Brexit Preparation Guide (2) - Customs Export Declarations

On the 15th of August the Government released their policy paper 'Future Customs Arrangements: a future partnership paper' on proposed customs arrangements with the EU post-Brexit. They proposed a 'limited-time interim period' where both UK and EU business would benefit from time to fully implement the new customs arrangements, in order to avoid a cliff-edge.

The document identifies two broad approaches to a border with the EU, but there is very little of substance to help UK business plan ahead. The first approach 'a highly streamlined customs arrangement' involves utilising the UK’s existing third country processes (NES export declarations to HMRC) for UK-EU trade. The second approach 'a new customs partnership with the EU' would seek to align customs with the EU in a way that removes the need for a UK-EU customs border. This is qualified in the policy paper with the statement 'This is of course unprecedented as an approach and could be challenging to implement'.

On the surface, option one seems the most likely of these two options and would certainly be the fallback position, should the 'alignment approach' fail. Under this scenario port infrastructure would look to be improved for 'as frictionless a customs border as possible', but Export and Import goods would need to be declared to HMRC, as per current third country rules.

HMRC has estimated there are 192,000 exporters in the UK who ship goods to EU countries, but have never shipped outside the EU to third countries. If your company fits into this category, read the guide below to find what you would need to do to declare goods for export.

What is The National Export system (NES)?

NES is a computer based system which allows export declarations to be made electronically to HMRC. NES operates on another system called 'CHIEF' which controls and records all of the UK's international cargo movements. All export declarations must be submitted electronically to CHIEF, either yourself or an agent on your behalf.

There are pros and cons which need to be considered when deciding who would process your export declarations. If an agent or forwarder processes these of your behalf, this would generally cost between £25-£35 per consignment, but would not add as much administrative burden to the shipping department. If processing these yourself, there are some learnings required (which hopefully we will help with below), but you will have control over the content declared, meaning goods will less likely be held up at port. You will also receive progress reports from HMRC, enabling you to monitor when the goods arrive and depart port.

How do I register to use NES?

  • 2) EORI - Does you company have an Economic Operator Registration & Identification Number (EORI)?
    • Yes
      • Go to question 3
    • No - Apply for an EORI and VAT number on HMRC using the 'registered for VAT' form
      • Go to question 3
    • Unsure - Find out by checking on the EU's Europa website.
      • Go to question 3

  • 3) Role & Location - Does you company have a HMRC Role & Location for exporting?
    • Yes
      • Go to question 4
    • No - Use HMRC’s Form PA7 to apply for access to HRMC’s NES CHIEF Service. We recommend selecting all available routes (e-mail, XML and web routes) as this gives greater flexibility when choosing your software later.
      • Go to question 4

Essential Reading

Before choosing a software provider and trying to process a NES declaration, we recommend at least skimming through the following. If you need specific information later you will then know where to find it.

Getting setup with an NES capable system

NES declarations can be processed either through HMRC's web portal on the 'single window' or through a third party software provider. HMRC's system is free to use, but at the same time not easy to use or even understand, third party providers will change a small fee, usually per message.
Once you have identified a few potential providers, ask for a demo, which they will be happy to provide. From this you should be able to make an informed choice as to which suits you best.

Creating & Sending an Export Declaration

The data required for submission to HMRC is based on the SAD (Single Administrative Document) which you will likely have already come across in the shipping process. If you know the form well you may find entering the data relatively straight forward, if not, the most commonly required fields are listed below:

SAD Box 1 – Declaration
-Choose ‘EX’ for export shipments, see the tariff for other options.
-Choose ‘D’ for a full Declaration, see the tariff for other options.

SAD Box 2 – Consignor
-Enter your address and EORI number.

SAD Box 6 – Total Packages
-Enter the Total amount of packages you are declaring.

SAD Box 8 – Consignee
-Enter the address of the Consignee.

SAD Box 14 – Declarant/Representation
-Choose ‘1’ for direct representation unless you work for a separate company.

SAD Box 15 – Country of Despatch -Enter the iso country code of the destination country.

SAD Box 30 – Location of Goods
-Enter ‘GB’ plus the three digit port code (i.e. GBFXT) for the location where the goods can be inspected by HMRC, a full list of post codes can be found here.

Per Tariff/Commodity Code Data

SAD Box 31 – General Description
-Enter the general description of the goods or commodity.
-Enter the kind of packages (2 digit code, as listed here in the Tariff, Volume 3 i.e. CS = Cases and the marks on the packages.

SAD Box 33 – Commodity Code
-Enter the 8 digit classification code for your goods as set out in the UK Integrated Tariff online classification e.g.
22060051 – Other fermented beverages, Cider and Perry, 2ltrs or less
22060059 – Other fermented beverages , Other, Mixed Fruit & Rose
22060081 - Other fermented beverages , Cider and Perry, more than 2ltrs

-If unsure, HMRC have a classification service available on 01702 366077.

SAD Box 37 – Customs Procedure Code (CPC)
-Enter the 4 + 3 digit procedure code which describes the procedure under which the goods are being moved e.g.

Code1 Code2 Description
-1000 001 UK goods in free circulation.
-1007 001 UK produced whisk(e)y consigned to a non-EU country via another Member State.
-1007 002 Any excise goods (other than UK produced) removed from an excise warehouse for export to non-EU countries and/or special territories of the Community.
-1007 006 Exportation of Denatured Alcohol and UK-produced beer, wine, made-wine, cider and perry, ex licenced or registered premises.
-1007 014 Any excise goods (UK and Community produced) removed from an excise warehouse for export to non-EU countries and/or special territories of the Community.

-A full list of all available CPCs can be found here in the trade tariff
This appendix also details any special data requirement needed for that code.
SAD Box 40 – Summary previous document
-This is to specify which documents can be used as evidence if a check takes place, the code you entered into Box 37 will define the requirements, the input codes can be foundhere.

SAD Box 44 – Additional Information
-Dependent upon the Tariff Code and CPC used, you may be asked to provide specific data in this box, such as additional information statements (the format of these can be found here) and document codes (the format of these can be found here)
-If no specific data is requested a statement of ‘LIC99’ is often used to signify, no licenced required.

-To be sure you are in compliance, check any customs notices specific to your industry sector to be sure e.g. Notice 162 for wine production.

After the declaration

Once you have the export declaration accepted you will be given a unique 'NES Entry reference' and a 'MRN Number'. When your forwarder arrives at the port, they will scan in the UCR number of the shipment, at that point you receive an email from HMRC advising the goods have arrived at the port.

Feel free to contact us if you have any question on the NES process.


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