As a member of the European Union, UK goods move freely between and through other member states without any formalities. As of 23:00 GMT on the 31st December 2020 freedom of movement will no longer apply and formalities will be necessary at the interface between the UK and the EU and across internal EU borders.
The EU single market and customs union means there are no trade or customs barriers between them, while maintaining a protective wall from imports outside the bloc.
This means that import/export procedures will have to be followed and certain documentation provided.
The UK has successfully negotiated membership of the Common Transit Convention (CTC) which allows some customs processes to be done away from the border.
Traders will only have to make customs declarations and pay import taxes and duties when the goods arrive at their final destination.
Traders exporting goods under transit need to provide a guarantee to cover any potential customs duties and import VAT. Businesses using transit should apply to be authorised to use Customs Comprehensive Guarantee (CCG) and once approved, obtain a guarantee from a bank or financial institution.
Although systems will be mainly paperless, the Transit Accompanying Document (TAD) must accompany the goods and be presented at any transit office and at the destination.
The TAD carries the Movement Reference Number (MRN) in both number and QR code form and the latter allows faster processing by barcode reader at transit offices.
The consignor of the goods will need to enter their TAD MRN to GVMS in place of an export declaration to complete their GMR as well as completing an EXS declaration.
Before a movement can start, an export declaration will need to be submitted as well as a transit declaration. Completing a transit declaration requires: the details of the planned journey for the goods, the guarantee reference number or details of the guarantee waiver and the local reference number. The master reference number from the export declaration and S&S declaration may also need to be included.
If the trader is an Authorised Consignor, after the movement is released to the Transit procedure the driver will be given a TAD and can then (and only then) proceed directly to the port of departure.
If the trader is not an Authorised Consignor, the driver will be given a Local Reference Number (LRN) and must then present the LRN and the goods at a nominated Office of Departure.
Release of the goods to the system will be completed there and the TAD will be issued, allowing the driver to proceed to the port.
On arrival, the TAD must be presented to the customs authorities in line with their procedures.
If the destination is the premises of an Authorised Consignee, the driver may proceed straight there and present the TAD to allow the transit procedure to be closed. Otherwise he/she must go via an Office of Destination for that to be done.
NOTE – THE TAD WILL APPLY TO ALL IMPORTS AND EXPORTS. MOVEMENTS BETWEEN THE EU AND UK WHEN MORE THAN ONE BORDER IS CROSSED DURING TRANSIT. THIS MUST BE RAISED IN ADVANCE OF THE TRANSPORT JOURNEY COMMENCING.
Failure to discharge the TAD will result in either the consignor or consignee becoming liable in full for the VAT and duty applicable to the consignment.
This is why the CCG authorisation is required to guarantee any payment due.
For more information please contact Jade Barrow or Andrew White who are leading our Brexit Task Team.