Brexit Guide for the Music Industry
All companies – no matter how big or small – will be required to complete Customs Declarations if they are importing or exporting to/from the EU from 1st January 2021.
That means almost every retailer which sells to European consumers, wholesalers who are importing products from Europe or manufacturers who export their goods to the EU will need to take urgent action to get themselves ready for Brexit.
Each MI business is unique and will therefore need to complete a number of bespoke tasks. The MIA is here to help all companies within the music industry to minimise the disruption to your people and on your trade by providing a summary of the guidance below.
For specific enquiries, the Government’s Brexit helpline is available on 0300 332 9434 (Monday – Friday, 8am-6pm) or via Webchat
We recommend you follow these key steps straightaway – time is running out:
1) Create a personalised transition plan for yourself or your business on gov.uk
2) Whether importing or exporting, you MUST have an EORI number starting with GB and it takes at least week to get one so Apply NOW! Once you’ve applied you can validate your 12-digit EORI number (normally GB + 9 digit VAT number + 000).
4) Export VAT – from 1st January 2021 you may be able to charge Zero-rated VAT to your customers on your exports (see paragraph 3.3 and 3.4).
5) Importing Goods – complete this important checklist. Also reach out to your European suppliers to understand what arrangements they’ll be making for UK customers.
6) Customs Declarations – whether importing or exporting goods you will need to declare their value for VAT and duty. You can declare this yourself or appoint someone (such as a freight forwarder or customs agent) to do it for you. You’ll also need to create commercial invoices (see below).
7) The UK Global Tariff will replace the common external tariff on goods you import which affects the import duty you’ll pay. In the music industry, this will often mean you’ll pay just 2% import duty – but check the UK Global Tariffs carefully as there are exceptions which may mean you pay more or even 0%.
8) The Commodity Code is the unique 10-digit number you will need to put on your customs declarations. Make sure you know the Commodity Code for the products you are importing or exporting. Musical instruments normally start with 9207 whilst Musical instrument cases start with 4202 for example.
9) Having the correct documentation will be critical to avoid delays in imports and exports. The Commercial Invoice will become a vital document needed to clear your goods promptly through customs, not just making sure you get paid. It will need to include a lot of additional information such as Buyer’s and Seller’s EORI number, Commodity Codes, Incoterms, Country of Origin, etc.
10) Many of the traditional shipping companies have developed systems and processes to reduce the burden of paperwork and red-tape for businesses however this may come with additional surcharges on shipments in addition to duties and taxes. Make sure you look at resources such as Preparing for Brexit with UPS, Fedex Brexit Checklist, DHL Are you Ready for Brexit, Kuehne+Nagel Brexit Support Guide, to name just a few.
11) Your staff – if you or any of your team are EU, EEA or Swiss citizens, then there are important steps for them to complete. Support your EU staff to apply to stay in the UK with the EU Settlement Scheme. If you plan to hire staff from the EU, then you need to know about the new Points-based immigration system.
12) After Brexit, GDPR will still apply in UK law, but if you receive personal information on EU consumers you may need to update your procedures – but the EEA hasn’t quite decided yet so may be things will stay as they are. The Information Commissioner has developed a tool to develop the standard contractual clauses you may need in just 5 minutes. Look out for further updates on the EU’s data adequacy assessment of the UK.
13) The way Intellectual Property will be managed after Brexit depends how you’re protecting your IP. Basic patent law in the UK will not change following Brexit. The UK will continue to be a contracting state to the European Patent Convention, the international agreement that established the European Patent Office, which oversees European Patent applications. But for trademarks the situation will change so it might be better to apply for trademarks before 31 December 2020 if you can! Contact your IP specialist for further advice or the MIA can recommend someone for you.
14) Any additional costs including export charges, freight forwarder fees, import duties, paperwork, etc must all now be considered in the total costs of your goods and services to/from the EU.
Other Useful Resources
British Chambers of Commerce Checklist
British Retail Consortium
Federation of Small Business
Last updated 18th January 2021