Preparing your business for Brexit: Impact on trade
With the end of the Brexit transition period now approaching for the UK, there is plenty for businesses to consider in order to ensure that by 2021 they have the procedures and systems in place to deal with changes to Brexit.
One area which will be impacted is how business is carried out and UK businesses interact with European supply chains.
Hazlewoods International team has developed a comprehensive guide to preparing your business for Brexit which you can download here.
This week, Hazlewoods Director, Dan Town has looked at what businesses trading goods should consider in the coming months to ensure they remain prepared and have a #BusinessForTomorrow.
Importing goods into the UK
From 1 January 2021, the UK will apply a UK-specific tariff to imported goods; this will replace the EU’s Common External Tariff which will apply until 31 December 2020. The tariff will apply to all goods imported into the UK unless an exception applies, for example a relief or tariff suspension, there is a trade agreement with the country you are importing from or the goods come from countries that form part of the generalised scheme of preferences.
You can check the tariff which will apply to goods imported by using the Government UK global tariff tool, which can be used by searching for a product description, an 8-digit commodity code or a combination of the two.
Import declarations
A business that imports goods into the UK will need to make customs declarations when importing goods from the EU from 1 January 2021. The rules currently support those countries outside of Europe. The company can make the declaration itself, or it can hire someone on its behalf to do it for them, for example, a courier or customs agent. Regardless, if you do this yourself or appoint someone to do it for you, before you make your first supplementary declaration you will need to have in place authorisation to use simplified declarations for imports, a CHIEF badge (Customs Handling of Import and Export Freight), software that works with CHIEF an a duty deferment account for paying any import duties and VAT.
For those businesses that decide to do it themselves, there are Government grants available for businesses who invest in training, software, and new employees.
Customs delays
One thing which has been widely commented on is the expected delays at ports in the UK as it begins to operate outside of the EU, particularly with new customs rules coming in which will apply to freight traffic. To ease the pressure, the Government has permitted that for the first six months from 1 January 2021, businesses will have time to file their paperwork and pay duties they owe after the goods have entered the UK. There is still expected to be a significant delay at the ports across the UK, especially for those exporting goods to the EU with long tail backs expected.
Businesses should assess their supply chain and consider whether alternative suppliers exist in the UK or look to forward order to compensate for these anticipated delays. Any business with EU contracts should consider whether there is any cost of delays clauses which would also need to be considered and factored into the decision making.
Opening an overseas operation
Taking the above into account, we have seen many businesses opening offices in selected EU countries that form part of their strategy to ensure they continue to have a presence in Europe. Whilst this will benefit some companies, the cost of operating an overseas company will mean different regulations to adhere to and increased operating costs. If this is something you are considering, Hazlewoods can help via our international network of professional advisers, HLB. We can support with setting up in a European country and provide advice to ensure you remain compliant with local legislation.
Overall, the way we trade in Europe is changing post Brexit and businesses need to prepare now or face running the risk of not being prepared.
For support with building your #BusinessForTomorrow and international business advice, please contact Dan Town at [email protected] or 01242 680000.
For further insights and advice to support you and your business visit www.hazlewoods.co.uk
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