The Chancellor of the Exchequer Sajid Javid has said that the Government will reintroduce duty-free shopping with EU countries in the event the UK leaves the EU without a deal. This would mean that passengers travelling to EU countries would be able to buy beer, spirits, wine and tobacco without duty being applied in the UK.
According to HM Treasury, the decision to reintroduce duty-free shopping in UK ports, airports and international train stations would mean that:
- UK excise duty will no longer be due on alcohol and cigarettes bought when leaving the UK. A bottle of wine purchased in Heathrow duty free on the way to the EU could be up to £2.23 cheaper.
- At the point of leaving the EU, people can continue to purchase and bring home unlimited alcohol and cigarettes in Europe if they pay duty on it there – as is the case currently.
- People will now also have the alternative option to buy limited amounts of duty-free alcohol and cigarettes at duty free shops in Europe instead. For example, a holidaymaker could save more than £12 on two crates of beer.
- The travel industry has been calling on the Government to re-introduce duty-free, which stopped when the EU Single Market was introduced.
This change would entitle travellers leaving the UK to visit EU destinations to benefit from the duty-free prices currently available to those travelling to non-EU destinations. The Government has also confirmed that a consultation will be launched to examine its long-term duty-free policy.
There are special customs requirements for commercial goods or samples which are imported or exported by passengers in their accompanied baggage (hand carried) or in a small motor vehicle (carrying less than 9 passengers and weight 3.5 tonnes or less). This is known as Merchandise In Baggage or MIB.
MIB goods include the following:
- goods for commercial sale
- spare parts
- trade samples
whether or not they are:
- permanently imported/exported
- temporarily imported/exported
- in transit
- liable to customs charges
HMRC has announced how these rules will be applied in the EU if we have a no-deal Brexit. This will include the introduction of transitional simplified procedures for the import or export of goods valued at below £900 and weighing less than 1,000kg. This simplification will not apply to licensed, controlled, or excise goods. For all other goods a full declaration will be required before the goods enter or leave the UK.
The new Chancellor, Sajid Javid, has stepped up plans to help ensure businesses are ready to trade post-Brexit if the UK leaves the EU without a deal. If you trade goods with the EU then you will be responsible for making customs declarations, as is the case for businesses currently exporting goods outside the EU.
To do this, you must have a UK Economic Operator Registration and Identification (EORI). HMRC has been warning businesses for some time of the importance of obtaining an EORI number, but less than half of the businesses that need a number have applied for one.
Following the Chancellor’s intervention, HMRC has now started writing to businesses that have not yet applied for an EORI number. In these letters, HMRC is automatically allocating EORI numbers to some 88,000 businesses across the UK. If you have not yet applied for an EORI number, you should look out for a letter from HMRC allocating you an EORI number. All the letters from HMRC are expected to be sent by the end of the first week in September.
If the UK leaves the EU without a deal, you will need an EORI number to move goods into and out of the UK. This identification number will be required even if you use a customs agent to assist in making customs declarations.
If you deal with customs processes of EU Member States, you will also need to get an EU EORI number too. An EU EORI is valid across the entire EU, and you can get this from the EU member state you are trading with. If you have a subsidiary company that also trades goods with the EU, they will need to apply online for a UK EORI as these cannot be given automatically by HMRC.
Although we have a new Prime Minister, it would seem that so far nothing has changed to bring us any closer to a Brexit resolution. In fact, it appears that a no-deal Brexit is becoming more likely as we approach the 31 October deadline.
HMRC has published guidance on visiting the EU after 31 October 2019. They have said that there will be significant changes to the rules for EU travel if there is a no-deal Brexit. This would affect you if you visit the EU, Iceland, Liechtenstein, Norway or Switzerland from the time the UK is due to leave the EU at 23:00 GMT on 31 October 2019.
If you hold a British passport, you will need to ensure that your passport is valid for at least six months on the day you travel and be less than 10 years old (even if valid for more than 6 months). These rules will not apply for travel to Ireland, in this case you will be able to travel as long as your passport is valid for the length of your stay in Ireland. Even if there is a no deal, you will not need a visa for short trips according to European Commission proposals.
There will also be changes at border control.
- If there is a deal, there will be no changes to how you enter the EU or Iceland, Liechtenstein, Norway and Switzerland until at least 31 December 2020.
- If there is a no-deal Brexit, your EHIC card may not be valid and you must ensure that you have proper health insurance coverage. The EHIC card will remain valid if there is a deal and it will also apply in Iceland, Liechtenstein, Norway and Switzerland.
In the event of a no-deal exit, there will also be other immediate changes for visiting the EU including the rules for driving, pet travel and mobile data roaming.
If the UK leaves the EU without a deal, any UK business that exports goods to the EU will be responsible for making customs declarations (as is the case for businesses currently exporting goods outside the EU).
If you have clients that trade with the EU, you should check that they have a UK Economic Operator Registration and Identification (EORI) number. If they have not applied, it is important that they apply for an EORI number as soon as possible. If the UK leaves the EU without a deal, they will need an EORI number to move goods into and out of the UK. This identification number will be required even if your client appoints a customs agent to assist in making customs declarations.
An EORI application is made to HMRC and usually takes up to 3 days to be processed. UK EORI numbers start with the letters ‘GB’. Most are then followed by a 12-digit number based on the businesses VAT number. There is an EORI checker available to check EU-wide numbers on the Europa website.
Although the EU have now extended the deadline to agree the withdrawal agreement – to 31 October 2019 – there is still a chance we will exit with a no-deal outcome.
In a pamphlet recently published by the government we are provided with some important areas to consider if we leave the EU without a deal. For example, any UK business that imports or exports goods will be responsible for making customs declarations and businesses that trade with the EU should ensure they register for a UK Economic Operator Registration and Identification (EORI) number as soon as possible. This identification number will be required even if the business appoints a customs agent to assist in making customs declarations.
Some other areas that should also be considered as we prepare to leave the EU are also highlighted in the pamphlet, these include:
- Possible changes to the way in which personal data is handled if you transfer information into the UK.
- The possibility of new rules to be complied with if you provide services or operate in the EU.
- Manufacturers will need to be aware of regulatory requirements for UK and EU markets, including labelling, approvals and testing.
- No immediate action will be required if you employ EU citizens.
- The government has guaranteed any funding secured through EU programmes until the end of 2020.
- If you hold intellectual property, there may be changes that affect copyright, patents, designs and trade marks.