Trading with the EU in the Event of a No Deal Brexit

by Aneta Williams, Senior Tax Associate

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In the event that the UK leaves the European Union without a deal, from 11 pm on 31 October 2019, many UK businesses will need to apply the same customs, excise and VAT procedures to EU trade that currently only apply when trading with the rest of the world.

HMRC has written to all businesses that they believed may be affected by a no deal scenario (those that import and export from the EU) earlier in the year in preparation for the UK’s planned departure from the EU in March.

In August 2019, the government announced that they will be automatically enrolling around 88,000 VAT registered businesses, who have not already been issued with an Economic Operator Registration and Identification (EORI) number. HMRC figures show that around 72,000 businesses have already been issued with EORI numbers, out of an estimated total of 245,000 firms who will need one if the UK leaves the EU without a deal.

Businesses that are not VAT registered will not be automatically enrolled, and will need to apply for an EORI number.

Why businesses need an EORI number – UK Brexit Trade Tariff

As the UK is currently a member of the Common Market, businesses can move goods freely between EU countries. This means that businesses trading with the rest of the EU do not have to make any customs import or export declarations, and their trade with the EU is not subject to import duty. Certain goods are, however, subject to excise duty, such as alcohol, tobacco and oils. These goods are currently free to move between the UK and the rest of the EU with the excise duty suspended.

If the UK does leave the EU on 31 October 2019 without a deal, there will inevitably be immediate changes to the procedures that apply to businesses trading with the EU, as the free circulation and movement of goods between the UK and EU will end. This is the “cliff-edge” that many in the media have talked about – no withdrawal agreement, no transitional period and very little time to prepare.

HMRC has sent letters to inform UK businesses trading with the EU that they must register and obtain the UK issued EORI number to be able to continue trading if the UK leaves the EU with no deal. It will take up to 3 days to receive an EORI number by email, so businesses should apply now. Once received, it should be used on all future communications with HMRC about customs. The government have issued guidance on how to obtain an EORI number on their website.

To make declarations using HMRC’s Customs Declaration Service (CDS), you will first need an EORI number. If you import or export outside of the EU, there will be differences in the information you need to provide with your declarations post-Brexit, with further information required as a result of changes to the tariff. This is due to changes to the UK Trade Tariff required by the Union Customs Code (UCC).

The need to register is not restricted to VAT-registered businesses and will apply to all businesses who wish to either import or export goods from the EU. However, current guidance is that you will not need to register if you will only import or export services that do not involve moving physical goods. Businesses can either appoint customs agents or make customs declarations themselves.

HMRC is also introducing Transitional Simplified Procedures (TSP) for customers, to make it easier to import and export goods from the EU in the immediate period following Brexit. An EORI number is required to sign up to TSP. TSP will allow transporting of goods into the UK without having to make a full customs declaration at the border. There are specific goods (controlled goods) that will require the provision of information to HMRC customs before import.


This publication has been prepared by RRL LLP. It is to be treated as a general guide only and is not intended to be a comprehensive statement of the law or represent specific tax advice. No liability is accepted for the opinions it contains, or for any errors or omissions. All rights reserved.