Exporters – are you ready for the changes to the EU Customs Code?
UK exporters need to be ready for significant changes to the customs code coming into effect in just a few days on May 1st 2016. While some exporters will benefit from the changes, others will loose out and everyone involved in exporting will suffer increased costs and administration to make sure they are compliant.
With these changes there is significant scope for the unwary to find themselves on the wrong side of HMRC – for example, under existing rules UK businesses who accept goods into the UK for repair or upgrade use a simplified version of the existing Inward Processing scheme to handle shipments that are sent back to them by overseas clients. The old scheme did not require prior authorisation and could be used up to ten times per year without needing to provide guarantees for potential duty on the imported goods. Under the new Union Customs Code, those same businesses will have to provide mandatory guarantees for any duty owing and the scheme can only be used up to a maximum of three times per calendar year!
The likely cost of servicing the new guarantees is likely to be one-two percent per annum, not to mention the potential cashflow implications of having to lodge security/ collateral with the guarantor.
There are also significant changes to customs valuation as from April 1st customs duty will be charged on the last sale of goods before entry into the EU. This is likely to impact unfavorably on importers such as internet sellers who might use Amazon for example to fulfil from stock held in a customs warehouse.
The information for exporters is late in arriving and still far from complete, but for those effected updates can be found at.https://www.gov.uk/government/collections/customs-information-papers–2#customs-information-papers-2015