On 24 December 2020, an agreement was reached between the European Union and the United Kingdom that governs future trade relations and will come into force provisionally on 1 January 2021. From 1 January 2021, the United Kingdom is no longer part of the EU single market and the EU customs union meaning customs or tax formalities will be required for goods – including those sent by post.
Managing these changes and integrating new systems will be challenging, however the Covid-19 pandemic has shown us that Deutsche Post DHL Group can adapt quickly and manage exceptional challenges. Through its global activity, Deutsche Post DHL Group is used to working through changing trade conditions and we look forward to supporting our customers’ cross-border business post Brexit.
As our own teams work through the detail of the deal, we’d like to confirm the essential requirements for shipping from 1 January 2021. These points of guidance are of an explanatory and illustrative nature. Legislation takes precedence over the content of this information and should always be consulted:
- Customs Declarations will be required from 1 January 2021 for shipments between Great Britain and the European Union (and vice-versa). Although the EU-UK Trade and Cooperation Agreement refers to 'zero tariffs' (zero customs duties), this doesn’t replace the need to generate a Customs Declaration and so a Commercial or Pro-forma Invoice is required. The trade deal only applies to Customs duties, meaning that in most cases Customs duties will not be applied to goods fulfilling all necessary "rules of origin" requirements. However, VAT will still be levied. Customs declarations are therefore required for goods to clear the border, as the UK will have left the single market and the customs union. Country-specific restrictions will still be in place and any associated licenses will also be required.
- Rules of Origin Requirements: In order to benefit from the EU-UK Trade Agreement 'zero tariff' (zero Customs duties), it’s essential that traders provide evidence of the country of origin. Traders need to check if their products comply with agreed Rules of Origin, Chapter 2 of the Agreement, and product specific rules of origin in the Annex. As indicated in the Section 2 of Chapter 2 of the Agreement, a claim for preferential treatment shall be based on 'a statement of origin' or 'the importer’s knowledge'.
Therefore, we recommend traders to review the Agreement and check if their goods comply with the rules of origin and, if so, the way to claim preferential treatment.
IMPORTANT: The goods Country of Origin must be calculated and recorded accurately, and it is the traders’ responsibility to do this.
- Changes to UK VAT regulations will still be introduced on 1 January 2021, as this regulatory change is not part of the EU-UK Trade and Cooperation Agreement, and applies to shipments being imported into the UK from any country worldwide. This means that most shipments valued at more than £135 will attract VAT on importation from any country, including the EU. For shipments with a value of £0-£135 when being sold by businesses to consumers in the UK, VAT will need to be collected at the point of sale and will therefore be the seller’s responsibility.
BREXIT TransitionUK Government - BREXIT Transition
How to Import/Export to/from UK, EORI Registration, Duty/VAT, Customs DeclarationHow to Import/Export to/from UK
Exporting Controlled Goods from 1 January 2021Exporting Controlled Goods from 1 January 2021Exporting Controlled Goods from 1 January 2021
Export Licences and Certificates from 1 January 2021Export Licences and Certificates from 1 January 2021
Changes to UK VAT Regulations for Overseas Goods Sold to Consumers from 1 January 2021Changes to UK VAT Regulations for Overseas Goods Sold to Consumers from 1 January 2021
Summary of the Agreement by UK Government as of 24 December 2020Summary of the Agreement by UK Government as of 24 December 2020
BREXIT Overview, Publications/News, EU-UK NegotiationsBREXIT Overview, Publications/News, EU-UK Negotiations
Draft EU-UK Trade and Cooperation AgreementDraft EU-UK Trade and Cooperation Agreement
Customs Guidance to the Agreement by European Commission as of 23 December 2020Customs Guidance to the Agreement by European Commission as of 23 December 2020