• Brexit - Care needed RE any changes to Incoterms

Brexit - Care needed RE any changes to Incoterms

16 September 2019

Practical planning for Brexit - We are seeing many businesses trying to de-risk their business in the event of a no-deal Brexit by changing Incoterms. Seemingly small changes that businesses would normally be happy to accommodate need to be considered carefully in the context of a no-deal Brexit. We appreciate that for trade to continue post Brexit certain changes may be imposed and have to be accepted, but businesses should understand the changes they are agreeing to.  


  • If your sales are DDP ( delivery duty paid) to customers in the EU,  the business selling the goods will be deemed to be the exporter from UK and importer in EU.
  • Whoever is deemed to be the importer of goods as they cross an international border (such as UK/EU post brexit) will have the obligation to pay any tariffs due, file the export and import declarations, account for VAT etc.
  • As importer in the EU, your business will need a UK and EU EORI number.
  • If your sales are made Ex Works, your customer would be responsible for the customs declarations, tariffs, vat obligations etc.
  • You may be responsible for the Export Declaration only if delivering goods to the border, and GOV have advised that as a temporary measure no UK Export Declarations will be required re goods moving from NI to ROI – therefore you would only have a UK Export declaration in sending goods to EU (excluding ROI).
  • Therefore agreeing to deliver goods to clients premises in EU, as opposed to selling them Ex Works or delivering them to the UK/ EU border, makes the seller liable and responsible for the EU Import Tariff/ Import Declarations/ Input VAT obligations.


  • If your purchases of raw materials are currently delivered to your premises (delivered duty paid), the customs procedures, initial vat obligation and import tariff will be the responsibility of your supplier (although they may ultimately try to pass some of these costs onto you). We are advised in the latest GOV notification that ROI suppliers delivering goods to NI, would not need to register for UK VAT or charge you UK Vat on the goods ( they would account for the input vat as part of a new procedure).
  • If your suppliers were able to change Incoterms so that you as purchaser had to pick the goods up at the border you would become liable for the Import Declaration ( although not required if goods coming from ROI), UK Import Tariffs, Input vat etc (postponed accounting should apply to the Input Vat to ease cash flow difficulties). This is a considerable administrative burden for most businesses.
  • If your EU goods were to be sold Ex Works, you  would be deemed to be the EU exporter and the UK importer triggering a requirement to file EU export declarations, UK import declaration, pay the UK Import Tariff, UK Vat obligations etc. We understand that this approach may not be possible for all businesses in  a no deal brexit scenario  as currently unless you have an establishment in the EU, you can not be an exporter from the EU.

It is important that all businesses work through their potential no-deal brexit implications. The above is a brief summary of the impact changes to Incoterms could have post Brexit, legal advice may be required to review your contracts.

Please see our Brexit Planning pages for details of other areas your business should be considering and planning for in the event of a no deal brexit.