Let’s get digital in a post-Brexit world
As pretty much everyone worldwide now knows, the UK left the EU on the 31st January, and with it the EU’s single market which currently guarantees all UK companies the free movement of goods and services.
There is now a transition period until the end of 2020 while the UK and EU negotiate additional arrangements. Unsurprisingly, much still needs to be negotiated and it is unclear to what extent COVID-19 will impact these timelines. One thing for sure is that cross-border trade will undoubtedly now involve more paperwork, tariffs, delays and third parties. It is also true to say there has never been a better moment to digitalise and optimise one’s shipping and product data. Sadly Brexit will not only impact goods that you’re sending out of the UK but also the two-way traffic related to your returns. Here’s some top tips from our returns experts.
HS codes were previously not needed for goods travelling from the UK into Europe, but they will be required imminently. So for smaller retailers in particular, previously HS codes may not have been a priority, but for outbound sales and returns, your products must have a HS code.
What are HS codes?
HS codes (Harmonised System codes) or HTS Codes (or Harmonised System of Tariff codes), are commodity descriptions that classify goods for import and export. After the transition period, they will be required for all goods coming in and out of Great Britain. HS codes enable you to:
Correctly fill in customs declarations and other paperwork
Check if there’s duty or VAT to pay depending on the receiving countries tariffs and taxes
Identify duty reliefs that may be applicable
How is the code created?
The code must be selected by the retailer. The code is a sequence of 6 digits, with a further 4-6 numbers following the HS code to denote country specific classifications including tariffs or restrictions. For example, the code 6105901000 would be broken down as follows:
How do I obtain the right HS code for my products?
The best way to obtain your HS code is to navigate the UK government website, searching for the HS codes that best matches your product. Search for your code here >>
What are Incoterms 2020?
The Incoterms 2020 are the international trade terms for the sale of goods, and are published by The International Chamber of Commerce. They explain the responsibilities between a buyer and a seller and the costs and risks associated with the international trade and the transportation of products.
What changes can we expect in 2020?
The vast majority of existing Incoterms are still included, however some have been slightly amended. Also, new terms have been added including changes to the basic level of insurance required to be provided by the seller, DAT has replaced DPU, but Import Customs clearance and related costs remain the buyer’s responsibility.
Top Tips for being ready to trade internationally from 1st January 2021:
- Investigate the need for Returned Goods Relief (RGR) and pass it on to your returns management partner.
- If you don’t have a trusted returns management partner, call ZigZag immediately.
- Acquire a Customs Procedure Code if needed and pass it on to your returns management partner.
Get an EORI number if you do not already have one and investigate the need for an EU EORI number, passing both on to your returns management partner.
- Start to capture and provide additional data with your orders. We will need the information available for the relevant documentation to maintain the smooth return of your items.
- If you are an existing ZigZag client, and you don’t provide ZigZag with a data feed, we strongly recommend you contact your Account Manager to discuss moving to our fully integrated version of the ZigZag returns management platform as this will aid your customs declaration process and goods clearance.