How to cope with the EU trading rules

  • 19 Feb 2021

By Arne Mielken, founder of customs and training consultancy Customs Manager

Many small business owners are struggling with the red tape and extra costs of trading with the EU following our departure from the single market.

They face a blizzard of new regulations, including the fiendishly complex rules of origin, and the corresponding avalanche of paperwork and profit-sapping duties on goods.


But there are practical steps that small business owners can take to ensure trading with the EU is as seamless as possible.

Essential preparations

If you are exporting or importing for the first time, there are some fundamentals to take care of. First, you need to register and obtain an EORI business identification number from HMRC. It’s quick and free but watch out here because there are regional variations. For trade with Northern Ireland, for example, you need a separate EORI number and a different one is required if you are importing into the EU.

If you are importing goods, consider setting up a deferment account. This lets you make one payment a month via Direct Debit instead of paying for individual consignments. This is essential, otherwise you could end up having your goods stuck at the port until you pay up.

Fill in customs declarations correctly

This is an essential document that you must now use for international trade and one that many small businesses get wrong. It has a whopping 54 boxes, but only some need completing, depending on whether you are importing or exporting goods, or just moving products through a country.

Make sure you provide the correct information about the origin of goods and their customs value – this can determine the rate of duty payable – and pay particular attention to box 33, where you input your commodity code.


Make sure it’s the correct one so that you can set the right price for your products and avoid any back taxes. If the commodity code is incorrect, the importer may have to pay taxes.

Get the right permits

Depending on the type of goods you export, certain permits, certificate and authorisations may be needed. Without the necessary documents, you may not be able to export your goods to the EU.

For example, sanitary and phytosanitary (SPS) goods – which cover animal and plant products – require specific documents. Such goods are subject to rigorous border inspections, so importers need to register on official EU and UK IT systems and submit the required veterinary documentation to gain access to foreign markets. Failure to do so could mean your SPS goods being refused on health grounds.

You can find more information on the Access2Markets Database which lists all the import requirements of EU member states:

Choose the right broker

A broker or freight agent may do much of the heavy lifting for you – such as completing your customs entry with HMRC – so it’s crucial you pick the right one which means checking the following:

• What is their track record?

• Will they carry out customs formalities?

• Do they subcontract anything out?

• Do they have their own handling facilitates?

• What credit facilities do they offer?

• Are they AEO (Authorised Economic Operator) certified?

Make sure you brief your broker properly and tell them exactly what you want them to do.

Rules of origin

Don’t be fooled by claims that we still enjoy tariff and quota-free trade. This depends on whether so-called rules of origin are met.


If your goods originate in the UK or the EU and you can prove it, then you won’t have to worry about extra tariff costs. But if you use foreign components – say, metal from the US to make a car part – then you will need to check the product-specific rules to see how much non-EU and non-UK content is allowable.

The EU has published a self-assessment tool to assist businesses with this:

You can also find more advice on rules of origin in my video: 

Set up shop in the EU

If all else fails, then consider setting up an EU base. There would be zero customs formalities and declarations to slow things down, and you wouldn’t have to worry about complex rules of origin.

With a base in Europe, there would be no customs duty, no border clearance paperwork or delays at ports to stress over and no need to register for VAT in multiple jurisdictions. Perhaps the biggest benefit of having an EU presence, however, is the direct access it gives you to more than 400 million consumers and the promise of more sales.


However, this may not be a viable option for some small businesses, and these will have to navigate the complex new EU trading arrangements. It’s therefore wise to seek professional advice to ensure that doing business across the channel is as seamless as possible.



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