Customs Changes in 2022

From January 1, 2022, customs declarations will be required “upfront,” as will any applicable levies (although VAT-registered businesses will still be able to use postponed VAT accounting to avoid having to pay Import VAT at this stage). Physical checks are also anticipated to increase (they are currently confined to “high risk live animals and plants”). 

The UK Government deferred the following measures: 

• Compliance with requirements for Safety and Security declarations (for all types of goods), export health certificates (for products of animal origin), and phytosanitary certificates (for products of plant origin) will not be implemented until July 1, 2022.
• The obligation for all agri-food goods to undergo physical checks at Border Control Posts will have a similar grace period, so it will not take effect until July 1, 2022.

Also, the deferral of the requirement for all relevant products to be labelled with the new UK CA safety mark rather than the EU CE mark (which was initially planned for 1 January 2022 for most products but has now been pushed back to 1 January 2023).

The impact of the postponement:

While the delay may minimise the likelihood of disruption to some extent, failing to deliver the right paperwork by January 1, 2022 will result in the inability to clear customs and join the UK market. 

It’s also unclear how successfully the UK’s customs IT systems and other border-related infrastructure will adapt. As a result, despite the deferral, supply chains may be disrupted. Some businesses are likely to stockpile ahead of the changes to reduce the possibility of disruption, which might lead to shortages. 

There’s also a chance that as a result of the deferral, some businesses will believe they don’t have to plan for change on January 1, 2022, which isn’t the case.

What can you do to prepare?

To reduce the chance of a disruption, take the following steps:

• Engage with your suppliers in particular to ensure that they can give you with all of the necessary information and paperwork to clear products through UK customs (bear in mind that EU suppliers may have been lulled into a false sense of security by the postponement of most UK border processes until 1 January 2022).
• Stockpiling goods is a sensible strategy to reduce the risk of supply chain disruption, but commercial warehouse space is expected to be scarce.
• If your current suppliers are unable to deliver on time, it is also worth investigating the availability of alternative sources of supply. To assist this, contractual procedures such as priority supply requirements, options, and rights of first refusal can be implemented.

The danger of disruption is greatest at ports that specialise in roll-on-roll-off traffic and lack proven mechanisms to handle big volumes of traffic needing customs clearance and accompanying border checks. Businesses may be able to avoid the interruption entirely by using alternative routes.

The main line is to make sure you’re working with an efficient, dependable customs agent who can handle IMPORT and EXPORT, will handle your transit paperwork, has a deferral account, and has excellent visibility into transport availability as well as any port and customs concerns.

For further support and information regarding customs updates, please contact our friendly AFFA team.