When you start exporting the procedures you will need to follow will depend on the type of product or service that you are selling as well as your customer's location.
The UK is no longer a member of the European Union and the way you trade with the EU has changed. The UK and EU have entered into a Trade and Co-operation Agreement and that means that there will be zero tariffs and zero quotas for goods exported to the EU provided the goods meet certain Rules of Origin requirements. You will also need to comply with customs arrangements and make customs declarations.
The VAT and excise rules that apply to goods coming into or leaving the UK from or to EU countries and non-EU countries are now the same.
2. Exporting goods
To export goods to countries outside the UK you need to submit an export declaration and may need an export licence. You might also have to pay customs duties and taxes in the destination country.
You need a commodity code for all exports. The code classifies your goods for duty, tax rates and regulations (e.g. licences). Find out more about the importance of classifying goods correctly and access guidance for classifying specific product types including, textiles, medicines, food, vehicles, computers and software.
Sometimes you might need a licence to export your goods. For example, agricultural goods or valuable antiques often need one. You will have to get the licence from the relevant government organisation. Read further guidance on export licenses. From 1 January 2021 this also applies to sales to the EU.
If you want to export goods, you or your representative must submit an electronic export declaration.
In order to do this, you will need an Economic Operator Registration and Identification (EORI) number and decide how you want to make customs declarations and whether you want to get someone to deal with customs for you.
Please note that from 30 November 2023, the Customs Declaration Service (CDS) will become the UK’s single customs platform, replacing the Customs Handling of Import and Export Freight (CHIEF) system for export declarations. All businesses will need to declare goods through CDS. Please refer to the UK Government’s notice advising export declarants how to prepare for CDS Customs Declaration Service - GOV.UK (www.gov.uk)
You can apply for simplified declaration procedures and for Authorised Economic Operator status. These are most suitable for businesses that export goods regularly.
Paying VAT on exports overseas
You can zero-rate most goods you export, but you must:
You need more detailed records if your customer collects the goods from you.
Paying duty on exports to third countries
Duty charges are set by the country you export to and depend on the type of goods, where they come from and their value. Responsibility for paying duty charges should be agreed in advance between you and your customer and confirmed by the use of the appropriate Incoterms®.
You might be able to claim duty charges and VAT back or delay payments for some imported goods that are then exported. This is called ‘duty relief’ and there are a number of schemes you can apply for.
Some countries have trade agreements with the UK that allow you to export at lower or zero duty rates. In these cases you must usually be able to prove where the goods originally come from. These are known as Rules of Origin.
3. Temporary export of goods
You may want to export goods temporarily from the UK. These could be commercial samples, goods that you want to exhibit or tools that you use in your trade.
There are two simplified procedures that you may be able to use to export goods temporarily from the UK, these are the ATA and CPD Carnets and the Duplicate List.
ATA (Admission Temporaire/Temporary Admission Carnet) and CPD (Carnet de Passages en Douane) carnets provide for goods/motor vehicles to be taken temporarily into or out of the UK for purposes such as exhibiting at a trade fair or taking part in a motor sport without having to complete the customs declarations and formalities normally required. Their use is not mandatory but where they’re available they simplify customs clearances in dispatching and receiving countries that are party to the ATA carnet or Istanbul Conventions.
ATA carnets are used to claim relief under temporary admission, from the customs charges normally due on importation for goods temporarily imported for use within the UK. They can also be used to temporarily export UK goods for a temporary admission use outside the UK provided those countries accept ATA carnets for the intended use - e.g. for professional equipment, exhibition goods, samples, music, film and theatre productions.
CPD carnets can be used for private or commercial motor and motor sport vehicles temporarily exported from the UK.
The Duplicate List can be used to temporarily export a limited range of goods, i.e. professional effects; works of art and other items only for exhibition, display or demonstration purposes; trade samples and trophies belonging to a recognised sporting association or organising body permanently established in the UK.
To be able to use the Duplicate List, the goods must travel with you as accompanied baggage. They must not be altered, processed or repaired when they are in a non-EU country. However, you can carry out running repairs to return the goods to their original condition.
Unlike the ATA Carnet, using the Duplicate List doesn’t simplify customs procedures in the destination country. So you will need to fill in the foreign customs import and re-export documentation and give any financial security that is required.
4. Exporting services
Service exports make up about a quarter of UK international trade. UK businesses are major exporters in sectors such as financial services and consulting.
International services can be provided from within the UK, e.g. using the internet, or in the customer’s country, e.g. making a personal visit. The difference can have important legal and tax consequences. The lack of a physical product also has important implications for contracts. You will not be able to use Incoterms® to formalise where the service will be delivered or who is responsible for insurance nor use payment methods such as Letters of Credit and Documentary Collection.
VAT rules for the export of services are determined by the place of supply of the service.
If you belong in the UK and the place of supply of your services is the UK, you must charge any UK VAT due and account for it to HMRC regardless of where your customer belongs.
Where the place of supply of your services is outside the UK, you should make sure that your records contain enough evidence that this is the case.
If the place of supply of your services is outside the UK you should not charge UK VAT but, as you may need to account for the local tax, you will need to consider the tax rules of the country into which you are making your supply.
There are different rules for some types of services including those supplied electronically. Find out more about how to determine the place of supply of your services and where the services are liable to VAT.
From 1 January 2021 you are no longer able to use VAT MOSS in the UK or sales of digital services to consumers in the EU. The place of supply will be where the consumer is located and you must either:
- register for the Non-Union VAT MOSS scheme in an EU member state, or
- register for VAT in each EU member state where you supply digital services to consumers