Brexit Guide

After a number of extensions, the UK left the European Union on 31st January 2020. A transition agreement was made, running until 31st December 2020, with new rules coming into effect on 1st January 2021. During this period, the UK and EU have been negotiating a trade deal. However, for UK e-commerce retailers selling to European consumers, there are implications for both importing and exporting goods whether a deal is struck or not.

The UK Government website provides clear and detailed guidelines on how to make sure you’re ready for the new rules. We’ve pulled out the key ways in which Brexit will affect your international shipments (exports).

INFO Our team has been working hard to ensure that all our customers selling into Europe can structure and store product data correctly, store company and tax registration data, and automatically create the required customs documentation.

We’ve been working with our carrier partners, so you can be confident that you will be providing the necessary information and paperwork for any international shipments to the EU. Even though Brexit officially happened on 1 January, 2021, we’ll continue to work closely with our shipping partners to adapt to the emerging requirements and carrier updates that will inevitably follow throughout 2021.

The UK Government website provides clear and detailed guidelines on how to make sure you’re ready for the new rules. We’ve pulled out three key ways in which Brexit will affect e-commerce exports and imports beginning in the new year.

The Brexit Deal

Brexit has reached a deal with the EU, and this changes some of the expectations around Brexit. While the deal covers tariff-free trade, there are still some new requirements.

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Key Takeaways

  • The deal isn’t final yet until it has been approved by both UK and EU parliaments. It has already been unanimously approved by the EU27 countries’ ambassadors.The EU parliament won’t reconvene until January to vote.
  • Customs declarations are still required when exporting out of the UK to the EU and Northern Ireland.
  • There are no tariffs or quotas when trading cross-border between the EU and the UK.
  • We’re operating under the assumption that EORI numbers will still be required when exporting to the EU27 and Northern Ireland.

Customs

The change in customs borders will impact rules and restrictions, tax and duty rates, and the import/export documentation required.

EORI Numbers

An Economic Operators Registration and Identification (EORI) number is required to ship goods from the UK as of 1 January, 2021. If you haven’t already, you need to register for an EORI number. Avalara VATlive reports that the HMRC has been automatically enrolling organisations they believe will need an EORI number. You should determine whether an EORI was generated for you or if you still need to apply.

Contact Avalara if you require help obtaining a GB or EU EORI. For Northern Ireland XI EORI, there is a separate process.

If you’re located in Great Britain, you should receive an EORI number that starts with GB.

If you’re moving goods to Northern Ireland or from Northern Ireland to any non-EU country (including GB), you need an additional EORI that starts with XI. You should also look into registering for the Trader Support Service that will assist you with all the changes.

Goods moving from Northern Ireland to and from the Republic of Ireland and the EU are treated as EU “intra-community”, and are not subject to duties.

Goods moving between Northern Ireland and Great Britain are treated as domestic shipments, despite requiring customs information.

INFO Remember, if you’re shipping to an EU business, you need to provide the EORI number of the recipient on the commercial invoice as well as the EORI number of the shipper.

Which EORI Number to Use

Use the chart below to see which EORI number is necessary when shipping goods. 3rd Country is defined as any country outside of the EU and the UK.

To GB To NI To EU To 3rd Country
From GB Domestic XI EORI
(Domestic)
GB EORI**
(conditional EU EORI)
GB EORI
From NI XI EORI
(Domestic)
Domestic Intra-Community XI EORI
From EU GB EORI Intra-Community Intra-Community EU EORI
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Shipments to or from Northern Ireland

Make sure to review EORI numbers above regarding a second EORI number starting with XI.

Northern Ireland will remain a member of the EU Customs Union, but will also remain part of the UK’s customs for goods only (See Brexit Northern Ireland 'XI' VAT and EORI number).

It is important to note, tariffs and duties should not be required for goods coming from Great Britain that are destined for Northern Ireland.

Tariff, Harmonisation, HS Codes

You will be required to provide Harmonised System (HS) Codes with your declarations. Any numbers provided that are inaccurate can lead to delays, fees, and inaccurate charges.

Beware that while HS Codes are recognised internationally, more specific categories differ by country. You should use an HS Code search that targets the UK.

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Commercial Invoices

When you create an international label with ShipEngine, we send your customs information to the shipping provider if they accept it. The provider then often uses this information to generate a commercial invoice, and sometimes declaration forms, necessary to facilitate getting your shipment through the customs agencies.

In some cases, like with DHL Express, we generate a commercial invoice as a PDF on your behalf and upload it to the DHL Express’s system.

If the shipping provider does not generate a commercial invoice, ShipEngine will generate one that you can send electronically to the carrier or print it and submit it manually.

When you create a shipment or a label in ShipEngine, you must provide the EORI number for both the sender and the recipient, if the recipient resides in the EU.

These invoice will be included in the response when you create a label in ShipEngine. Simply click the link to download it, then print the number of invoices specified by your carrier.

{
    "label_id": "se-1069782",
   "status": "completed",
    "shipment_id": "se-6524571",
    "ship_date": "2021-01-07T00:00:00Z",
    "created_at": "2021-01-07T22:18:28.8294434Z",
    "shipment_cost": {
        "currency": "usd",
        "amount": 118.39
    },
    "insurance_cost": {
        "currency": "usd",
        "amount": 0.0
    },
    "tracking_number": "1Z28A1R90407245273",
    "is_return_label": false,
    "rma_number": null,
    "is_international": true,
    "batch_id": "",
    "carrier_id": "se-96770",
    "service_code": "ups_worldwide_saver",
    "package_code": "package",
    "voided": false,
    "voided_at": null,
    "label_format": "pdf",
    "display_scheme": "label",
    "label_layout": "4x6",
    "trackable": true,
    "label_image_id": null,
    "carrier_code": "ups",
    "tracking_status": "in_transit",
    "label_download": {
        "pdf": "https://api.shipengine.com/v1/downloads/0/O9yoWlgNOUipKf4U5EE3Ww/label-1069782.pdf",
        "png": "https://api.shipengine.com/v1/downloads/0/O9yoWlgNOUipKf4U5EE3Ww/label-1069782.png",
        "zpl": "https://api.shipengine.com/v1/downloads/0/O9yoWlgNOUipKf4U5EE3Ww/label-1069782.zpl",
        "href": "https://api.shipengine.com/v1/downloads/0/O9yoWlgNOUipKf4U5EE3Ww/label-1069782.pdf"
    },
    "form_download": {
        "href": "https://api.shipengine.com/v1/downloads/0/puITpQ5ip0O6uwvVRZxyRg/form-1069782.pdf"
    },
    "insurance_claim": null,
    "packages": [
        {
            "package_code": "package",
            "weight": {
                "value": 1.00,
                "unit": "ounce"
            },
            "dimensions": {
                "unit": "inch",
                "length": 0.0,
                "width": 0.0,
                "height": 0.0
            },
            "insured_value": {
                "currency": "usd",
                "amount": 0.00
            },
            "tracking_number": "1Z28A1R90407245273",
            "label_messages": {
                "reference1": null,
                "reference2": null,
                "reference3": null
            },
            "external_package_id": null
        }
    ],
    "charge_event": "carrier_default"
}

CN22 & CN23 Customs Forms

As of 31 December, 2020, CN22 and CN23 customs forms are required for shipments to the EU. These forms are only required for international postal shipments.

TIP A CN23 can be substituted for a CN22, but not the other way around.

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Difference Between Commercial Invoices and CN22/23

While both document types contain similar information, a commercial invoice details the agreement between the shipper and receiver, and CN22/23 forms do not. The agreement details include who’s responsible for the shipment as well as the duties and taxes and whether or not they’ve already been paid.

Customs Declarations

ShipEngine already supports shipping internationally, including handling customs declarations.

A phone number or email for the buyer, also known as the consignee, is required. You should include this in the ship to information when you create a shipment in ShipEngine.

If shipping to a business, you may now provide the VAT number for the recipient. This may speed up the customs clearance process as well.

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VAT

As the UK leaves the EU, there are some changes to the treatment of VAT and tax when trading with consumers in the EU member states, and your obligations changed on 1st January 2021.

VAT Numbers in EU27 Countries

Based on the value of goods sold in specific member states in the EU, you may be required to register for a VAT number in the member country. We recommend using Avalara’s free VAT Risk Assessment tool to find out.

Incoterms (DDP & DDU/DAP)

For many carriers, ShipEngine supports Delivered Duty Paid (DDP). When a shipment is shipped as DDP, the shipper is responsible for the shipment and for paying the taxes associated with the shipment.

The opposite is Delivered Duty Unpaid (DDU) or Delivered at Place (DAP). In this scenario, the shipper is responsible for the transportation costs, but not responsible for paying the taxes associated with this shipment. Customs agents will be using the contact information provided on the invoice and customs declarations to settle the charges.

New Requirements from Marketplaces

Many marketplaces, including Amazon and eBay, will be collecting duties and taxes upfront from buyers for shipments that will originate in the UK and have a EU27 destination. You will need to send these goods as DDP.

Helpful Links

Using Tax Identifiers in ShipEngine

ShipEngine supports setting multiple types of tax identifiers. Set your identifiers using the Tax Identifiers Object when you create a shipment.

Shipping & Fulfillment

Shipping Carriers

We recommend that you contact your ShipEngine manager about the shipping carriers you use and make sure they have your VAT and EORI numbers on file for each. This process can help if you do not include a tax identification number when creating a shipment, and can also ease the carrier’s ability to help you clear customs with less risk of contacting you.

We’ve included links with each carrier to give you quick access to the same information we’re working with at ShipEngine.

Royal Mail

Royal Mail

ShipEngine licenses Intersoft’s Royal Mail integration to deliver Royal Mail shipping services. We’ve added support for DDP for our Royal Mail integration.

Checklist for International Shipments
  • The CN23 form is provided by Royal Mail and returned automatically since 31 December, 2020.
  • A commercial invoice will be generated by the provider. Please include this invoice in your shipment.
  • DDP is supported.
Helpful Links
UPS

UPS

EIORI is not stored in an explicit property like VAT, but ShipEngine will include this information on the generated commercial invoice notes.

Electronic submission for customs forms with UPS must be enabled; this feature is not on by default. You can enable this by following the UPS Paperless Invoice guide.

Checklist for International Shipments
  • Include a commercial invoice with your shipment in triplicate, if you do not have electronic submission enabled.
  • DDP is supported
Helpful Links
FedEx

FedEx

ShipEngine will send the EORI and VAT numbers you’ve provided when creating your shipment. FedEx will use this information to electronically transmit customs and declaration information.

Checklist for International Shipments
  • Commercial Invoices are automatically generated by FedEx and sent electronically if supported by the destination country.
  • DDP is supported.
  • Customs information will not be sent electronically when shipping from Great Britain to Northern Ireland.
Helpful Links
Hermes

Hermes

Hermes does not support electronic documents for commercial invoices. ShipEngine will generate commercial invoices for Hermes automatically so you can print them out and include them with your shipments.

Checklist for Northern IrelandShipments
  • Include three copies of the commercial invoice with your shipment.
Helpful Links
DHL Express

DHL Express

When creating labels with DHL Express, include your federal tax ID and your EORI number for the shipper. Any additional tax identifiers will be included on the commercial invoice we transmit electronically to DHL Express.

Checklist for International Shipments
  • ShipEngine generates a commercial invoice for you and uploads this to DHL Express. You may also include a copy in your shipment.
  • DDP is supported.
Helpful Links
DPD

DPD

Delivered Duty Paid (DDP) will not accept paper commercial invoices. ShipEngine will pass the customs information to DPD and this information will be electronically generated.

Initially, DPD will import via certain hubs, and therefore parcels will be charged VAT based on their clearance hubs when shipping from Great Britain.

  • NL Clearance Hub - Netherlands, Belgium, Luxembourg, Poland, Germany, Norway, Denmark, Sweden, Finland
  • FR Clearance Hub - France, Portugal, Italy, Czech Republic, Hungary, Slovenia, Slovakia, Romania, Latvia, Lithuania, Estonia, Greece, Bulgaria, Austria, Croatia
  • ES Clearance Hub - Spain only
  • IE Clearance Hub - Republic of Ireland only
Checklist for International Shipments
  • No need to print a commercial invoice, this is managed electronically.
  • DDP is supported.
Helpful Links
Parcelforce

Parcelforce

Parcelforce will start supporting Delivered Duty Unpaid (DDU) services via the euroEconomy service. Additionally, we will start providing you with all necessary forms for Parcelforce. Please make sure these are included with your shipment.

Only EPH Parcelforce services require a CN23 form. EPB and EPP only require a commercial invoice.

Checklist for International Shipments
  • ShipEngine will return a CN23 form that Parcelforce generates from your customs information.
  • ShipEngine will return a commercial invoice that Parcelforce generates when you create a shipment. You should print three and include them in your shipment.
Helpful Links
Amazon Shipping UK

Amazon Shipping UK

Amazon Shipping is suspending support from Great Britain origin packages with a Northern Ireland destination. Amazon hopes to reinstate this service, at some point in the future.

SEKO

SEKO

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Landmark Global

Landmark Global

Landmark will allow you to add an EORI number to your account, but you must contact your account manager to enable this. Additionally, Landmark is making updates to allow us to pass the tax identifiers on a per request basis using the “vendor business number”.

Landmark does not support the generation of commercial invoices via their API. ShipEngine will provide you with a commercial invoice. Please include this in your shipment.

Checklist for International Shipments
  • Print the generated commercial invoice, and include three copies in your shipment.
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Fulfillment Providers (3PL)

If you’re currently using a third party fulfillment partner (3PL) or thinking of partnering with a 3PL in the future to manage your pick, pack, and dispatch processes, the customs and VAT changes we highlighted earlier will also affect your processes and obligations with 3PL partners as of 1st January 2021.

If you’re not holding inventory outside of the UK, consider locating inventory in the EU to be closer to your customer (we have partners who can help).

Amazon FBA

With the new trade agreement, you can no longer send inventory to Amazon Fulfilment Centers in the UK to distribute inventory to fulfill EU orders. You must export inventory to one of the Amazon European fulfillment centres. Look out for promotions from Amazon that are offering to help reduce the costs of transporting goods to European fulfillment centers.

Amazon fulfillment may block you from the Amazon FBA program if specific steps haven’t been taken on Amazon’s FBA platform. Please review any terms and requirements directly with Amazon. If you plan to move inventory into the EU, you may need to register for new VAT numbers, as discussed earlier.

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