How to avoid full duty on EU imports from 1st January

From 1st January, 2022, U.K. customs will be stricter on the rules of origin for EU shipments. This means that you are at risk of paying full duty on EU imports if your supplier is not up to date with the new legislation.

During 2021, you have been able to claim preferential origin on shipments from the EU using “importers knowledge”. You have been able to claim relief on EU imports so long as you have known, and been able to confirm, that the goods have originated in the EU.

This change in claiming preferential duty on EU imports is not the only change for the next phase of Brexit. Other changes coming in January, 2022, are:

Additional Port Health restrictions.

Goods Vehicle Movement Service (GVMS) requirements.

How to claim preferential duty on EU imports going forwards

In addition to using “importers knowledge”, many exporters have been using the Registered Exporter (REX) statement on their invoices to importers in the U.K. This has been used to claim preferential duty on EU imports, and will be the only accepted declaration of EU preferential origin on shipments over GBP5500/EUR6000 from 1st January 2021.

(Note that shipments worth less than GBP5500/EUR6000 only require a statement on the invoice that confirms the preferential origin is EU.)

Provided there is a REX number stated on your commercial invoice, your customs clearance agent in the U.K. will be able to process your declaration with preferential origin.

What your supplier needs to do

In order for you to claim preferential duty on EU imports from 1st January, your supplier must register to get a REX number. Your EU supplier can do this on the REX portal.

Once your supplier has a REX number, they need to put a clause for preferential origin on your commercial invoice. An example of this is as follows:

“The exporter of the products covered by this document
(customs authorisation N° **********) declares that, unless otherwise stated,
these products are goods of ** origin.”

What if I have no REX number on my invoice?

Even if your goods have originated in the EU, you will need to pay the full duty on your shipment if there is no REX number on your invoice.

If you have been using postponed VAT accounting, and paying 0% duty on EU imports, then you may not know that goods will not be released at the border until the duty and VAT are paid to customs.

Postponed VAT accounting will not be affected (although your VAT will be higher if duty is payable), but the requirement to pay duty may cause delays if you do not have a deferment account, or if you go over your agreed duty limit and need to pay by FAS transfer instead.

Any delays at the border could result in costs from your carrier or haulier so it is important for you to have a backup option for paying duty if your supplier has not prepared the REX statement on your commercial invoice.

U.K. exporters must also register

If you are exporting goods from the U.K. to the EU, then you must also register for a REX number. This is so that your customer in the EU can claim GB preferential origin.

Your commercial invoice will need to include the same type of clause as above:

“The exporter of the products covered by this document
(customs authorisation N° **********) declares that, unless otherwise stated,
these products are goods of ** origin.”

Do you need help preparing for the real Brexit?

We are here to help you prepare for January, 2022. If you need more advice on paying duty on EU imports, registering for REX or GVMS, port health requirements, or how to assess your supply chain, please contact one of our experts for assistance.