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border checks

The government is to introduce customs controls on goods entering Great Britain from the EU in three phases from the start of 2021, Cabinet minister Michael Gove confirmed this afternoon (Friday 12 June).

The move follows lobbying by sectors such as pharmaceutical and agriculture about the potential for import checks to compound the economic impact of coronavirus.

"This flexible and pragmatic approach will give industry the necessary time to make arrangements," the government said today.

The decision reverses the government’s announcement, made in February, that cross-border traders in the EU and Great Britain would have to submit customs declarations at the end of the transition period.

There is, however, still the likelihood of checks on goods going from the UK into the EU from 1 January 2021.

Three phases

Instead of full checks from 1 January 2021, a staged approach to customs declarations and checks will be introduced at Great Britain's main entry points for imports from the EU – regardless of whether the government strikes a trade deal with the EU by the end of this year.

Phase 1: from January 2021

Traders importing standard goods, covering everything from clothes to electronics, will need to prepare for basic customs requirements, such as keeping sufficient records of imported goods, and will have up to six months to complete customs declarations.

While tariffs will need to be paid on all imports, tariff payments can be deferred until the customs declaration has been made.

There will be checks on controlled goods like alcohol and tobacco.

Businesses will also need to consider how they account for VAT on imported goods.

There will also be physical checks at the point of destination or other approved premises on all high risk live animals and plants.

Phase 2: from April 2021

All products of animal origin (POAO) – for example meat, pet food, honey, milk or egg products – and all regulated plants and plant products will also require pre-notification and the relevant health documentation.

Phase 3: from July 2021

Traders moving all goods will have to make declarations at the point of importation and pay relevant tariffs.

Full safety and security declarations will be required, while for SPS commodities there will be an increase in physical checks and the taking of samples: checks for animals, plants and their products will now take place at GB Border Control Posts.

See the Daily Update on Monday 15 June for a detailed explanation of how this phased plan will affect importers.

Training still required

Marco Forgione, director general of the Institute of Export & International Trade, said that “any move to ease the potential delays at ports is to be welcomed”.

However, he added that:

" is essential that companies use the time now to acquire the skills and knowledge on customs declarations. Whether it is on 1 January or 1 June next year, companies need to be ready for customs requirements on both sides of the border for all trade with EU."

GDP record fall

The news comes as the UK’s GDP was revealed to have contracted by more than a fifth in April – as the economic lockdown took full shape.

The fall of 20.4% in GDP – the measure of national output and economic prosperity – is higher than expected and is the biggest single fall since records began in 1953.

“It was bound to be big and we made a conscious decision to do that [shut down the economy],” said Bridget Rosewell, a leading economist, on Radio 4’s Today programme this morning (Friday 12 June).