Government’s post-transition border plan published today (13 July): 10 things traders need to know
13 July 2020
Posted by: William Barns-Graham
The government today (13 July) published its post-transition border plans for goods moving between the GB and EU and provided guidelines for how importers and exporters can prepare for new trade rules.
Cabinet minister Michael Gove, in announcing the publication today in parliament, said the plan would "assist the smooth movement of goods and will also help us to lay the foundations for the world’s most effective border by 2025".
The plan was a result of "extensive consultation and collaboration" with trade bodies, Gove said.
Fund for Border Operating Model
The paper follows the government’s announcement on Sunday 12 July that £705m will be spent on preparing England, Scotland and Wales for the new border operating model.
The funding will go towards new control posts, reinforce existing checkpoints, data infrastructure to improve the flow of traffic and people, and 500 extra staff for the UK’s Border Force.
Here are ten key takeaways from the government’s announcement today.
1. Get ready for customs declarations
Importers and exporters will need to complete customs declarations next year, regardless of whether the UK strikes a free trade deal with the EU.
To complete declarations, the government has asked businesses to ensure they:
- Have a GB economic Operator Registration and Identification number (EORI number)
- Decide if they will use a customs intermediary
- Have access to the relevant IT systems to complete declarations themselves
- Know the customs value and commodity code for their goods
- Consider simplifications and facilitations such as customs freight simplified procedures (CFSPs), warehousing, inward processing, and transit
The government continues to provide funding for companies to learn how to complete declarations, which can be used to cover the full cost of several courses run by the IOE&IT.
2. 3-phase plan for imports confirmed
The three-phase plan for introducing controls on imports, initially announced by Michael Gove in June, has been confirmed.
Under this plan, declarations can be deferred (for up to six months) for all imports of standard goods from the EU until July next year and will be introduced earlier in January for controlled goods such as alcohol and tobacco.
3. Import VAT
VAT will be levied on consignments of EU goods exceeding £135 in value following the same rates and structures as are applied for the Rest of the World imports.
VAT-registered importers will be able to use postponed VAT accounting and different rules will apply to consignments valued less than £135.
4. UK Global Tariff
Importers will need to pay customs duties as set under the new UK Global Tariff, which was announced in May.
Duty will need to be paid on the basis of the origin, classification and customs value of the imported goods.
Duty deferments options are available, and traders should note that any declarations for EU-to-GB trade which are deferred under the three stage import controls will also result in postponed payment of duty.
Should the UK agree a trade deal with the EU, this deal will determine the tariffs the UK will set for EU goods instead of the UK Global Tariff.
5. Export checks from January
The EU has said it will not replicate the UK’s phased plan, so declarations will be needed for exports from 1 January 2021.
Exporters can also also use the new ‘Check duties and customs procedures for export goods’ tool on gov.uk to identify what additional paperwork, tariffs and quotas are applicable
Businesses can also apply to HMRC for an advance ruling on the commodity code that should be used for their goods and the origin of their goods.
6. S&S declarations, sanitary and phytosanitary checks
Safety and Security declarations for EU-to-GB standard goods are not required until July 2021.
There will also be physical checks at the point of destination or other approved premises on all high-risk live animals (cows, pigs and sheep) and plants from January. Documentary checks will be carried out remotely.
Products of animal origin will require pre-notification of relevant health documentation from April.
Sanitary and phytosanitary checks on animals, plants and their products arriving from the EU will be completed at specified Border Control Posts (BCPs) from July.
7. ‘Pre-lodgement’ and ‘Temporary Storage’ models at ports
Border posts receiving goods from the EU will use one of two models:
- The traditional Temporary Storage model, where imported goods can be stored at the frontier for up to 90 days before being declared to customs
- The pre-lodgement model, where a customs declaration will be submitted in advance of boarding on the EU side.
A new Goods Vehicle Movement Services (GVMS) is being developed for the pre-lodgement model and will be used in Northern Ireland from 1 January and for imports to Great Britain from 1 January for transit movements and thereafter as checks are introduced, with full use in July.
Goods moving between GB, NI and onto the EU will be governed by the Northern Ireland Protocol and so are not subject to the same ‘Core Models’ as GB-EU trade.
9. New ‘Smart Freight Service’ for Ro-Ro export
Government is also looking to develop a new ‘Smart Freight Service’ (SFS) to support ‘Roll-on, Roll off’ (Ro-Ro) exports, to ensure goods needing to be transported quickly are not held up by additional checks.
‘Ro-Ro’ ferries allow for wheeled cargo carriers – such as trucks and vans – to drive on and off seamlessly and are vital for the quick transportation of perishable goods, including many food items and medicines.
10. Plans for Kent traffic
The government is working with the Kent Resilience Forum to explore making the use of the SFS enforceable in Kent, where there are concerns over traffic management at the start of next year when the new rules are introduced.
One option the paper says is being considered is fining HGV drivers in Kent who do not use the SFS, or who travel in contravention of advice from the SFS not to travel to the port.
The Guardian has reported that eleven hectares of land near Ashford have been bought to develop infrastructure to deal with the additional checks that will need to be made for goods going between the UK and EU.
In parliament today, responding to questions from Labour about new infrastructure, Gove said that he wished to “stress there are no plans to build a new lorry park in Dover".
The above is an initial interpretation of announcements today. A more in-depth analysis will be presented on a free IOE&IT webinar on Thursday morning. You can sign up to this webinar here.