Since the UK left the EU Customs Union in 2020, there have been many changes to UK customs procedures. A number of arrangements for trading with the EU are still in transition and are not yet aligned with the procedures for trading with the rest of the world.
Special arrangements have been agreed between the UK and the EU for the island of Ireland and there are no border controls in place between Northern Ireland and Eire. Northern Ireland (NI) is in the UK customs territory but has remained aligned with EU trade regulations. This means that there are special arrangements for moving goods from GB into NI as a declaration must be made and duties may be payable if the goods are at risk of entering the EU. At present, these arrangements only apply to freight movements into NI but, under the Windsor Framework, new procedures will come into effect in 2025 and parcels will need to be declared when they move from GB to NI.
The UK Global Tariff fixes duty rates between zero and 17% on most goods although higher rates of duty often apply to agricultural goods. These tariffs apply to imports from all countries except where preferential tariffs are agreed as part of a Free Trade Agreement.
Imports require a 10 digit tariff code and an 8 digit code is used for exports. The UK codes are still aligned to the EU commodity codes.
Imports will still require a 10 digit tariff code and an 8 digit code will be used for exports.
The UK has entered into many free trade agreements, the most significant one being the EU-UK Trade and Co-operation Agreement (TCA). Under a free trade agreement, goods that originate in one country (or group of countries) can be imported into the other contracting country (or countries) at preferential (often zero) tariffs. The details of when and how a product is deemed to originate in a country is contained within the agreement. The trade agreement will also set out the arrangements for evidencing that the goods originate in a county. As the arrangements vary from one agreement to another, traders should ensure that they are aware of the correct rules for claiming a preferential rate of duty from a specific country.
All UK import and export declarations are submitted to HMRC through the Customs Declaration Service (CDS). Even traders that use a customs agent to complete declarations on their behalf must sign up to CDS through the UK Government portal. In CDS, a trader can see details of any cash account or deferment account that he has with HMRC, he can retrieve his monthly Postponed VAT statements and, we believe in 2025, will be able to see details of the customs declarations that have been made to HMRC in his name (EORI).
The UK has a system of Postponed Import VAT Accounting (PIVA), whereby registered VAT traders can simply account for import VAT in their periodic returns rather than actually paying the tax at import. It applies to imports from all countries.
There is no pre-approval system for PIVA but traders must register on the HMRC CDS system to obtain their PIVA statements each month.
To recover import VAT paid, the goods must belong to the importer, and evidence of VAT paid or postponed must be held.
Low value consignment relief no longer applies and all goods are subject to import VAT, whatever their value.
Importers may wish to have a duty deferment account (DDA) with HMRC to delay the payment of any duty to HMRC until the middle of the month following importation (it can be used for import VAT and excise duty too). Provided a business is solvent and has no serious non-compliance issues, it may apply to have DDA of up to £10,000 a month without a financial guarantee. Traders that require a larger monthly deferment account limit will still need a financial guarantee for part or all of their deferment facility unless they are an Approved Economic Operator or can evidence to HMRC that they meet AEO standards.