On January 1st, 2021 the United Kingdom officially left the European Union and hence the EU Customs Union and European Single Market after the transition phase. This means that the UK is now considered a third country in EU law, which influences the export of goods into EU member states.

The following article summarizes the changes that apply to you as a UK brand when trading with shops located in the EU. It can be used as a general overview of what you need to consider. However, please keep in mind that regulations differ between business sectors and products and that not all scenarios can be covered. Therefore, we highly recommend getting in touch with local authorities and tax consultants to ensure that you handle the regulations correctly in your particular case. Please also keep in mind that special regulations exist for the trade between the UK and Northern Ireland.

In general, the EU-UK Trade and Cooperation Agreement defines that no customs and quotas apply when trading between the EU and the UK. The rule, however, only refers to products which are originated or finalized in the UK or the EU. If an item is produced in a third country (e.g. a Yoga Shirt in Sri Lanka), quotas and customs might apply. You can find more information regarding particular regulations for different business sectors here.

The "Rule of Origin" means that you need to open up about your supply chains to prove the economic nationality of your products. This information should be provided on invoices and delivery notes to make sure that the customs procedure can be handled efficiently when exporting to the EU. If the needed information is not provided, goods might be returned to you which causes a significant prolongment of your shipping times.

The new agreement also goes along with changes in the VAT regulations. Exporting goods from the UK to the EU is handled such as normal trade between the UK and other third countries. Therefore, the zero-rated UK VAT applies both in B2C and B2B context. This means that UK VAT is technically not paid, but please keep in mind that your exports must still be listed in your VAT accounting and general book-keeping. You can find more information on the UK VAT regulations here. There might also be cases, in which it is required from the EU side to register for VAT when importing goods to member states. Your tax consultant will be able to give you more detailed information on whether this applies to your particular case.

Since the new regulations make trading between both regions more complicated, it is very important that you do some research and prepare the export so that no unplanned obstacles occur. There is plenty of information regarding BREXIT provided on both the website of the UK government and the Department of International Trade. Both websites can be a great starting point for your research. The following Checklist summarizes what you should consider when preparing your export:

Since there are many cases, in which the paperwork is complicated, it might be a good idea to hire a specialist (e.g. a freight forwarder or customs agent) who takes care of meeting the export regulations. This can ensure that you don't stumble over obstacles that could have been prevented and it helps you to focus on other strategic tasks (such as getting connected to new resellers). If you decide to make the declarations by yourself, you have to electronically register for the National Export System (NES) with the CHIEF access.

There might be particular regulations for your business sector and products that you should know of. Classify your goods and take a closer look at the different elements/ingredients to not face bad surprises (e.g. Are there nuts in your chocolate?). If possible, try to find the right commodity code to facilitate your customs procedure. The UK government also set up a database service for UK citizens to help you easily find the regulations that apply to you.

In some cases, you might need a license to export your goods into the EU. Make sure to apply for that license in time so that it is available once needed. Examples of business sectors in which licenses might be needed are the following:

Detailed information on the licenses that might be needed can be found here.

Even if customs don't apply, you will need for sure an EORI number (Economic Operators‘ Registration and Identification) that starts with 'GB' to export from the UK into the EU. If you want to export goods to Northern Ireland, you will need an EORI number that starts with 'XI'. You can easily apply for that number online and this will only take you a few minutes. Also, check whether VAT registration is required in your case.

In some rare cases, your customer will need an import license to receive your goods. Get in touch with them to check what is needed and make sure that the licenses are taken care of. It is also important that you clearly define who will take care of organizing the licenses so that no bad surprises come up when the products are shipped.

A crucial part of exporting to third countries is providing the right information once it is needed. Make sure that your invoice includes the proof of origin and that all needed documents (e.g. certificates/licenses) are shipped with the goods. Other things that need to be listed on your invoice include: Your EORI number, the EORI number of your customer, the VAT number (if needed), the customs code (if needed) and the price the goods are sold for. Also, make sure to keep your invoices for your book-keeping and customs paperwork.

We hope that this overview helps in organizing your tasks with regard to BREXIT. If you have further questions on how to handle the new export regulations, feel free to get in touch with a trusted consultant or government authorities. They will be able to give you detailed information on the regulations that apply to your particular products. Also, feel free to check out this PDF guide that the UK government published. It includes a helpful flow chart with information on how to handle your export step by step.