Exporting goods

For Customs purposes, an export is defined as moving goods to ‘third countries’ – meaning any country outside the European Union (EU).

Guide

9 min read

1. Disclaimer

This guide contains information relating to the EU that may be out of date due to Brexit. We are working to update our guidance as the situation unfolds. For urgent assistance please contact your local Business Gateway office or visit https://www.prepareforbrexit.scot/.

2. Exporting goods to non-European Union (EU) countries

For Customs purposes, an export is defined as moving goods to ‘third countries’ – meaning any country outside the European Union (EU). So if you sell good to France for instance, you’re not making an export (that would be referred to as a dispatch). But if you sell to Russia, which is outside the EU, then you would be making an export, for Customs purposes.

Export duty and VAT

You won’t pay Customs duty on exports. There may be Customs charges in your customers’ countries though. So you need to be clear on who will pay those charges – you or the customer.

Exported goods won’t be used in the EU, so exports are zero-rated for VAT. You’d then include the value of your exported goods in box 6 of your VAT return, and keep records to confirm that the export has taken place.

3. What you need to do

Apply for an economic operator registration number (EORI)

The first thing you need to do is get an economic operator registration number (EORI). You’ll need this whenever you deal with Customs officials. To avoid any delays, apply for your EORI at least three working days before you’re due to make your first export.

Application and guide for EORIs.

Authorised Economic Operator (AEO) certification

This is an internationally recognised quality mark that shows your role is secure and your Customs procedures and controls are efficient and compliant. It’s completely optional though.

How to become an authorised economic operator.

Make an export declaration

Your legal requirement to declare what you’re exporting and where to is described as ‘making a declaration’ or ‘making an entry’. You do this electronically using a single administrative document (SAD), which is also known in the UK as a C88. We’ll cover a few of the entries you need to make on your SAD in this article. There’s also some general guidance in the link below.

Government guidance on the single administrative document.

The commodity code

If you’re exporting, a commodity code is eight digits long, and you should put it in box 33 on your SAD. It’s also known as a classification code, a harmonised code, a tariff code and a comcode.

The code tells customs what the goods are, and whether any special rules or charges apply.

The customs procedure code

This seven-character code lets Customs know what you’re doing with the goods. For instance, you may be sending them out on long-term loan, or exporting them for temporary exhibition purposes. This code should go in box 37 on your SAD.

Declaration unique consignment reference

This is used to control the movement of goods through ports and aiports. It has up to 35 characters, in four parts, and to avoid delays it’s important to copy it correctly.

Value of goods

Enter the value of the goods in box 46 of your SAD. It’s usually the ‘free on board’ value, which means the cost of the goods to the purchaser.
‘Free on board’ is an incoterm – an international commercial term.

Find out more about incoterms and how to use them.

4. Classifying your goods

Classifying your goods is the procedure you use to find the correct commodity code.

Why you need a commodity code

1: Trade statistics

The UK Government uses the information from commodity codes to see a picture of the country’s export trade statistic. Such importance is placed on this that providing inaccurate information can result in a financial penalty.

2: Export licences

Your commodity code will indicate whether you need any particular licences to export your good. Without the appropriate licence (if required) , Customs may delay movement of your goods until you provide the documents, or they may seize the goods.

Find out more about licences for exports.

Where to find a commodity code

Classifying your goods is usually easy. You need to consider what they are, what they’re used for, and what they’re made of. It’s important to get the commodity code right, as one digit out of place will change its meaning – and that can be an expensive mistake. You can find help using the link below.

Help with classifying your goods.

What is The Tariff?

The main official document for exporters is known as ‘the Tariff’. You have to pay an annual subscription for it, and then you receive monthly updates. Or if you decide to use an agent to deal with your exports, they’ll have a copy of it.

However, the online version may meet your needs, and it’s free.

See the Trade Tariff.

5. The export process

The electronic process your goods go through has several stages, and is supported by a variety of computer systems.

The four stages of the export process

Most exporters use the full pre-entry procedure, also known as the standard export procedure, to export their goods.

Stage 1: Pre-lodgement

As ‘the declarant’, you make your export declaration before your goods arrive at the Customs location. This lets Customs know your goods are on their way.

Stage 2: Presentation, arrival and acceptance

When the goods arrive at the port or airport, an arrival message is sent to CHIEF – the Customs’ Handling of Import and Export Freight system. It controls, records and checks the movement of goods by land, sea and air. This also lets you complete Customs formalities electronically.

3: Processing and clearance

Once Customs makes any necessary checks and examinations, your goods receive permission to progress, also known as P2P.

4: Departure

The departure stage confirms the goods were exported from the EU. And you need the message that’s produced as a result to show your goods can be zero-rated for VAT.

If the goods leave the EU directly from the UK, the departure message will be submitted once the goods have left the UK. But if the goods leave the EU from an other member state, the departure message will be submitted once the goods have left the EU from the other member state.

Other ways to export your goods

Simplified declaration procedure

You can choose this procedure if you need to export goods at short notice, or you don’t have all the details available.

You need approval from Customs to use it, by applying for authorisation to submit an abbreviated pre-shipment advice notice, containing less information than the full export declaration.

Within 14 days of the goods receiving permission to progress, you’d need to follow the pre-shipment advice notice with a full, supplementary declaration containing all export information.

Find out more about the simplified declaration procedure.

Local clearance procedure

This procedure is for exporting goods with a short lifespan, or at short notice. It allows you to prepare your goods for export at a nominated, approved inland location (usually your premises or warehouse). You would then declare your goods to Customs before being packed and moved to the frontier.

You can either make:
a full export declaration
or
an abbreviated pre-shipment advice declaration, followed by a supplementary declaration within 14 days of the goods being granted permission to progress.

Whichever declaration you choose to make, you must state when the good will be available for inspection and when you want the goods released to the airport or port. The time limits will be agreed with Customs.

Read more about the local clearance procedure.

Postal exports

If you export in small quantities, you can use a courier service. You may never have to make a full single administrative document declaration, just a shorter version.

You’ll be given proof of export – usually a certificate of posting – to support VAT zero rating.

Find out more about postal exports.

Merchandise in baggage

If you have delicate items to send, or your goods need adjustment on delivery, you can carry them as hand luggage. You need to declare them to Customs before you check your bag in, and complete a single administrative document declaration.

Read more about merchandise in baggage.

6. Using an agent

With so many stages in exporting, it makes sense to hire someone to help you. Freight forwarders arrange to transport your goods from one country to another, and may provide services such as Customs clearance. Customs agents and brokers ensure your goods can be cleared through Customs and on to their destination.
Agents offer either direct or indirect representation. Direct means the agent acts in your name, on your behalf. So they declare the goods based on your specific instructions. Indirect representation means the agent acts in their own name, but on your behalf. So in this instance, both you and the agent are responsible for any Customs irregularities.

Find out more about export agents.

What your agent will ask you to provide

Your agent should always ask for:

  • your economic operator registration identification (EORI)
  • the full name and address of who the goods are going to
  • a commercial reference to form the declaration unique consignment reference (DUCR)
  • details of the country of destination
  • shipping or flight details, if known
  • the correct value of the goods
  • the commodity code, if known
  • any customs procedure code (CPC)

If you don't know the commodity code, you need to give your agent a clear description of the goods. This will ensure the agent gets the correct commodity code for your goods.

What your agent should provide for you

Your agent should notify you of the declaration unique consignment reference used, or the CHIEF export entry reference, with the entry number and date. This helps Customs trace your shipment through your records, so they can verify that it should be zero rated.

7. Export preference

Export preference

The EU has a number of preferential trade agreements with certain countries or groups of countries. They allow you to export some good manufactured in the EU to particular non-EU countries at a lower or zero rate of duty – providing they meet the required conditions.

How export preference can help you

In some countries – particularly developing ones – the cost of importing EU goods is too high to be affordable. Export preference help you by making those prices more competitive, encouraging trade.

Countries with preferential trade agreements

You can find out which countries give preference in Public Notice 827, European Community Preferences: export procedures.

Qualifying for export preference

To quality for export preference, you need to prove your goods are of ‘EU origin’. So they must be either ‘wholly produced’ or ‘sufficiently transformed’ within the EU to satisfy the conditions for preferential rates.

See the rules of origin for exported goods.

8. Keeping records

The law says you have to keep records of all your export activities. And HMRC may need to visit you sometimes, to check your records. Not keeping accurate records can result in financial penalties for your business. Your records should show:

  • the correct value of the goods
  • the origin of the goods
  • the classification of the goods.

You should also keep any supporting documents you’ve received, prepared, maintained or issued, such as:

  • original orders, invoices and delivery notes
  • credit and debit notes
  • any records relating to export
  • record of payments or receipts
  • journals and ledgers

Depending on how you transport your goods, you should also keep:

  • bills of lading
  • airway bills
  • certificates of shipment

You should keep your export records for four years, or if you’re VAT- registered, six years.

Audit trails

Customs wants you to have an audit trail for your goods – documenting them from production to their final destination.
Find out more about international trade record keeping.

Find out more on Gov.uk

For more help with exporting goods, contact your local Business Gateway office

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