Why you need an EORI number for a no-deal Brexit

Whatever your view of Brexit, UK e-commerce businesses now need to prioritise preparations for the very real possibility of a no-deal Brexit. If you are yet to apply for an EORI number your business could come to a standstill while you wait on paperwork, so read on to learn what you need to do and get the process started. 

An EORI number for a no-deal Brexit scenario should be top of your to-do list. If you ship goods to or from the EU, you will need your number in place before 31st October 2019 to ensure your e-commerce business can maintain a relatively normal shipping pattern. 

If you already have an EORI number, it is important to check it is compliant with the changes occurring in case of a no-deal Brexit.  Your e-commerce business must apply for an EORI number if you import or export outside of the UK.

What is an EORI number? 

An EORI number, or Economic Operator Registration and Identification number, is used to identify your business and collect duty on your goods within the UK and the EU. It is issued by HMRC and has been mandatory for businesses shipping to and from the EU since 1st July 2009. It is a method for tracking your business imports and exports within the EU and will be needed regardless of how Brexit is, or isn’t, agreed. 

Get A Free Quote

Breakout E-commerce accountants and Xero specialists to supercharge your UK online business growth.

It is compulsory for every business that moves physical goods across borders to have an EORI number. This number is used as identification during customs procedures and when exchanging information with customs administrations.

Why do I need an EORI number? 

As an e-commerce business owner, you will require an EORI number for no-deal Brexit if you currently ship goods to or from the EU, or if you plan to in the future. If you currently buy and sell within the UK, it is still best to have one in place, as when your business scales it allows the transition to be a smoother and streamlined process. Businesses that ship goods outside of the UK and do not have a valid EORI number in the case of a no-deal Brexit, are likely to experience shipping delays and storage invoices from customs.

In order to avoid a lengthy delay through customs, you will need to have your paperwork in order before no-deal Brexit hits. If your items are detained while you deal with matters, you will accrue costs and lose some customer good will as it creates a poor customer experience. 

It is important for e-commerce businesses to exceed customer expectations and maintain a positive customer experience. Businesses that fail to do so are at risk of losing sales and customers to competitors in the marketplace. So, to ensure your customers are satisfied and you do not endure any unexpected costs, you should take action now.

Importing or Exporting goods from EU to UK and EORI numbers
Alex Ahoi

EORI number for a no-deal Brexit  

Unless Parliament intervenes, it is likely that the UK will leave the EU without a deal. In the event of a deal, temporary measures such as maintaining our presence in the Customs Union may arise, allowing you to continue without an EORI number. However, in the event of a no-deal, it will become mandatory. There are exceptions for businesses that only move goods between the Irish and Northern Irish border

In the case of a no-deal Brexit, even your existing EORI number may need to change…

Existing EORI numbers 

If you are currently conducting business through Customs, you may already have an EORI number. However, if it contains the letters EU it will not remain valid. An EORI number for no-deal Brexit must contain the letters GB. If your business’s EORI does not contain these letters you will need to reapply.

A no-deal Brexit means you will no longer be able to trade outside of the UK with an EU EORI number. Businesses that already obtain an EORI number should check that they have the right type of number.

If your business is based in the UK and exporting from or importing to the UK, you should follow HMRC guidance for applying for a UK EORI number or follow the steps in the “How to Apply” paragraph below. 

Automatic allocation to VAT-registered businesses 

HMRC is sending VAT registered businesses that have a history of trading with the EU but don’t have an existing EORI number, a letter containing an automatically allocated number. Those letters should be received in the next couple of weeks. However, if you are not VAT registered or are yet to begin trading with the EU you will still need to apply.  

Automatic allocation will help to ease the stress of VAT listed companies, but it is just the first preparation step for traders under a no-deal Brexit ruling. Need not to mention, there are thousands of businesses that are not VAT registered that will still need to register themselves.

How to apply for an EORI number 

In the likely event that your e-commerce business needs to apply for an EORI number for no-deal Brexit, please don’t delay. Most EORI numbers come through quickly, but with so many businesses requiring a number before Brexit, delays may occur, and you don’t want to be caught out.  

Be sure not to take the risk of applying for an EORI once items have already been shipped. Protect your business and your customers by applying as a soon as possible.

Applications are made via the HMRC website, where you can also find additional guidance on how a no-deal Brexit could affect your business.  

Next Steps 

You may have concerns about your e-commerce business as no-deal Brexit looms. If you’re looking for guidance for your business through Brexit please get in touch with our team today.  

The best time to start is now.

Get A Free Quote

Breakout E-commerce accountants and Xero specialists to supercharge your UK online business growth.