Buying goods from EU means extra costs, for consumers and businesses alike

The Trade and Cooperation Agreement between the UK and EU might have scrapped the tariffs on goods moving across the two parties (subject to RoO), but VAT and Import taxes are still in place.

FOR CONSUMERS
As the BBC reports (21 Jan 2021):
Under the new rules, anyone in the UK receiving a gift from the EU worth more than £39 may now face a bill for import VAT – with many items charged at 20%.

For goods costing more than £135, customs duties may also apply, which can range from 0% to 25% of the product you’re buying if they have not been paid by the sender already.

The extra charges are usually collected by the courier on behalf of the government, with customers asked to pay before they can pick up their package.

Some specialist European retailers, such as bicycle part firm Dutch Bike Bits and Belgium-based Beer On Web, recently said that they would stop all deliveries to the UK because of the VAT changes, which came into force on 1 January.

Some firms have started charging additional “handling fees” to shoppers to cover costs associated with extra customs checks and paperwork that must be filled out.

Royal Mail, for example, is charging an £8 fee it says “reflects the cost of clearing items through customs and presenting them to Border Force”.

Meanwhile, delivery firm DHL says it is charging UK customers 2.5% of the amount paid to clear customs, with a minimum charge of £11.

Mail and freight company TNT is also adding £4.31 on all shipments from the UK to the EU and vice versa. It has said this reflects the increased investment it has had to make in adjusting its systems to cope with Brexit.

A spokeswoman for Logistics UK told the BBC that the handling fees were “a commercial decision by individual businesses”.

But Michelle Dale, senior manager at accountants UHY Hacker Young, said that new charges could present a major problem for firms in the coming weeks.

“I think what we’ll find is that a lot of trade with the EU from a business-to-customer perspective will come to a stop until some of these rules are eased,” she said.

A government spokesperson said: “The new VAT model ensures goods from EU and non-EU countries are treated in the same way and that UK businesses are not disadvantaged by competition from VAT-free imports.

“The new system also addresses the problem of overseas sellers failing to pay the right amount of VAT when they sell goods in the UK. We anticipate this will bring in £300m in tax every year, to fund essential UK public services.”

FOR BUSINESSES:
VAT and Import Duties are due imports from outside the UK into GB, and from outside the EU into Northern Ireland.

You can find all the VAT relevant information on this webpage: https://www.gov.uk/guidance/vat-imports-acquisitions-and-purchases-from-abroad

Are there any EXEMPTIONS or any way in which the cost can be reduced?
The answer is yes, through Duty Relief Schemes.
There are a variety of such schemes that you might benefit from, depending on a number of criteria: the country of origin of the goods, the typology of goods and the reason for which the goods are being imported.


The main duty relief scheme is the GSP scheme. “The GSP (Generalised System of Preferences) scheme is an EU directive that allows for products being purchased from suppliers in certain countries to be lower-rated or even free from duty. This scheme is in place to allow businesses in developing countries to trade on a wider scale internationally.”

GSP Duty Relief schemes are also known as “trade preferences”; this means you’re allowed to claim duty relief because there is a Free Trade Agreement with the origin country.

To find out if you can benefit from one, the easiest way is to check your product’s commodity code in the UK trade tariff. Under each product’s details, you should be able to see whether it’s eligible for any duty relief schemes and the terms of each scheme.

In addition to duty relief schemes listed under the trade tariff, there are also schemes based on what you’re using the goods for and on how long they’ll remain in the UK.

Below are some of the main of the duty relief schemes available:

Temporary admission; when you bring goods into the UK for designated, short-term use. (For example, an exhibition.) Inward processing; when you’re importing goods from outside of the EU to process then export (either to outside the EU or within the EU) you can claim duty relief. Outward processing; this allows you to export your goods to another (non-EU) country for repair or processing and then bring them back into the UK with full or partial duty relief.

Customs warehousing; customs warehouses allow you to store goods duty and VAT free until they leave the warehouse.

Community system of duty relief; if you’re importing products “for educational, scientific or cultural purposes; to encourage trade (for example, goods for test and commercial samples); for other purposes, for example: awards and decorations, when inherited, received as private gifts” (source: HMRC) you can claim duty and VAT back.

Duty suspensions and tariff quotas for raw materials, parts and unfinished products; if you’re importing goods to finish or use as materials in the UK (goods/materials that are unable to be bought or bought in sufficient quantities from within the EU) you can claim duty relief. The criteria that determine the eligibility for these duty relief schemes and the level of savings associated with them are:

– the type of goods
– the country the goods are being exported to
– the country the goods come from (as set by the ‘rules of origin’!)

To claim a trade preference you need to:br – insert the correct commodity code for your goods
– ensure your goods comply with the rules of origin
– be able to provide evidence of where your goods came from
– ensure you comply with transport rules

It is worth doing a bit of research to verify whether your goods are eligible for a Duty Relief scheme, and applying for it, as the financial savings for your business would be considerable.

Changes to labelling and marking of aerosol dispensers in GB

Changes to labelling and marking for aerosol products (GB)

OPSS has made the preparations necessary for the effective functioning of the product safety and metrology system at the end of the Transition Period.
To help ensure business understand what is expected of them, including on issues such as the use of the UKCA marking, OPSS have produced a range of guidance and advice, all of which is available at:
https://www.gov.uk/guidance/uk-product-safety-and-metrology-from-1-january-2021.

This now includes a ‘What’s Changed?’ summary guide to key changes regarding the specific product safety and metrology legislation amended by The Product Safety and Metrology etc. (Amendment etc.) (EU Exit) Regulations 2019.

This guidance provides a clear indication of what rules and regulations you will be required to comply with now that the Transition Period has come to an end.
To be notified when new material is published on the OPSS pages of GOV.UK, you can sign up for OPSS email alerts via the following link: https://www.gov.uk/government/organisations/office-for-product-safety-and-standards – half way down, under ‘Latest from OPSS’, there is a ‘get email alerts’ button to click on.

As ever, if you have any queries or if there is anything you wish to raise, please do get in touch with the BAMA staff or directly with the OPSS.

Trade event: Indian supplies of Specialty Chemicals

India Virtual Chemicals Event – UK Participants Needed

Dear BAMA Member

The Department for International Trade, together with the Federation of Indian Chambers of Commerce, is organising a Virtual Trade Event and is looking for British Chemical Companies to participate, both chemical manufacturers and end users. If this is of interest to you please let me know or contact victoria.coker@trade.gov.uk directly.

They are looking for users of a wide variety of different chemicals to take part, many of which I know our industry uses extensively. A draft programme is available, please don’t hesitate to contact us if you would like a copy.


Extract: Michael Gove’s staged implementation of border controls

From Michael Gove’s Statement to the House, on EU Exit preparations

The new technology that we’re introducing will allow us to monitor with far greater precision exactly who, and what, is coming in and out of our country.

The Border Operating Model that we published today (13 July) provides clarity about the end-to-end journeys of goods on the move between Great Britain and the EU, including information about controlled goods and the new government systems that will support future trade.

It is important to note that the Border Operating Model does not cover matters relating specifically to the Northern Ireland Protocol.

In the light of coronavirus, and in order to give business and industry more time to adjust – we announced last month that border controls would be introduced in THREE STAGES up to 1 July 2021.

– In the FIRST PHASE, from January 2021, traders importing standard goods will need to prepare for basic customs requirements. Full Customs Declarations will be needed for controlled and excise goods such as alcohol and tobacco products. But people importing standard goods will have up to six months to make their declaration and to pay tariffs. Traders moving goods using the Common Transit Convention will need to follow all of the transit procedures.

– In the SECOND PHASE, from April 2021, we’ll require all products of animal origin, regulated plants and plant products to have pre-notification and the relevant health documentation. Any physical checks will continue to be conducted at the point of destination.

– And in the THIRD and final PHASE, from July 2021, traders moving all goods will have to make full customs declarations at the point of importation and of course pay relevant tariffs. Checks for animals, plants and their products will take place at Border Control Posts in Great Britain.

UK trade tariffs from January 2021

The UK Government announced the UK’s new MFN tariff regime, the UK Global Tariff (UKGT). This will replace the EU’s Common External Tariff on 1 January 2021 at the end of the Transition Period.

The new tariff is tailored to the needs of the UK economy. It will support the economy by making it easier and cheaper for businesses to import goods from overseas. It is a simpler, easier to use and lower tariff regime than the EU’s Common External Tariff (EU CET) and will be in pounds (£), not euros.

The Government is taking a common-sense approach to the new tariff schedule by streamlining and simplifying nearly 6,000 tariff lines, and lowering costs for businesses by reducing administrative burdens. The changes include scrapping unnecessary tariff variations, rounding tariffs down to standardised percentages, and getting rid of all “nuisance tariffs” (those below 2%).

The UKGT also expands tariff free trade by eliminating tariffs on a wide range of products. The UKGT ensures that 60% of trade will come into the UK tariff free on WTO terms or through existing preferential access from January 2021, and successful Free Trade Area negotiations will increase this.

This will lower costs for businesses, ensuring they can compete on fair terms with the rest of the world, as well as keeping prices down and increasing choice for consumers.
The Government is maintaining tariffs on a number of products backing UK industries such as agriculture, automotive and fishing. This will help to support businesses in every region and nation of the UK to thrive. Some tariffs are also being maintained to support imports from the world’s poorest countries that benefit from preferential access to the UK market.

The UKGT was designed following widespread engagement with businesses across the UK. As it will come into force on 1 January 2021, it’s important that businesses can familiarise themselves with the new tariff regime ahead of this date.

Please, access https://www.gov.uk/guidance/uk-tariffs-from-1-january-2021 to check:

– what the tariffs apply to
– how to check the relevant tariff
– what goods are covered by tariff-rate quota

Scotland’s Deposit Return Scheme becomes law

As many of you will be aware, yesterday, the Scottish Parliament voted to approve the regulations for the Scottish Government’s Deposit Return Scheme. This final step in the Parliamentary process means the Regulations will become law and confirms a go-live date for the scheme of 1 July 2022.

Zero Waste Scotland was tasked with advising on scheme design, and supporting implementation, and in doing so we have relied on the contributions of a wide range of stakeholders. As such I would like to thank you for your contribution to the development of the scheme and the Regulations.

The regulations are available to view online, at legislation.gov.uk.

Further information is available on our deposit return information hub, https://depositreturnscheme.zerowastescotland.org.uk

Understandably, responding to the COVID-19 pandemic is the priority for businesses and the Scottish Government at this time. Ministers have confirmed that they will continue to closely monitor the impact of COVID-19 on Scotland’s businesses and the implementation of DRS.

As Scotland’s Deposit Return Scheme becomes law, Zero Waste Scotland will continue to support industry moving forward by sharing information and engaging as needed.

I hope you are keeping safe and well.

Yours,
Jill Farrell

Chief Operating Officer
Zero Waste Scotland

Covid-19 safety concerns see BAMA Innovation Day cancelled

The British Aerosol Manufacturers’ Association (BAMA) annual Innovation Day has been cancelled, the association confirmed today, 29 April.

BAMA hopes to be able to bring you the presentations which were planned via a series of Innovation Webinars during the coming months. Invitations will be sent out to BAMA Members after discussion with those who were due to present at the event in July.

Patrick Heskins, chief executive of BAMA, said: “It is with great regret that the decision has been taken to cancel this year’s Innovation day and I know many regular delegates as well as speakers from across the industry will be disappointed.

“BAMA remains indebted to all those who had prepared to participate as well as to the Royal Armouries for working so positively with us to help organise an alternative date which unfortunately cannot now go ahead. We take the health and safety of our members and delegates extremely seriously, and, after discussions with the Royal Armouries, we have agreed that to have suitable social distancing measure in place, whilst still giving both delegates and presenters the chance to meet and interact was not possible. It is in this context that we have taken the decision to cancel this year’s event.

“We will be returning to the Royal Armouries on Wednesday 21st April 2021 and I have every confidence that next year’s event will continue to build on the success of previous years. I look forward to welcoming the industry’s most creative manufacturers and influential thought leaders once again.”

Details of the Innovation webinar will be issued in the coming weeks.

If you would like to register your interest in the webinars or would like to participate in next year’s Innovation Day, please contact Sally Tilbury at sallytilbury@bama.co.uk, or call 020 7828 5111.

BAMA Filling Figures 2019

NEW FIGURES ILLUSTRATE AEROSOL INDUSTRY’S RESILIENCE

Statistics announced by the British Aerosol Manufacturers’ Association (BAMA) reveal 1.521 billion cans were filled in 2019, marking a small drop compared to the previous year’s record performance.
Amidst the uncertainty posed first by Brexit and now by COVID-19, the filling figures for 2019 have been welcomed by industry, reflecting the sector’s resilience and the continued popularity of the aerosol format with consumers.

As in previous years, the personal care sector accounts for the largest volume of products, with anti-perspirants still the biggest seller in this sector and across the industry overall.
BAMA data shows that 484m anti-perspirants were manufactured in 2019, an increase of 7% on 2018 figures while haircare products also saw an increase of 3% pointing to continued innovation, particularly in dry shampoos, with products such as waterless mousses and dry conditioners gaining in popularity.

Patrick Heskins, BAMA Chief Executive, said: “The UK aerosol industry showed it’s resilience despite the uncertainty surrounding trading and political matters throughout 2019.
“In spite of the closure of one of the UK’s major filling companies, and the uncertainties created by the decision to leave the EU, aerosol filling in 2019 only showed a reduction of 1% compared to 2018.
“Looking ahead, COVID-19 presents an altogether different challenge for all of us but the figures prove that the aerosol industry is nothing if not innovative and resilient.”

Production of personal care aerosols continues to dominate UK aerosol manufacturing with more than 74% of the cans filled in this category. The on-going trend for men to sport beards however saw a drop in the production of shaving foams and gels.

Volumes in the household sector remain strong at just over 17% of the total and production of household products into spray cans, particularly air fresheners, increased in 2019. There was also continued growth in the volume of OTC medicines dispensed as aerosols.

The volume of industrial and automotive aerosols filled dropped as a result of some production moving overseas after the closure of McBride in Hull. This, in addition to the drop in shaving preps being filled, caused a shift in the proportion of tinplate and aluminium aerosol cans being used with aluminium now accounting for 57% of the market, up around 7% on last year.

Patrick added: “Aerosols will continue to provide a convenient solution for both commercial and consumer use. I have no doubt we will continue to see sustained growth in the household products and hard surface cleaners for instance, as well as personal care products. Further growth in medical and pharmaceuticals also seems very likely in the years ahead.
“In the face of unprecedented and continued market challenges as well as an uncertain political landscape, the aerosol industry has continued to perform strongly and has clearly demonstrated its significance in UK manufacturing and to the wider economy once again.”

(COVID-19): Free UL safety data sheet for Hand Sanitiser, in the language of your choice

Businesses all over the world are beginning to manufacture hand sanitizers to meet the critical need. For manufacture and shipment of such products, a Safety Data Sheet (SDS) is required, but many new manufacturers lack the expertise to create these required documents.

The World Health Organization (WHO) provides a “Guide to Local Production: WHO-recommended Handrub Formulations” that contains specific formulations for both ethanol-based and isopropanol-based hand sanitizers. Additionally, in the United States, under the current public health emergency the U.S. Food and Drug Administration (FDA) has issued a “Policy for Temporary Compounding of Certain Alcohol-based Hand Sanitizer Products During the Public Health Emergency”.

Following the specifications set forth in these documents, UL has created an SDS for both the ethanol-based and isopropanol-based hand sanitizer formulas that comply with both WHO recommendations and FDA requirements.

UL, states that safety is at the heart of their mission and drives every decision they make. they applaud the many groups who are stepping up to increase the supply of hand sanitizer in their communities and want to make their job easier. UL Safety Data Sheets are available in the relevant regional Globally Harmonized System (GHS) formats, and what’s better, they are currently offering them free of charge.

To obtain your free copy of an SDS, please complete the request form and email your completed request form to the email address provided. You will then receive your Safety Data Sheet in PDF format via email within two business days.
Link to Request form: https://msc.ul.com/wp-content/uploads/2020/04/UL-WHO-Formula-Hand-Sanitizer-SDS-Request-Form.pdf

EC Guidance on applicable legislation for hand cleaners and hand disinfectants

Guidance on the applicable legislation for leave-on hand cleaners and hand disinfectants (gel, solution, etc.)1

BACKGROUND

Following the spread of the Coronavirus (COVID-19) disease many actions have been carried out in EU to prevent and reduce the transmission of the virus. This includes enhanced hygiene practices. As preventive measure against the spread of Coronavirus (COVID-19) disease, the European Centre for Disease Prevention and Control recommends “Washing of hands with soap and water for at least 20 seconds, or cleaning hands with alcohol-based solutions, gels or tissues is recommended in all settings”.

The use of hand cleaners and hand disinfectants in forms of gels, hand wipes or other leave-on products has increased dramatically in the last weeks and this has resulted in general shortages across most EU countries. Several economic operators, mostly SMEs, are investing/considering to shift production chain and increase production of Hand cleaners and Hand disinfectants to respond to the additional needs in the context of the current Coronavirus crisis. In that sense, we have noticed a steep increase in the submission to the Cosmetics Product Notification Portal under the Cosmetics Regulation (Article 13) and related questions on the applicable legislation. In fact, according to several factors (e.g. claims, composition and purpose of use), hand cleaners and hand disinfectants are subject to different legal frameworks: Cosmetic Products Regulation or Biocidal Products Regulation.

Clear guidance for economic operators on the applicable legislation and related requirements is urgently needed. This guidance is based on existing practices and practical examples. In particular, while normally soap is a cosmetic product, other products such as alcohol-based solutions, gels, hand-cleaners, hand-disinfectants, etc. might require further clarification.

Q1: WHICH ARE THE APPLICABLE EU LEGAL FRAMEWORKS IN THE CASE OF ALCOHOL-BASED SOLUTIONS, GELS, HAND-CLEANERS, HAND-DISINFECTANTS?

These products can be subject either to Cosmetic Products Regulation or Biocidal Products Regulation (normally only one legislation should be applicable to a product).

This depends first of all on the presence of an active substance and the main purpose of the product:

Products supplied with a main or exclusive cosmetic purpose (i.e. cleaning or cleansing the skin notably in absence of water rinsing) are covered by the Cosmetics Regulation.

1 N.B. These Guidelines are intended only to facilitate the application of Regulation (EU) 1223/2009 on cosmetics products, and Regulation (EU) 528/2012. However, the Commission accepts no responsibility or liability whatsoever with regard to the information in this document. This information is:
• of a general nature only and is not intended to address the specific circumstances of any particular individual or entity;
• not necessarily comprehensive and complete;
• not professional or legal advice.

Products containing an active substance and supplied with a primary biocidal purpose (i.e. intended to control harmful organisms) are not covered by the cosmetics legislation and therefore fall within the scope of the biocides legislation. Examples include products containing an active substance and making a claim to improve public health through the control of infectious organisms, such as “disinfecting”, “kill viruses”, “kill bacteria”, which would go beyond the general perception of personal hygiene and can include antibacterial hand gels.
Therefore:
• When their main purpose is to cleanse or clean the skin they are probably subject to the Cosmetic Products Regulation.
• If no main purpose is declared and such products contain an active substance and are marketed with any claims of biocidal activity or specific effects of reducing cross- contamination, they would be probably subject to the Biocidal Products Regulation.

Q2: WHAT KIND OF CLAIMS WOULD SUPPORT A COSMETIC PURPOSE AND CLASSIFICATION FOR HAND CLEANERS?

Although the claims themselves are not the only decisive factor whether the product should be considered as covered by the Cosmetics Regulation or the Biocidal Products Regulation, they are a relevant indication of the purpose of the product. “Physically clean / visually clean” and “Hand cleaner” are typical claims where the function is in line with the definition of a cosmetic product with respect to cleaning and improving the appearance of the hands or body. The product will have to comply with the Cosmetic Products Regulation.

However, if the product is presented with a claim stating “Hygienically clean” (or similar wording), the function ‘hygiene’ might indicate in this context that it could be considered as biocidal. The term hygiene has a broad spectrum of meaning which range from simple cleanliness to disinfection, depending on the context in which it is used. While in the context of cosmetics, the term normally refers to ‘personal hygiene’, i.e. products for cleaning and keeping in good condition the skin, in a context of biocidal products, the term ‘hygiene’ is associated with ‘disinfection’.

It is therefore important to look at all the characteristics of the product, and in particular its composition, the purpose and the function of the product. If it is clear that the product is mainly intended to protect public health through biocidal action (e.g. disinfecting, antimicrobial/virus function), which would go beyond the general perception of personal hygiene, and the objective criteria for considering such a product as “biocidal product” are fulfilled, the product cannot be considered as a cosmetic product and will have to comply with the Biocidal Products Regulation.

Q3: WHAT KIND OF CLAIMS WOULD PRELIMINARILY SUPPORT A CLASSIFICATION AS BIOCIDAL PRODUCT CLASSIFICATION FOR HAND-CLEANERS AND HAND-DISINFECTANT?

The following list of examples is established solely on the basis of product claims. Claims may be a strong indication of the intended product purpose and will therefore help in forming a preliminary assumption on a product’s regulatory status. However, it is important to assess all the characteristics of the product, including its composition, the purposes of its use and the mode of action on the harmful organism, on a case by case basis before making a final decision.
The following claims would preliminarily suggest that the product is a biocide covered by the Biocidal Products Regulation:

• “Antibacterial”
• “Unique antibacterial formulation.”
• “Kills bacteria”
• “Kill bacteria/a wide range of germs and words having the same meaning”
• “Antiviral” and words having the same meaning
• “Kills viruses, Virokill” and words having the same meaning
• “Effective against flu virus H1N1”
• “Effective against coronavirus”
In these examples, the product clearly makes a claim of general human hygiene through skin disinfection, and hence a claim to protect public health through biocidal action. In this case, the biocidal function is likely to be considered as the main function to which the cosmetic function has become secondary. In consequence, if the product contains an active substance and has the required function, the product would be excluded from the scope of the Cosmetics Products Regulation, and would need to comply with the Biocidal Products Regulation.

Q4: I AM A COMPANY PRODUCING COSMETICS, AND I WANT TO MANUFACTURE “HAND DISINFECTANTS” TO HELP IN THE CONTEXT OF AN EPIDEMIC. WHAT SHALL I DO TO BE ALLOWED TO SUPPLY SUCH “HAND DISINFECTANTS” (ON THE MARKET TO THE GENERAL PUBLIC, TO PROFESSIONALS, TO MEDICAL CARE FACILITIES ETC.)?

The supply of “hand disinfectants” is subject to rules established under the Biocidal Products Regulation. You are advised to contact first the national competent authorities on biocidal products in the Member States where you intend to make such a supply2. These authorities will be able to guide you on steps to follow, in particular to obtain an authorisation or an emergency permit if considered necessary by the Member States.

In particular:

– if your hand disinfectant would contain active substances still under examination in the “review programme” set out in Regulation (EU) No 1062/2014 (see Annex II), your hand disinfectant would have to be placed on the market in the Member States subject to compliance with the national rules, and possible derogation therefrom.
– If your hand disinfectant would contain active substances which have been assessed and approved under the Biocidal Products Regulation, the Member States would normally need to grant an authorisation in accordance with the Regulation. Member States can also grant you an emergency permit under Article 55(1) if they consider it necessary to allow your product on the market especially in the context of the current Covid-19 crisis.

You can check the situation of active substances on the European Chemicals Agency website: https://echa.europa.eu/fr/information-on-chemicals/biocidal-active-substances

Further useful links :

• Information on the cosmetic legislation : https://ec.europa.eu/growth/sectors/cosmetics_en
• Information on the biocidal products legislation :
 https://ec.europa.eu/health/biocides/overview_en
 https://echa.europa.eu/regulations/biocidal-products-regulation
 https://echa.europa.eu/de/contact/bpr
http://echa.europa.eu/web/guest/support/helpdesks/national- helpdesks/list-of-national-helpdesks

2 The list of Member States competent authorities on biocidal products can be found here : https://echa.europa.eu/fr/contacts-of-the-member-state-competent-authorities ;
and here : https://circabc.europa.eu/w/browse/73cc1500-d360-4f43-98be-863713c4dd8d