EORI stands for Economic Operation Registration and Identification. Every business owner that import or export goods with the eastern union have to mandatorily register with EORI number. As per HMRC, only 17% of businesses registered for EORI number which could lead to problems following Brexit.
In this article, we will not only read about what is EORI number but also about its applying process.
What is an EORI Number?
EORI is a 12 digit number begins with GB and very similar to the VAT number. For ex – GB245678900000. An EORI number is considered as a mandatory requirement for all those businesses who are involved in import or export of physical goods with EU countries where the tariffs are being applied.
Kindly note that custom tariffs are different from VAT charged and VAT is collected in addition to tariffs and even in a different way.
EORI number is not mandatorily required till now as majority of businesses are solely trading with EU countries because UK was part of a free trade area, if you are a member of EU. Therefore, tariffs didn’t apply. UK may continue to be a part of free trade area following Brexit if the negotiation has been made but the current UK government suggested that every business owner should get an EORI number as early as possible.
EORI number is used in custom declarations and clearance documents for identification. The UK & EU have databases of EORI number. If businesses prefer customs agents, freight forwarders or courier in order to complete customs declaration on their behalf, the agents must know EORI number to complete the paperwork.
In case you are not having EORI number, goods will not be clear by the custom department.
Does my business need an EORI number after Brexit?
EORI number is required whenever you import or export goods with any EU country. Irrespective of the size, every sole trader, partnership firm and other big companies will also require one. There are some exceptions to it and they are as follows –
- In case your business is based in northern island and you are trading in republic of Ireland, then there is no need of EORI number.
- In case you are already having an EORI number, there is no need to apply for a new one.
- In case you are having an EORI number that doesn’t start with GB issued in other country like Ireland, you can use this number for a short period after Brexit.
Does my services business need an EORI Number after Brexit?
EORI number is only needed when you physically move goods across EU/UK borders. It is not applicable on importing or exporting of services. The term “mini one stop shop” (MOSS) business applies to VAT which means any true MOSS business that involve in trading of digital services also not require an EORI.
What is the EORI application process and what details do i need?
You can easily apply for EORI number on HMRC website as it only takes up to 10 minutes. In order to apply for EORI number, you need a government gateway ID. In case you are not having the same with you, you need to apply for that first. Government gateway ID takes time as it is sent by post.
In order to apply for EORI number, following details are needed –
- Government gateway ID & password and a mobile in order to complete two factors authentication.
- VAT number & date of registration (you will find the same in VAT registration certificate)
- National insurance number
- Unique tax payer reference number (UTR) (You will find the same in your tax return)
- Standard industrial classification code (You will find the same in companies house register entry)
How long it will take to get an EORI Number?
An EORI number is received by you immediately where in case of additional checks, it may take three days. It is recommended that you apply for EORI number as early as possible.
Can i find an EORI Number by company name?
There is no way to find an EORI number by company name but some companies do provide systems that show this information.
You can easily validate whether the EORI number is valid or not. It should be in the right format and issued to an organization.
Is an EORI Number required for postponed VAT Accounting?
In order to apply for postponed VAT, you need to complete the custom declaration at the time when goods are received in UK and to clear the customs declaration, an EORI number is needed.
Without completing a custom declaration, you cannot apply postponed VAT accounting for imports.
Advice for exporting goods to EU after Brexit
As per HMRC, a business owner should either appoint a customs agent or ensure that some trained person of the business should make customs declaration.
In order to make customer declaration, a specialist software is used which link to HMRC’s computer and also ensure that the business registered for the national export system.
Hiring a custom agent considered as a best option for those who are new to working with customs tariffs & documentation.
Exporters are eligible to register and use the traditional simplified procedures (TSP) for at least 15 months after the Brexit date. It means that business can export goods across borders without making a full custom declaration.
In order to register for TSP, you must have an EORI number and a business or trading name.
HMRC also reminding businesses to follow common transit convention (CTC) which means that duty does not need to be paid until good arrive at their final destination.
CTC applies where goods start from office of departure. Your premises or your agent premises in case they or you are an authorized consigner or from a government office.
Goods need to be passed through “Office of transit” and end at “office of destination” to ensure that they are tracked correctly.