UK Companies Importing from Germany

With Germany being one of the UK’s largest trading partners, many UK companies are involved in importing goods from Germany. Whether it’s machinery, vehicles, pharmaceuticals, or luxury goods, importing from Germany is an essential part of the UK’s economy. However, the process can be complex, especially after Brexit. To successfully import from Germany, UK businesses must comply with several regulations and customs procedures to ensure smooth and efficient transactions.

In this article, we’ll walk you through what’s needed for UK companies importing from Germany and how to navigate the post-Brexit trade environment.

1. Register as an Importer and Obtain the Necessary Credentials

Before importing goods from Germany, UK businesses must register with HM Revenue & Customs (HMRC) and obtain the necessary credentials to handle customs procedures.

• Economic Operator Registration and Identification (EORI) Number: A UK business must register for an EORI number, which is essential for making customs declarations. This number is required for all import transactions, both for goods arriving from EU countries like Germany and non-EU countries.
• Customs Registration: HMRC registration is also necessary, and businesses can apply for an EORI number on the HMRC website. The registration allows companies to declare goods to customs and comply with import regulations.

2. Understand Post-Brexit Customs Requirements

Since the UK left the EU, the rules for importing goods from EU countries like Germany have changed. However, the EU-UK Trade and Cooperation Agreement (TCA) ensures zero tariffs and zero quotas for most goods. While this simplifies trade, businesses still need to follow specific customs procedures to bring goods into the UK.

• Customs Declarations: Importers must submit a customs declaration to HMRC for goods entering the UK. The declaration includes important information, such as the commodity code, which determines the classification and duty rate of the product.
• Customs Duty and VAT: While many goods are free of tariff, VAT (Value Added Tax) still applies on imports. The standard UK VAT rate is 20%, but some goods may be exempt or subject to a reduced rate. UK businesses registered for VAT can reclaim the VAT paid on imports as input tax.
• Import Entry: The business must complete the import entry through HMRC’s Customs Declaration Service (CDS) or with the assistance of a customs broker, who can handle the paperwork on behalf of the business.

3. Rules of Origin and Proof of Origin

Under the EU-UK Trade and Cooperation Agreement, goods that originate in Germany are generally eligible for zero tariffs, but they must comply with rules of origin. These rules ensure that the goods qualify as originating in Germany or the EU, which is necessary to take advantage of the tariff-free access.

• Certificate of Origin: The UK business will need proof that the products it imports meet the rules of origin. Typically, this proof comes in the form of a certificate of origin provided by the German supplier. This document confirms that the goods are produced or sufficiently processed in Germany.

4. Essential Documentation for Importing Goods

When importing goods from Germany, UK businesses must ensure they have the right documentation to ensure compliance and smooth customs clearance. The required documents may include:

• Commercial Invoice: The invoice from the German supplier, detailing the value of the goods, product descriptions, quantities, and country of origin.
• Packing List: A packing list provides information on the contents of the shipment, including weights, quantities, and packaging details.
• Bill of Lading: If the goods are shipped by sea, the bill of lading serves as a receipt for the goods and a contract between the seller and the shipping company. Similarly, for air shipments, an air waybill will be used.
• Certificate of Origin: In some cases, a certificate of origin is required to confirm the origin of the goods, ensuring they qualify for zero tariffs under the EU-UK Trade Agreement.
• Import Declaration: This is the customs declaration required by HMRC for the goods to enter the UK.
• Import License (if required): Some products, such as pharmaceuticals, food, and chemicals, may require an import license. This is typically issued by the relevant UK authorities and ensures the goods meet regulatory standards.

5. Shipping and Logistics

Efficient shipping and logistics are crucial to the success of importing goods from Germany. UK companies need to consider several factors, from selecting the right shipping method to managing customs clearance and delivery.

• Freight Forwarders: Many UK businesses rely on freight forwarders to handle logistics. These professionals manage the transportation, customs clearance, and paperwork, making the entire process smoother. They can also help with warehousing and insurance.
• Choosing a Shipping Method: Goods from Germany can be transported by road, sea, or air. Depending on the nature of the goods and the time constraints, UK businesses can choose the most appropriate and cost-effective method of transport.
• Incoterms: Understanding Incoterms (International Commercial Terms) is vital when importing from Germany. Incoterms define the responsibilities of the buyer (the UK company) and the seller (the German supplier) for shipping, insurance, and customs clearance. Common terms like ExWorks (EXW) or Delivered Duty Paid (DDP) are commonly used.

6. Tariffs, Duties, and Customs Handling

Despite the zero-tariff trade agreement between the EU and the UK, there are still some financial considerations for UK businesses importing from Germany.

• Customs Duty: While most goods are tariff-free, some products may still incur customs duty. It’s important for businesses to check the commodity codes to determine whether any duties apply.
• VAT: All imports are subject to VAT, but businesses that are VAT-registered can typically reclaim this VAT as input tax, provided they meet the necessary conditions.
• Customs Brokers: Some UK companies prefer to hire customs brokers to help navigate the complexities of customs declarations, VAT payments, and regulatory compliance. A customs broker ensures that all paperwork is properly completed and filed with HMRC, reducing the risk of delays or fines.

7. Compliance with UK and EU Regulations

UK businesses must also ensure that the goods they import from Germany meet the relevant regulations, including product safety, quality standards, and labeling requirements.

• Product Safety: Certain products, such as electrical goods, machinery, and pharmaceuticals, must meet UK safety standards. These products may need to undergo testing or certification to ensure compliance with UK regulations.
• CE Marking and UKCA Mark: After Brexit, UKCA (UK Conformity Assessed) marking is required for most products sold in Great Britain. Products from Germany that are CE-marked for the EU market may need to be re-marked with the UKCA mark if they are to be sold in the UK.
• Labeling Requirements: UK businesses must ensure that products are correctly labeled according to UK regulations, which may include information such as ingredient lists, safety warnings, and manufacturer details.

8. Payment and Currency Considerations

When importing from Germany, UK businesses must also consider the financial aspects of the transaction.

• Currency Exchange: Transactions between the UK and Germany are typically conducted in Euros (EUR). UK businesses should be mindful of currency exchange rates and any fees associated with converting currency when making payments.
• Payment Terms: Payment terms vary depending on the arrangement between the UK company and the German supplier. Common terms include Advance Payment, Letter of Credit (L/C), or Open Account. The payment structure should be clearly agreed upon to avoid any misunderstandings.

9. Receiving Goods in the UK

Once the goods arrive in the UK, the importing company must handle several steps to complete the process:

• Customs Clearance: The necessary customs documents should be submitted to HMRC to facilitate the clearance of goods.
• Inspection: Depending on the nature of the goods, HMRC or other regulatory bodies may inspect the items to ensure compliance with UK safety and quality standards.
• Delivery: Once cleared, the goods can be delivered to the UK company’s warehouse or another designated location for further processing or resale.

Conclusion

Importing from Germany offers UK businesses access to high-quality goods and products from one of Europe’s leading industrial powers. However, it’s important for UK companies to fully understand the requirements involved, from obtaining the necessary credentials to completing customs declarations, managing logistics, and ensuring compliance with regulations. By partnering with customs brokers, freight forwarders, and logistics experts, businesses can streamline the import process and ensure that their shipments from Germany reach the UK smoothly and efficiently.

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