In summary:
- New Great Britain (GB) border arrangements have been confirmed for next year as the UK formally notifies the EU that it will neither accept nor seek any extension to the Transition Period
- Border controls for EU goods imported into GB will be introduced at the end of Transition Period in stages to give businesses affected by coronavirus more time to prepare
- New GB border infrastructure to carry out checks and £50 million of grants to accelerate growth of the UK’s current customs intermediaries’ sector.
New border controls and procedures have been confirmed for 2021, as the Chancellor of the Duchy of Lancaster, Michael Gove, formally notifies the EU that the UK will neither accept nor seek any extension to the Transition Period.
From 1 January, 2021, the UK will have the autonomy to introduce its own approach to goods imported to GB from the EU.
Recognising the impact of coronavirus on businesses’ ability to prepare, and following the announcement in February that the UK would implement full border controls on imports coming into GB from the EU, the UK has taken the decision to introduce the new border controls in three stages up until 1 July, 2021. This flexible and pragmatic approach will give industry extra time to make necessary arrangements. The stages are:
- 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, payments can be deferred until the customs declaration has been made. Businesses will also need to consider how they account for VAT on imported goods.
- 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.
The announcement follows the recent meeting of the Withdrawal Agreement Joint Committee – the last formal moment to agree an extension to the Transition Period – at which the government confirmed the long-standing position that no such extension would be sought.
A new £50 million support package will boost the capacity of the customs intermediary sector – including customs brokers, freight forwarders and express parcel operators – providing businesses with further support ahead of the new processes taking effect in July 2021. This funding will support intermediaries with recruitment, training and supplying IT equipment to help handle customs declarations. Rules will also be changed to remove barriers for intermediaries taking on new clients.
In total, the government has now provided £84 million to grow the customs intermediary sector to encompass EU trade after 2020.
Additionally, the government has committed to building new border facilities in GB for carrying out required checks, such as customs compliance, transit, and Sanitary and Phytosanitary (SPS) checks, as well as providing targeted support to ports to build new infrastructure. Where there is no space at ports for new infrastructure, the government will build new inland sites where these checks and other activities will take place. The government is consulting with ports across the UK to agree what infrastructure is required.
The Chancellor of the Duchy of Lancaster Michael Gove said: “We have informed the EU that we will not extend the Transition Period. The moment for extension has now passed. At the end of this year we will control our own laws and borders, which is why we are able to take the sovereign decision to introduce arrangements in a way that gives businesses impacted by coronavirus time to adjust.
“The announcement is an important step towards getting the country ready for the end of the Transition Period, but there is still more work to be done by both government and industry to ensure we are ready to seize the opportunities of being a fully independent United Kingdom.”
Elizabeth de Jong, policy director at the Freight Transport Association, added: “The logistics industry is extremely grateful for the measures announced by the UK government to stage the introduction of new trading arrangements between the EU and the UK in the first six months after the Transition Period. They have listened to our concerns and made allowances to enable our sector to recover from the COVID-19 pandemic and plan effectively so that we can continue to trade effectively with Europe.”
Richard Burnett, chief executive of the Road Haulage Association, said: “This is very welcome news and we are pleased the government has taken a sensible and pragmatic approach to the problem after listening to stakeholders such as the RHA.
“The government will continue to work closely with the border industry on these new procedures as well as other sector priorities. A border operating model will be published in July 2020.
“This approach is for GB/EU trade and does not apply to the flow of trade between Northern Ireland and Ireland, or between Northern Ireland and GB, which is covered by the Withdrawal Agreement.”
More detail on the stages:
From January 2021
Traders importing standard goods will need to prepare for basic customs requirements and will have up to six months to submit customs declarations to HMRC.
While tariffs will need to be paid on all imports from day one, payments can be deferred until the customs declaration has been made, giving traders time to adjust to the new requirements. Safety and security declarations will not be required for six months for all goods. Traders will, however, need to consider some other processes, such as how they will account for import VAT.
From July 2021
Traders moving all goods will have to make full declarations and pay tariffs at the point of importation. Full safety and security declarations will also be introduced.
You can read more about the measures here.
