Shipping to Europe after Brexit – A zero tariff, zero quota trade deal was approved on Christmas Eve 2020 by the UK and the European Union. The Trade and Cooperation agreement will provide zero tariffs and zero quotas on all goods that comply with the appropriate rules of origin.
However, as we already know, this does not mean things will continue the same as before Brexit. There have been changes to the way you can sell and ship your products to Europe as an e-commerce store. New trading conditions have begun with Brexit’s arrival on the 1st January 2021. These include the introduction of customs declarations and additional checks on food and livestock. You will also need to take note of the rules of origin also included in the terms of the deal.
This comprehensive guide will talk you through a lot of details for international shipping, and everything you need to know about shipping to Europe after Brexit. We’ll give you the lowdown on what’s going to change, following the EU exit. We’ll explain what processes businesses will need to put in place when shipping to Europe after Brexit, such as customs forms. We’ll also examine other considerations e-commerce businesses need to make such as communicating service changes to customers and suppliers, assigning responsibilities within the business and changes to VAT. We will also report on the measures that carriers such as DHL, FedEx, Royal Mail, Hermes and DPD are putting in place to prepare for Brexit.
In short, this guide has all the information you need to ensure you are as ready as possible to ship to Europe after Brexit.
- What are the responsibilities for UK businesses exporting to the EU?
- What is going to change with shipping to Europe from UK after Brexit?
- Changes with duties and taxes
- Customs duty and taxes when shipping between UK and Northern Ireland
- Changes in customs declarations after Brexit
- Shipping to Europe after Brexit: Delivery times
- How to Prepare for Brexit
- Brexit courier updates
Normally, the company or individual exporting from the UK to the EU is responsible for clearing goods outwards through UK customs. The customer is usually responsible for customs clearance and taxes overseas. This is dependent on the Incoterms relating to the product. We’ll cover more on that later.
Brexit is likely to create a number of significant impacts for businesses when shipping to Europe. Here are some of the key changes:
Prior to Brexit, all members of the EU can sell their goods freely anywhere within the EU without having to pay additional import taxes and duties. With the new tariff-free trade deal, there will be no newly imposed tariffs or duties. However, following Brexit, all UK businesses will need to ensure the following:
- They have the right procedures in place for dealing with customs.
- They are correctly managing EU VAT.
- To claim preferential duties, goods must comply with the rules of origin.
The rules of origin state that a product must be either wholly obtained from the UK or the EU – so entirely made in the UK or EU – or substantially transformed in such a way that value is added.
You will also need to provide a Proof of origin with your shipment to be able to claim the preferential rate of duty, or for customs to allocate the correct duty fees if the product originates from outside the UK and EU.
As part of the UK, Northern Ireland will be treated as being outside the EU after the 31 December. It will therefore be subject to dual VAT systems in Northern Ireland for both goods and services. In August 2020 the UK Government published policy papers outlining trade processes between Great Britain and Northern Ireland. These processes relate to the Northern Ireland Protocol under the UK/EU Withdrawal Agreement. Following Brexit, Northern Ireland will remain part of the UK customs territory and the UK government will need to honour the Northern Ireland Protocol under the UK/EU Withdrawal Agreement.
As Northern Ireland will remain part of the UK there will be no need for additional customs infrastructure in Northern Ireland itself or in ports in Great Britain that face Northern Ireland. The regime will remain within the administrative remit of the UK which will keep checks to a minimum. There will be no extra checks for goods leaving Great Britain for Northern Ireland. The current advice from the UK government is that no tariffs will be payable.
Whether a deal is reached or not, The Withdrawal Agreement and the Northern Ireland Protocol will continue to apply.
Under the Northern Ireland Protocol, the soft border between Northern Ireland and the Republic of Ireland will remain the same although EU customs duty and VAT requirements must be fulfilled on transit from Great Britain to Northern Ireland.
This applies to any goods which may be subject to onward movement from Northern Ireland to the EU, e.g through the Republic of Ireland. As the trade negotiations evolve we will learn more about how this will work in practice.
Post-Brexit, the processes for shipping between Great Britain and Northern Ireland will require a new administrative system.
This will likely include new electronic import declaration requirements and information on safety and security protocols. This system will be administered by HMRC and the Border Forces. The UK Government has set up a Trader Support Service to help businesses manage the process of moving goods between Great Britain and Northern Ireland.
A raft of changes in customs declarations will be required for trade between the UK and EU following Brexit. They are as follows:
- From January 1 2021, customs declarations will be required for imports from the EU and exports to the EU from the UK.
- Importers will be responsible for determining and communicating the state, the origin, classification and customs value of the goods they are importing from the UK to the EU.
- It will be possible to defer customs declarations on standard exported and imported goods for a period of up to six months.
- Businesses importing from the EU will need to account for and pay VAT on their goods. Businesses exporting to the EU will also need to appropriately handle VAT for those products.
- If importers are VAT-registered they will be able to use postponed VAT accounting. Importers who are not VAT-registered will have the same options to report and pay import VAT as they do for their customs duty.
- Proof of origin will be required to comply with the rules of origin and claim preferential duty rates.
- Safety and security declarations will be required for all exports and imports of goods between the UK and the EU from January 1 2021.
- Safety and security declarations on imports from the EU to the UK will be required from July 1 2021.
- Customs declarations will be required for controlled goods and excise goods. This includes all alcohol and tobacco products.
- Movements of high-risk live animals and plants will be subject to additional checks and there will be a pre-notification requirement for certain movements.
- From April 2021 products of animal origin, including meat, milk and egg products and all regulated plants and plant products will require pre-notification and health documentation. Any required physical checks will be conducted at the point of destination as opposed to a border control post until July 2021.
While the UK was part of the EU it enjoyed integration of freight regulation and documentary requirements. Put simply, this meant as an e-commerce store, you could sell your products to customers across the EU without the necessity of customs documents, charges, or the risk of authority delays. Following Brexit, transit times between the UK and the EU are likely to be impacted. It is currently unknown what the impacts will be but increased border checks and extra administrative processes are likely to result in slower delivery times.
Important note: in order to minimise the impact of slower transit times on your business, make sure you read the section on what you need to do before the UK leaves the EU later in this guide.
As we mentioned at the beginning of the guide, being prepared for the impact of the UK leaving the EU on your business’s shipping is vital. Here are some of the important tasks and activities you need to be thinking about, and actioning, to be in the best possible position after Brexit.
Understanding the customs forms you will need for shipping to Europe after Brexit is key to your success. Here is a rundown of the customs forms you will need to know.
It is wise to submit a Commercial Invoice when shipping to Europe after Brexit. A commercial invoice is a document that details the goods being shipped and their value. It is used to assess duties and taxes for customs processing and is a vital part of your shipping process as an e-commerce merchant. Visit the Sendcloud guide to Commercial Invoices to find out more.
CN22 and CN23
When shipping with a postal service, you will need to complete a customs declarations form (either CN22 or CN23) for goods sent to EU countries. For items with a value up to £270 use customs declaration CN22. For items with a value of over £270 use customs declaration CN23. Visit the Sendcloud guide to CN22 and CN23 customs declaration forms to find out more.
Prepare for shipping to Europe from UK after Brexit
As you have probably gathered, there is a fair bit to think about to prepare for shipping to Europe from UK after Brexit. But don’t worry, we’ve got your back! Here are some tasks, activities and things to consider to make sure your business is prepared.
Decide on how you will manage your customs processing following Brexit.
UK businesses have several options for managing customs processing after Brexit. They are as follows:
- Self-filing: Managing the declarations yourself
- Management by a freight forwarder: Using a freight forwarder to manage your customs declarations,
- Using a customs broker: Using a customs broker service to handle import and export filing.
- Using an Approved Economic Operator (AEO): This is a kitemark demonstrating that a party is an approved operator who could help businesses clear customs quicker and experience fewer hold-ups at ports.
If you choose the self-filing option you will be handling the export processes yourself. For smaller e-commerce businesses, this approach could prove complicated and time-consuming though if you are up for the challenge it could save you money. If you decide to self-file you will need to apply for an EORI number. There’s more on EORI numbers later on this guide. You will also be responsible for determining and communicating the commodity codes of your goods and finding out if there are any licence requirements you need to manage. You will need to apply and register on the National Export System (NES) which enables export declarations to be submitted electronically. You will also need to register with the Customs Handling of Import and Export Freight (CHIEF). This is the UK government’s current electronic system that handles customs declaration processes. Important note: CHIEF will be replaced by the government’s Custom Declaration Service (CDS) in the future.
The HS code system (Harmonised System) is a set of uniform codes used to identify products for import purposes. HS codes are recognised by most countries around the world, including all international retail markets. Getting to grips with them might seem intimidating at first, but for ambitious e-commerce merchants who want to grow their business globally, it’s well worth making the effort to understand them.
To complete an export declaration, you will need the commodity codes of the goods you wish to export. Understanding how to identify your goods within the HS code system is vital.
Using the wrong HS code or no code at all could result in delays or fines at customs. Or your goods might not get to their destination at all. However, there’s no need to worry. We’ve put together a complete guide to HS code for online retailers to help you get it right first time.
If you haven’t already, now is the time to register for an EORI number. EORI stands for Economic Operator Registration and Identification number.
Businesses that import or export to and from the EU are required to have an EORI number by the EU. If you already trade outside of the EU, you should have an EORI number. If you have only been trading within the EU so far, you will need to register for an EORI number.
In the event that the UK and EU don’t agree on a free trade agreement, both the party shipping and the party receiving goods will need to be EORI registered in their own countries. So, EU EORI numbers won’t be recognised in the UK and UK EORI numbers will not be recognised in the EU. This may also apply if a free trade agreement is implemented. This will depend on the terms of the agreement. You may also need an EORI to ship goods from Great Britain to Northern Ireland.
Applying for an EORI number only takes ten minutes on the UK government website.
Incoterms will play an important role for businesses shipping to Europe after Brexit. Even with a deal, Incoterms are still required to correctly handle the import VAT of the product being shipped.
Incoterms give instructions to customs about who is responsible for specific elements of the shipment such as insurance. They also give instructions about which party is paying insurance, customs, (and duties though these will not be necessary for shipping to Europe).
Once you have got a good understanding of the Incoterms relating to your products and shipments, it is vital you agree on these with your customers. Agreeing on Incoterms helps ensure there aren’t any misunderstandings that could result in delays in shipments or the wrong person paying fees, like the import VAT. It also helps build strong business relationships and demonstrates your professionalism and expertise. For more information on Incoterms check out the Sendcloud guide to Incoterms.
With Brexit, goods being sent from UK businesses will have a 0% UK VAT rate. However, this means VAT will be determined by the member state you are sending the goods to. Retailers sending goods to customers in the EU will need to be aware of the different rules in each member state about whether import VAT will be liable at the border or whether the accounting of it can be deferred to the importer’s quarterly return. You will also need Incoterms to determine the party (so you as the retailer or your customer) that is responsible to pay the import VAT. This is highly important to consider, and vital to communicate. Otherwise, you might end up facing either surprise costs, OR unhappy customers when they have surprise fees.
Communicate any changes in your shipping service to customers after Brexit
We are all waiting for news on the results of trade negotiations so your customers won’t expect you to have a definite strategy and process in place for shipping to Europe from the UK after Brexit. But it isn’t too early to start talking to them. Open a discussion about how things might change and new processes or activities you are considering. You could do this on a person-to-person basis, or via your marketing and communications i.e your website and newsletter.
Before you start communicating your plans, have a think about the following questions your customers might have to make sure your strategy is firm in your mind. You don’t want to confuse your customers, after all!
- Do your customers understand the impact that Brexit could have on you, and on them?
- Do your importers and customers have a good understanding of the requirements in their own country after December 31 2020?
- Do they know what their responsibilities are?
- Do they understand Incoterms and can you agree on the right ones to use?
- Are they aware of how import taxes might change and how much they will have to pay in different scenarios?
- Do they have an EU EORI number?
You should also be reviewing your current import and export procedures and working with your customers to minimise the possibility of delays. Shipping times could be impacted, at least in the short term, with the introduction of new border checks (not to mention the ongoing border restrictions the COVID prevention measures bring). Now is the time to discuss contingencies and expectations for this. And to communicate your intentions on your website and any other marketing channels.
Customers are likely to be much more sympathetic to delays after Brexit if they feel that you have done everything in your power to mitigate the impacts on them.
Increased bureaucracy is likely to be another unfortunate side effect of the EU exit. Even if you have been working with your customers for a long time, make sure you have all the right details for them and vice versa. You’ll probably be filling out a lot more important forms, including commercial invoices, so having the right physical address, contact details, email address and phone number could save you a lot of headaches in the future.
All shipping companies operating in the UK will be keeping a close eye on the progression of Brexit trade discussions. They will also be updating their customers regularly via their website and marketing communications. They will understand the need for e-commerce businesses to be as prepared as possible so, if you have any particular concerns in the run-up to Brexit that aren’t covered on their website, contact your account manager for more information. Here are some of the measures that some of the main UK shipping carriers have put in place to prepare for Brexit.
As a department of the UK Government, Royal Mail is working hard to mitigate its impact on service users. This includes all customers from occasional senders to business customers who require regular shipping to Europe. Due to Royal Mail’s proximity to the Government and in-depth knowledge of customs and processes, it is well-placed to deliver the smoothest possible transition of services.
Following the EU exit, Royal Mail’s service provision will depend on the outcomes of the UK’s trade negotiations. The Royal Mail is working closely with its supply chain to minimise impacts on customers.
DPD has been working hard to mitigate any impact of Brexit on its customers. DPD has been planning for all event scenarios. The shipping company focused primarily on a no-deal scenario which would have had the most significant impact on customers and services.
DPD has put the following new carrier measures and processes in place.
- DPD remains in a strong position to trade following Brexit. It maintains its AEO (Authorised Economic Operator) status. It is keeping a close eye on advice from government departments and adjusting its approach accordingly.
- DPD will ensure it communicates any increase in costs to customers prior to the date the UK leaves the EU. Please check their website for up-to-date information on prices.
- DPD has installed a dedicated Brexit transition team. The team will work across all aspects of Brexit-related operations throughout the peak period. This will help to minimise the impact on customers and services.
- DPD will collect customer’s packages in the same way
- DPD has developed its own clearance systems for packages. This approach should help smooth the shipping process from the UK to the EU until a customs border is in place.
- In order to mitigate the impact of service delays, DPD will be offering air services to customers who need faster deliveries.
- Brexit transit time on the DPD Road Classic service could be impacted. This is due to customs checks that will have to take place. Customers who require faster transit times can choose to ship with DPD Air Classic and DPD Air Express.
- There will be no impact on Rest of World returns. DPD offers returns from a variety of European destinations. It will continue to do so, post-Brexit.
- In order to avoid unnecessary delays with returns post-Brexit, DPD recommends supplying invoice data electronically via the EDI or API / Web shipping platforms.
- DPD’s Predict service will be available as normal following Brexit.
- There will be no change to how you track your DPD parcels.
- Following Brexit, the Republic of Ireland will still be a European state.
- DPD is looking into alternative processes for its Swap-It service. Please contact your account manager or check the DPD website for more information.
- There will be no impact on the Northern Ireland Next Day service.
Additional shipping services from DPD, post-Brexit
- DPD has established new direct line haul routes to Europe.
- The company has recruited a specialist team of Customs Brokers. It has also established the DPD Customs Academy to ensure staff have all necessary training.
- It has set up new customs warehouses in Athlone and Dublin. DPD’s Irish customs teams will be based at these sites.
- DPD has set up new customs warehouses in Northern Ireland.
FedEx is keeping abreast of potential impacts of the EU exit and how this will affect shipping to Europe from the UK. It is preparing to implement new services when required. FedEx has put a raft of guidance in place for customers relating to Brexit and their responsibilities. FedEx has also published some information about service expectations around the transition period. Naturally, the company is not in a position to offer firm assurances. It has promised to update customers as the situation progresses.
FedEx’s working assumptions for customers during the transition period are as follows:
- FedEx has set up a cross-functional working group to monitor developments and set up additional processes and contingency plans where possible. The company has planned for all eventualities and will continue to conduct impact assessments across all areas of the business as the situation evolves.
- FedEx maintains its Authorised Economic Operator (AEO) status. Shipping companies who hold AEO status may benefit from shipments being fast-tracked through customs controls. In addition, when customs select AEO shipments for examination or inspection they receive priority over non-AEOs.
- The company’s Global Clearance function has already prepared for the additional workload that is anticipated for processing import and export processing between the UK and the EU.
- FedEx is working on updates to its customer-facing technology to ensure it is ready to accommodate changes in shipment and customs data.
- FedEx has been engaging with Eurotunnel and the different ferry ports and operators to understand the options that are available. FedEx plans to mitigate any potential risk or impact on FedEx Economy or road shipments by spreading truck movements across multiple crossing points.
- In an effort to avoid delays at the Eurotunnel FedEx have the option of a direct crossing from France to Ireland.
- FedEx is considering adding additional air routes to facilitate express shipments.
- In principle, FedEx shipments that are created and sent on December 31 will already be in free circulation. These shipments will be treated as packages sent from the UK to the EU until they reach their destination.
- For Express and Economy shipments that are sent from the UK to the EU on December 31 and will arrive after this date, FedEx is working with the relevant authorities to ascertain how these shipments will be treated. FedEx will update customers as soon as they receive more information.
- The last day for FedEx Next Day Express or FedEx Priority Shipping that will not be in transit on December 31 will be December 30. Sending parcels by December 30 should remove the possibility of issues with customs clearance as any rule changes will not have been confirmed by either the UK or EU.
- For FedEx Economy, the last day for shipping before the UK leaves the EU will be December 29.
- FedEx recommend that all customers check their current transit times to and from the UK to get an understanding of any potential clearance issues. For example, if customers know that certain goods can get held up they should endeavour to send them as early as possible to avoid holdups.
Useful tools from FedEx and TNT for shipping to Europe from UK
FedEx and its partner, TNT, also offer a number of useful tools to help customers navigate shipping and customs processes between the UK and the EU. They are as follows.
- FedEx Global Trade Manager. Customers can use the FedEx Global Trade Manager to help streamline shipping processes from the UK to the EU. The tool can also help to facilitate the customs clearance process. FedEx Global Trade Manager is a web-based service and is available 24/7. FedEx Global Trade Manager can help you with the following:
- Locating and printing import and export documentation for more than 220 countries.
- Estimate duties and taxes and any other fees that may be levied against your international shipments.
- myTNT. myTNT is the quickest and easiest way for customers to send regular TNT shipments. Comprehensive account management is available on their website. This means you can keep an eye on all your shipments and documentation from one secure portal.
- TNT Express Connect. With TNT Express Connect customers can integrate TNT’s shipping services into their website and internal business applications. This saves customers time and resources and reduces the margin for error.
- TNT Express Manager. TNT Express Manager is great for high-volume shippers. It integrates with your own systems so you can consolidate shipments and save time on admin.
- Express Import. TNT Express Import is an online system that helps you streamline imports. You can use Express Import to get billing in your own currency and language for simple comparisons.
DHL is working hard to guide its customers through the transition period. It continues to engage with all relevant authorities to prepare itself for the effect of the EU exit on shipments and how its customers can continue shipping to Europe. Here are some of the new measures DHL has introduced to minimise the impact of Brexit on its shipping services.
- After January 1, 2021, packages that are sent using DHL’s Time Definite, Pre-9 and Pre-12 shipment services will be transported via air from and to the United Kingdom. If these services are used in conjunction with DHL’s Paperless Trade (PLT) services and DTP billing service, the company anticipates minimal impact on transit times.
- DHL has introduced an Easy Returns service. This service ensures that the customer’s returning goods re-enter the EU without payment of duties.
- Customers can avail of DHL’s Duty Taxes Paid (DTP) billing service. This means the shipper pays the VAT so your customer will enjoy transparent ‘all-in’ pricing and a better customer experience.
- Customers can use DHL Paperless Trade to create customs invoices online and transmit them electronically to DHL Express. This helps to speed up clearance at customs. It also saves you money on printing costs and is better for the environment.
- DHL has increased bond capacity across the UK and EU.
- The company has updated its IT and shipping tools to accommodate the new customs regulations and shipping processes.
- DHL has expanded its onshore and offshore customs brokerage to help it manage additional requirements from the UK exit.
- The company has recruited additional trained staff to manage increases in duty and VAT collections.
- DHL has put measures in place to mitigate issues with transportation permits that could result in delays.
- Due to the impact of increased costs and investment associated with Brexit, DHL has been forced to introduce a Brexit surcharge. The increased costs refer to changes in customs and import regulations. DHL’s Brexit surcharge applies from January 1 2021. It affects all dutiable import and export shipments between the EU and the UK, The surcharge has been set at € 0.25 per kg with a minimum amount of € 5 per shipment.
UPS has over 100 years of experience in international shipping. This makes it well-placed to manage any impacts of the EU exit. The company is working with all levels of government to ensure services run as smoothly as possible. Here are some of the new measures and services that UPS has put in place to prepare for the UK leaving the EU on December 31 2020.
- UPS has made a significant investment in its workforce, infrastructure and operational systems to prepare for the UK’s departure from the EU. The company has hired and trained new customs brokerage and operations employees.
- The UPS World Ease tools enable customers to consolidate multiple international shipments and process them as a single shipment. This helps simplify your paperwork, better manage the flow of goods and control costs. Customers can also access country-specific tariff codes to save even more time and hassle. UPS World Ease is available to customers using WorldShip shipping software, select vendor systems, or a host-to-host system. It can integrate with your own in-house systems, too.
- Customers can avail of UPS’ free TradeAbility tools to help streamline customs and shipping processes. The TradeAbility tool suite integrates easily with your own website using UPS’ API. TradeAbility features include:
- Estimate landed cost tool. This tool can predict your shipping costs including customs fees, and taxes. This means you can forecast net profitability, reduce returned orders and deliver better customer service.
- Denied Party Screener tool. Denied party screener helps customers understand complex regulations and compliance. Making sure you understand your responsibilities can save you time and money and demonstrates professionalism.
- International forms. As the name suggests, this tool saves you time when filling out international shipping documents and helps to ensure you are compliant.
- Harmoniser. This tool gives you accurate and up to date country-specific shipping codes.
- Import Compliance. The import compliance tool gives you comprehensive guidance on trade regulation procedures and restrictions, helping you stay compliant.
- UPS’ Paperless Invoice tool enables customers to upload invoices electronically. This environmentally-friendly solution helps speed the customs process by starting the clearance process before your goods even reach the border.
Now you’re ready for shipping to Europe after Brexit
We hope this guide to shipping Europe after Brexit has been useful. If you’re still feeling confused, please don’t worry – you’re definitely in good company! The EU exit is an unprecedented political and economic situation and is very likely to create a great deal of upheaval for businesses across the UK and Europe. Like all the important aspects of business, being prepared is absolutely key to your success. Try to prioritise taking some time over the coming weeks to read up on your responsibilities. Alongside this guide, you’ll find plenty of information on the UK government websites including a raft of videos and webinars so you needn’t get too overwhelmed with reading materials. You can also talk to your shipping provider directly about any specific queries or concerns that you have – they are there to help and are experts in their field.
Perhaps the first place to start is to simply get started. Easier to say, maybe, with the busy runup to Christmas and the complexity of international shipping. But often it is the prospect of getting to grips with challenges like the impact of Brexit on shipping that are worse than the actual work itself. Take time to do the all-important research. Ask for help when you need it. Accept that you can’t do everything yourself and try not to worry about all the unknowns. This is exactly what we are all doing, after all! From the smallest business to corporate giants, we are all pretty much in the dark until a trade deal is decided. Until then, prepare all you can, keep providing a great service to your valued customers and don’t forget to let us know how you get on.
Need help shipping to a particular country?
Check out the following guides for more specific advice on shipping to a particular nation: