Following nearly 2 years of political unrest, the UK is drawing ever closer from leaving the European Union. Although we currently stand at only having 2 months left before departing, it remains unknown as to whether we will leave with any kind of deal, let alone a good one. We remain hopeful with the continuing developments that parliament can still secure a deal that invites the least amount of disruption and is agreeable to all parties involved, but if this does not materialise, we at Banks & Lloyd have positioned ourselves to be able to tackle a “bad-deal” or “no-deal” Brexit. In this newsletter we hope to shed some light on how this would impact our customers.
WHAT WE KNOW SO FAR
As an importer or exporter of goods to and/or from other EU member countries, the one key benefit that has a direct impact on your supply chain management will be our current free access to the EU single Market. It effectively allows you to trade and transport goods within the EU with no tariffs or duties to pay. Should we leave the single market, then more bureaucracy and the implementation of tariffs may be put in place, slowing down the speed at which you can move your goods and increasing the costs to do so.
The UK is scheduled to leave the EU at 11pm GMT on Friday 29th March 2019.
There are rumours that the EU may decide to allow a delay in the Brexit proceedings as the date draws closer. With no such thing confirmed however, we should treat any suggestion of a delay as hearsay until a solid, published statement indicates any new dates for withdrawal. In the meantime, we would highly recommend to stick to planning towards the current date of 29th March 2019.
After months of negotiation the UK and EU had agreed a Brexit deal. The government, however, did not pass the deal. A meaningful vote was due to take place initially on the 11th December 2018, but was delayed until the 15th January 2019, where it saw a historically crushing defeat. What this means overall for Brexit, we cannot say. There are suggestions that a “no Brexit” is now more likely than a “no-deal Brexit”, but we still believe preparing for a worst-case scenario is the way to approach all of this, particularly considering the proximity of the current exit date and the speed of which proceedings could all of sudden pick up. We will be watching the developments very closely and will advise accordingly as situations become apparent.
It is important to have a clear understanding of what the first day of a “no-deal” Brexit would look like. HMRC has published multiple documents outlining such things. You can find these items here – Partnership Pack
It can be quite hard to digest and filter all the documents into what is relevant for yourself. Thankfully the Government have also released a tool to help locate any such documents more easily. You may still return with what feels like an overwhelming amount of information, but we highly recommend finding time to go through as much as you can. The tool can be found here – Prepare your business for leaving the EU
We have consolidated the information to make it as digestible as possible, and have listed below the key points you will want to consider if EU members play a key part in your supply chain management. It is not a “one glove fits all” situation however, which is why we recommend you still use the tools provided by the government to be as best prepared as you can or alternatively, if you have any specific scenarios or concerns that are not covered here, to contact us.
NO DEAL BREXIT CHECKLIST
Before importing goods from a member of the EU you will need to have a UK Economic Operator Registration and Identification (EORI) number. You will need an EORI number to continue to import goods after 29th March 2018. If you are currently importing goods from outside the EU you should already be EORI registered. It’s a very simple process and is the first step you should take to minimise disruption should we leave the EU with no deal in place. Follow the link to the GOV website to get registered – EORI Registration
You will be subject to customs clearance in the same way that businesses currently do when importing goods from outside the EU. This means that you will need to make an import declaration for goods entering the UK from the EU.
You should consider how you will submit import declarations and it is up to you whether you chose to make declarations yourself or have Banks & Lloyd complete these on your behalf. Keep in mind that Banks & Lloyd process customs clearance all in house, simplifying the entire process, and should you wish to discuss this further then do not hesitate to contact us. If you do choose to do it yourself, you will need the right software and the necessary authorisations from the HMRC.
Under current rules for goods moving between EU countries there are no customs duties and no routine intervention during the movement of goods.
For goods entering the EU’s Customs Territory from the rest of the world an import declaration is required and any customs duties must be paid.
However, in the event of a “no deal Brexit”, goods imported into the UK from the EU will be subject to the same requirements that apply to any other non-EU member, including payment of duty.
Ahead of the current exit date of March 2019, the UK Trade Tariff, detailing the import duty rates and rules that will be applicable to each type of goods, will be made available free on GOV.UK.
The government has announced that in a “no deal Brexit” scenario it will introduce postponed accounting for import VAT on goods brought into the UK. This means that UK VAT registered businesses will be able to account for import VAT on their VAT return, rather than paying import VAT on or soon after the time the goods arrive in the UK. This will apply for both imports from the EU and non-EU countries.
It is unknown what the level of disruption at major UK ports will be, but we expect immediate short-term disruption whilst the UK adjusts to life outside of the EU, in the event of a “no-deal Brexit”.
It is recommended that our customers ensure they have the appropriate steps in place to cope with potential severe delays to their goods entering the UK, and have the correct stock levels to deal with any delays.