forwarder is one of the best ways to check all paperwork is in order but ensure you understand who is responsible for making declarations going forward.
Postponed VAT Accounting
For VAT-registered importers, you are still able to postpone customs declarations where import VAT must be accounted for. To note whether there are any changes for your business with this process, speak to your freight forwarder.
Reduced Rate of Customs Duty
You may be eligible to qualify for reduced rates of Customs Duty. This is in accordance with the Trade and Cooperation Agreement (TCA). To qualify, the goods must:
- Originate from the EU if importing.
- Originate in the UK if exporting.
The term ‘originate’ refers to materials, parts of ingredients that have been produced or manufactured in said country. In order to make these savings on Customs Duty, you will need to supply either a Statement of Origin or approved knowledge from the importer of where the goods originate from. You may also need a Supplier Declaration to confirm the origin.
How Can You Prepare for Your Business?
On a practical level, the changes simply require you to get additional information for your shipments. As we mentioned above, enlisting the support of a freight forwarder is one of the easiest ways to support you through these changes. However, there are also things you can do to prepare your business in the run-up:
- Speak to your suppliers and ensure, where necessary, they can provide you with a Supplier Declaration and other required documentation to streamline the process.
- Consider ordering additional stock for the upcoming months. Take into account the increased warehouse usage during this busy period but also the expected length of supply chain issues. Consider outsourcing additional storage space or strategically increasing stock numbers for key items.
- Consider secondary suppliers, where possible, and those based within the UK too.
- Look into moving certain shipments and cargo to air freight alternatives to bypass the current backlog and container supply issues.
The changes may seem complicated by our team here at Radius Warehouse & Logistic Services are here to help. If you have any further questions or require additional support, please do get in contact here today.