Customs Compliance Planning Considerations for Brexit: Is Your Business Ready?

The agreed transition period for the UK withdrawal from the EU single market and customs union expires on December 31, 2020. Once the transition period ends, a new relationship between the UK and the EU will commence and the UK will no longer apply EU law. New rules that affect businesses and citizens become effective on January 1, 2021.

From a customs perspective, the UK will no longer apply EU law to its imports and exports, and all shipments between the UK and EU member states and the UK and non-EU countries will be subject to UK import and export clearance requirements. Global traders should be aware of and understand the changes to the customs rules and procedures that will apply from 2021—including confirming the newly applicable UK Global Tariff (UKGT) code and duty rate, ascertaining which goods qualify under the UK’s free trade agreements and obtaining the appropriate UK business registrations to ensure readiness and avoid potential delays at the border.


On January 31, 2020, the UK formally left the EU after 47 years of membership. The EU-UK Withdrawal Agreement (Agreement), which entered into force on February 1, 2020, provides for a transition period for the UK withdrawal that expires on December 31, 2020, as well as a framework for the future relationship between the UK and the EU. The Agreement will effectively result in separate and distinct customs territories, impacting supply chains globally.

Notably, the  Agreement includes a protocol on Ireland and Northern Ireland that addresses the unique considerations of the Northern Ireland economy, which is largely dependent on small- and medium-sized businesses. Based on the protocol, EU customs duties will apply to goods entering Northern Ireland, while enabling Northern Ireland to maintain a soft border with Ireland and avoid customs duties on goods entering from the rest of the UK that are not deemed to be at risk of entering the EU single market. Necessary checks and controls will take place on goods entering Northern Island from the rest of the UK.

Post-Brexit Customs

Effective January 1, 2021, the UKGT will replace the EU Common External Tariff and apply to all UK imports from countries with World Trade Organization (WTO) Most Favored Nation status, unless the goods qualify for duty suspension under a free trade agreement or an approved customs program. Under the new simplified tariff regime, more than 13,000 tariff line variations have been eliminated. Additionally, tariff rates have been rounded down to standardized percentages and eliminated on a wide range of products including dishwashers, freezers and certain products used to support energy efficiency and sustainability. A UK government summary notes that 60% of trade with the UK will be duty-free under WTO and other UK duty preference agreements.

As of November 25, 2020, the UK had secured 24 free trade agreements with 53 countries and has ongoing engagement with more than 14 countries. Additionally, certain EU free circulation goods imported into the UK between January 1 and June 30, 2021 may be eligible for delayed declaration procedures that permit the entry of goods without advance authorization by up to six months.

Assess Your Brexit Readiness

Businesses may wish to review the following areas to assess their Brexit readiness in preparation for the impending changes:

  • Confirm product-specific licensing and import certificate requirements
  • Confirm the tariff classification code and duty rate under the UKGT
  • Assess duty suspension options
  • Check sales and international Incoterms to confirm obligations
  • Obtain a UK economic operators’ registration and identification number
  • Obtain UK VAT registration


How BDO can help

Customs duties, VAT and trade policy present unique challenges that businesses face when conducting regulated cross-border transactions. BDO’s Customs and International Trade Services practice can help businesses navigate the complex rules governing cross-border product movements to minimize duty and tax payments and maximize import and export compliance.
Our services include:

  • Tariff classification reviews
  • Free trade agreement qualification
  • Customs valuation and transfer pricing analysis
  • Import and export compliance assessments
  • Supply chain planning
  • Customs rulings, protests and other administrative filings
  • VAT registration


For more information about these and other trade developments, please contact a BDO Customs and International Trade Services professional.