Navigating Post-Brexit Customs and Duties

Exporting or importing as a UK small business has changed dramatically since Brexit. Suddenly, customs declarations, tariffs, VAT, and a raft of new rules are on your shoulders. Get it wrong and you risk delays, penalties, or losing customers. This guide will walk you through every aspect of navigating post-Brexit customs and duties—so you can keep your goods moving, stay compliant, and protect your margins.

Since the UK left the EU's single market and customs union on 31 December 2020, the rules for trading goods between the UK and EU have changed fundamentally. Goods moving between the UK and EU are now treated as imports and exports, not internal movements. That means customs declarations, potential tariffs, and a host of regulatory checks now apply to almost all goods crossing the UK-EU border.

Customs processes are now managed under the UK's Global Tariff (UKGT) and the EU's Common External Tariff. The UK-EU Trade and Cooperation Agreement (TCA) provides for tariff-free, quota-free trade on most goods—but only if strict rules of origin are met. Many small businesses have been caught out by this, mistakenly assuming all goods will be tariff-free.

For non-EU trade, the UK has rolled over many EU trade agreements and negotiated new ones. However, each country or bloc may have its own requirements. Using the wrong codes, missing documents, or misunderstanding the requirements can result in delayed shipments, extra costs, or even seizure of goods. It's not just about paperwork—it's about understanding the risks and costs at every stage.

• Every shipment between GB and EU must be declared to HMRC and EU customs.
• Rules of origin must be documented to claim tariff-free status under the TCA.
• Northern Ireland is treated differently under the Windsor Framework—know the differences.
• Failing to comply can result in delays, fines, and loss of goods.

Customs declarations are now mandatory for all goods moving between the UK and EU (excluding personal items under certain thresholds). This applies whether you're sending goods to France or receiving supplies from Germany. Declarations must be lodged electronically using the Customs Declaration Service (CDS) for imports and exports, replacing the old CHIEF system.

For exports, you (or your freight forwarder/agent) must submit an export declaration to HMRC before goods leave the UK. For imports, you need an import declaration to release goods into the UK. You’ll need to provide commodity codes, values, origin, and supporting documents for each shipment. If you’re not familiar with these, you risk using the wrong codes and paying the wrong duties.

Most small businesses use a customs broker or freight forwarder to handle declarations, as the process is complex and mistakes are costly. However, you remain legally responsible for the accuracy of all information provided. It's essential to keep full records for at least six years to meet HMRC requirements.

• Register for an EORI number before making any customs declarations.
• Gather accurate product information (descriptions, codes, values, origin).
• Choose the correct Incoterms for your shipments.
• Retain all customs and shipping documents for HMRC compliance.

Tariffs and duties are taxes on imports and exports. Under the UK-EU Trade and Cooperation Agreement, most goods of UK or EU origin are tariff-free, but only if rules of origin are met and proven. If your goods don't qualify, or you can't provide evidence, tariffs based on the UK Global Tariff or EU Common External Tariff will apply—these can range from 0% to over 20% depending on the product.

VAT is also a critical consideration. UK import VAT (usually 20%) is payable on most goods imported from the EU, unless you use a VAT deferment scheme or import under the Postponed VAT Accounting (PVA) system. For exports, UK VAT is zero-rated, but your EU customers may have to pay import VAT and duties on arrival. This can cause confusion and issues with delivery if not made clear to customers.

You need to calculate landed costs carefully: this means product cost, shipping, insurance, tariffs, and VAT. Failing to factor in these costs can wipe out your margins or lead to unhappy customers when unexpected charges arise. The UK Trade Tariff tool and the EU TARIC database are essential resources for checking current rates and requirements.

• Check commodity codes for every product to determine the correct tariff.
• Gather proof of origin to claim tariff-free status.
• Understand VAT rules for both imports and exports, including PVA.
• Communicate landed costs to customers to avoid disputes.

Rules of origin determine whether your goods qualify for tariff-free status under the UK-EU Trade and Cooperation Agreement. Simply put, goods must be 'originating' in the UK or EU—meaning they are either wholly obtained or have undergone sufficient processing as defined by detailed rules for each product type. This is not always straightforward, especially for goods with components from multiple countries.

To claim zero tariffs, you must prove origin with appropriate documentation, such as a statement of origin on your invoice or long-term supplier declarations. If you can't meet or prove the rules, full tariffs apply. Many small businesses have been caught out by assuming goods assembled in the UK automatically qualify—if significant parts are imported from outside the EU/UK, this may not be the case.

HMRC and EU customs can audit your origin claims up to three years later, so you must keep detailed records. Incorrect claims can lead to backdated duties, penalties, and even bans on trading. The British Chambers of Commerce and the Institute of Export & International Trade offer guidance and training on navigating rules of origin.

• Check the product-specific rules of origin for every item you export.
• Keep supplier declarations and manufacturing records for at least 3 years.
• Include a valid statement of origin on your invoices for EU customers.
• Review your supply chain—imported components can affect origin status.

Delays at the border, unexpected charges, or rejected shipments can quickly damage your reputation and cashflow. Most issues are down to inaccurate paperwork, missing data, or misunderstanding the regulations. It's vital to get your customs compliance processes watertight—this means accurate declarations, correct codes, and robust record-keeping.

You must ensure all commercial invoices include complete descriptions, commodity codes, values, origin statements, and Incoterms. Labels and packaging must comply with both UK and EU standards. If your goods are subject to controls (e.g., food, chemicals, electronics), you may need additional licences or certificates. Non-compliance can lead to fines, goods being seized, or your business being flagged for future checks.

Small businesses often overlook the importance of coordinating with logistics partners. Ensure your carriers, customs brokers, and customers are all clear about who is responsible for each stage of the process. Clear communication reduces the risk of delays and disputes. Regular training and process reviews help keep your business compliant as rules evolve.

• Double-check all customs data before shipping.
• Use the correct Incoterms to clarify responsibilities.
• Ensure you have all necessary certificates and licences.
• Regularly audit your customs procedures for compliance.

Northern Ireland has a unique status under the Windsor Framework. Goods moving from Great Britain to Northern Ireland face different checks and requirements compared to other UK-EU trade. Most commercial goods moving into NI require declarations and may be subject to EU customs rules, though 'green lane' schemes exist for trusted traders. Failing to follow these rules can result in goods being delayed or impounded at entry points.

Controlled goods—such as food, animals, pharmaceuticals, chemicals, and certain electronics—require additional licences, certificates, or inspections. This can involve agencies like the Food Standards Agency, DEFRA, or the Health and Safety Executive. Failing to secure the right permissions can halt your shipments at the border and expose you to severe penalties.

Small parcels sent to consumers (B2C) within the EU are subject to new rules under the EU's Import One Stop Shop (IOSS) and VAT reforms. If you sell online, you may need to register for EU VAT and use the IOSS to collect and remit VAT at the point of sale. Not doing so risks parcels being held up, with customers being asked to pay extra charges on delivery.

• Check if your goods require special licences for NI/EU trade.
• Register for IOSS if selling B2C to EU consumers.
• Use the correct customs procedure codes for controlled goods.
• Consult specialist agencies for sector-specific requirements.

Brexit has introduced extra costs and cashflow challenges for small businesses trading with the EU. You now face customs brokerage fees, possible tariffs, import VAT, carrier surcharges, and administrative costs. These can significantly erode your profit margins if not properly accounted for in your pricing strategies.

Import VAT is often payable upfront when goods arrive in the UK. However, the Postponed VAT Accounting (PVA) scheme allows VAT-registered businesses to account for this on their next VAT return, rather than paying immediately at the border. This can ease cashflow, but requires accurate record-keeping and understanding of your VAT obligations.

You must also consider the impact on your customers. If you sell B2C to EU consumers, they may face unexpected charges on delivery—leading to complaints or returns. Clear communication about who pays what (using the right Incoterms) is critical. Many businesses have had to rethink their EU pricing or set up local fulfilment to stay competitive.

• Factor in all extra charges (broker fees, tariffs, VAT, surcharges) when pricing.
• Consider PVA to help with cashflow for import VAT.
• Be transparent with customers about delivery charges and duties.
• Review contracts and Incoterms for cost responsibilities.

Navigating post-Brexit customs and duties is complex, and mistakes can be costly. There are, however, a range of UK-specific resources and organisations that can help small businesses stay compliant and efficient. HMRC provides detailed guidance, webinars, and helplines for customs and VAT queries. The British Chambers of Commerce and Institute of Export & International Trade offer training, updates, and certification services.

For Northern Ireland, the Trader Support Service is a free government-backed scheme to help with declarations and compliance. Sector-specific agencies like DEFRA (agriculture, food, and animal products), the Health and Safety Executive (chemicals, electronics), and the Information Commissioner's Office (data) provide additional guidance for regulated goods. Many freight forwarders and customs brokers also offer consultancy and support services for a fee.

It’s worth investing in training for staff handling exports or imports, as the rules are still evolving. Regularly check GOV.UK for updates, and consider joining trade associations or forums for peer support. If you are unsure about a specific consignment, seek professional advice before shipping—it's cheaper than fixing mistakes after the fact.

• HMRC: Customs, VAT, and excise helplines and guidance.
• British Chambers of Commerce: Export documentation and training.
• Institute of Export & International Trade: Courses and advisory services.
• Trader Support Service: Free help for Northern Ireland trade.
• DEFRA, FSA, HSE: Sector-specific guidance and licensing.