From import and export tax to EU bound parcels, Brexit means you might have to do things a bit differently, whenever the actual deal (or no deal) happens. Here’s a handy guide to what you need to consider so you and your business are ready for the changes Brexit will bring.
If the UK leaves the EU with a deal, it will be easier transitioning for retailers who import and export to Europe. With a deal, little would change in the short term as the UK could stay in the customs union until the end of 2020, or possibly longer. This will allow time for a long-term agreement to be reached, and if it’s agreed in good time there should be a clear view of what the rules post Brexit will look like.
However, if the UK leaves without a deal then all the agreements currently in place under the Customs Union and Single Market would cease to exist so it’s likely that products will get delayed at borders while new processes are applied.
However, you’ll still need to make a few adjustments.
All non-EU based businesses require an Economic Operator Registration and Identification (EORI) number. So as soon as the UK leaves Europe and you become a non-EU company, you’ll need an EORI to trade with the EU. An EORI takes about 3 working days to receive, but you don’t need to wait for Brexit to happen to get one. Apply for an EORI number now.
You’ll also have to check that your importer has an EORI number too.
Global import rules will apply to UK-EU trade if a no-deal Brexit goes ahead. If you already export and import outside the EU, you’re in a good position. You’ll already have a customs agent or software to help you and you can apply this system to EU countries (though see point 5 for changes to non-EU trading).
Post-Brexit, imported goods won’t be released from customs control until you’ve made a full declaration and paid customs duty. Making declarations is time consuming. If you want to do it yourself, you’ll need to purchase special software that can submit to the Customs Handling of Import and Export Freight (CHIEF) system and apply for access to CHIEF as a starting point.
Many businesses hire a third party to handle all customs declarations. This can be done using EU established freight forwarders, customs agents, or fast parcel operators. Ask business contacts who already trade globally to recommend someone.
Alternatively, you can buy more time before deciding how to deal with import declarations by registering to use the Transitional Simplified Procedures . These temporary procedures will help smooth the transition post-Brexit by allowing businesses to pay tax later so that goods aren’t held up, giving time to sort out a customs agent or software. If you import regularly, it will also be worth setting up a duty deferment account so you can pay all your customs duties on a monthly basis.
To speed up exporting, you may be able to use the Common Transit Convention (CTC). CTC rules allow a delay in paying customs (until it reaches the destination rather than at the border). Before exporting, you’ll also need to make an export declaration. Find out what you need to register for the National Export System (NES) to make an export declaration. If you’re completing transit declarations, you’ll need to have your EORI, then get a guarantee (either an individual guarantee for single exports or imports – or a comprehensive guarantee if you’ll be importing or exporting regularly) before finally registering for the New Computerised Transit System to make transit declarations.
You can check the temporary rates that will be put in place if the UK leaves the EU with no deal at the GOV.UK website. These could change but will allow you to approximately budget in the extra costs. The best thing to do now is to sign up for the government email updates, so if they change the rates or the plans you’ll be the first to know.
The rules and processes for VAT IT systems will change for businesses that:
If you already use the MOSS system and want to continue, you must register with an EU member state, but you can only do this after Brexit happens. Alternatively, you can register for VAT in each EU country where you make sales of digital services.
Be aware that if you want to claim a refund for any EU VAT, you’ll need to submit your claim by 5pm on the day of Brexit.
Depending on what you import, you may need to change labelling on your goods, bring the goods into a different UK location or apply for new licences. You can use this online checklist to get instant guidance at https://www.gov.uk/prepare-business-uk-leaving-eu.
You may also need new export licences, although these should only apply to restricted good such as firearms, food, and medicines. Check if they apply to your products here.
Unfortunately, all existing trade agreements with the UK will no longer apply post-Brexit when the UK is no longer a part of the EU trade agreement. The government are renegotiating trade agreements, with some already in place. You can check which countries have a new trade agreement with the UK, or what stage they are at.
If there is a country you want to trade with that has no trade agreement in place at the time of Brexit, you can trade under World Trade Organisation rules and use Most Favoured Nation tariffs. Go to guidance on MFN tariffs for in-depth information.