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Key factors UK manufacturers need to consider when it comes to a new trading relationship with the EU

There’s little doubt that the last 12 months have brought unprecedented change to the UK and global economy. The COVID-19 pandemic has created untold challenges for the manufacturing sector, in addition to both UK and EU manufacturing organisations now having to navigate a changing trading relationship with one another post EU exit.

Accounting for 9% of UK GDP, and 9th in the world for its manufacturing output, the sector is strategically important for the national economy. Due to its sheer size and scale, it’s imperative that the manufacturing industry – and those organisations within it – get the support they need to navigate the UK’s new trading relationship with the EU.

Growth Platform’s Post-EU Exit Transition Service, has developed several tips below which apply to UK manufacturers of all shapes and sizes in ensuring their business is fully adhering to the new rules and regulations surrounding their operations – particularly when it comes to making and exporting goods.

1. Rules of Origin

The rules of origin play a crucial role in the UK’s new relationship with the EU. They govern the economic nationality of goods – seeking to determine where something is produced, grown or where the last substantial development to a manufactured product took place.

The UK-EU Trade and Cooperation Agreement (TCA), allows businesses to trade goods between the UK and the EU on a tariff-free (i.e. no duties/taxes on imports) and quota-free (i.e. no limits on imports) basis as long as the necessary rule of origin can be proved and documented.

It’s vital for manufacturing organisations to fully understand the rules of origin and apply them to the goods they produce – particularly in relation to the exporting of finished goods and the importing of raw materials.

2. Moving goods

The new trading relationship with the EU has brought with it a greater amount of documentation for businesses to prepare before moving goods across the border into EU territory. It’s vital that manufacturers consider the procedures put in place or potentially have their goods stopped from making a journey into European territory or across the Irish border.

It is the responsibility of each organisation to ensure that their own haulage drivers, or those of the haulage company they work with, adhere to new mandatory procedures, these include:

  1. COVID-19 testing – As a result of the global pandemic, all haulage and commercial drivers need to ensure they have the correct documentation to prove that they have tested negative for COVID-19.
  2. Driver competence documentation and licences – All UK drivers entering the EU will need to produce a Driver Certificate of Professional Competence (CPC) in order to work. Drivers are obliged to carry a CPC card at all times while driving within the EU. In addition, drivers will need to produce a relevant licence for the type of vehicle they are driving, which should also be carried at all times.
  3. Passports and Visas – UK drivers need at least 6 months on a UK passport to travel to the EU. They can also operate in the EU without the need for a visa, providing they do not spend more than 90 days in the EU within any 180-day period.
  4. Phystosanitary checks for dunnage or wooden packaging – It is crucial that that any dunnage or wooden packaging meets the ISPM15 international standards.
  5. Company documentation – Many drivers will be working for a UK haulage or logistics company. As a result, each will need to provide the relevant documentation which proves the authority of their company to be operating in EU territory. These documents will include:
  • An operating licence (these may come in the form of the UK Licence for the Community)
  • Motor Insurance Green Card
  • Vehicle registration documentation
  • Transport Manager Certificate of Professional Competence
  • A clearly displayed ‘GB’ sticker
  • Plan your deliveries and collections here, to ensure you comply with the rules of cabotage

Commercial Invoices

It is crucial for manufacturing businesses to familiarise themselves with commercial invoices and to understand the procedure around them.

It’s a special export document which contains the important information about the goods you intend to ship and helps get your package through customs more quickly when filled in correctly. The document is an international transaction and serves as a contract and proof of sale between the buyer and seller and includes key terms such as who pays the customs costs.

Find out more about commercial invoices and how to fill yours in correctly.

3. Customs special procedures

Customs special procedures (CSPs) allow you to store, temporarily use, process or repair your goods and get partial or full relief from import duty, or in some cases, suspension.

In the past, these procedures required a Customs Comprehensive Guarantee, however businesses will now be able to apply to be fully authorised to operate special procedures without the need to provide a Customs Comprehensive Guarantee unless one is specifically required as a condition of authorisation by HMRC.

Examples of CSPs:

  • Inward processing relief
  • Outward processing relief
  • Return of goods relief
  • Customs warehousing
  • Temporary admission
  • Authorised use

Find out more about customs special procedures that enable you to suspend, pay less or no duty on goods you import or export.

4. VAT consideration

Up until the end of the transition period, UK manufacturers won’t have had to make any changes in order to continue trading with the EU when it comes to VAT as the UK was still part of the EU customs and VAT systems. However, since the transition, significant adjustments are now required for businesses that import or export to the EU.

It’s vital that manufacturers seek advice on how new VAT rules apply to their business and the products they produce. Some areas you’ll need to consider are:

  • Reviewing your supply chains and assessing the potential implications of VAT. You’ll need to consider the need for EORI (Economic Operators Registration and Identification) numbers and changes in VAT reporting.
  • Ensure you can provide evidence for VAT zero-rating for exports. You may need to invest in IT systems to support you in doing this.
  • Consider whether you’ll need the support and services of a customs broker or freight forwarder for goods to help in reconciling VAT and other fiscal and administrative processing.
  • Ensure you stay abreast of changing VAT rulings that affect the UK, EU and manufacturing sector.

5. The marking of goods for EU and GB markets

The way goods should be marked up in Great Britain has changed since the UK’s break with the EU in January 2021. UKCA (UK Conformity Assessed) marking should now be used by manufacturers producing goods for markets in Great Britain (England, Wales and Scotland). It covers most goods which previously required the European CE marking. To allow businesses time to adjust to the new requirements, manufacturers will still be able to use the CE marking until 1 January 2022 in most cases.

However, the UKCA marking alone cannot be used for goods placed on the Northern Ireland market, which require the CE marking or UKNI marking. The government has produced guidance on this which can be accessed here: Placing goods on the Northern Ireland market.

The above checklist should be used as a guide only. If you want to speak to someone directly, the Post-EU Transition Support Service is also offering Liverpool City Region business free access to its team of EU Transition Advisors. You can book an advice session by emailing:

Growth Platform’s Post-EU Transition Support Service also has a dedicated manufacturing support page full of links and guidance materials.