In the event of a ‘no-deal’ Brexit, UK businesses trading with the EU will need to have a UK Economic Operator Registration and Identification number (EORI) number to continue trading. Customers and suppliers based in the EU will need an EU EORI number to import / export goods to/from the UK.
The BCC successfully campaigned for the government to automatically issue VAT registered businesses that currently trade with the EU with an EORI number rather than simply wait for them to apply. However, businesses that are not VAT registered and trade with the EU will still need to register for an EORI number. You should also check that your EU supplier has an EU EORI number to enable them to be able to continue to send the goods to the UK.
If you are a Non-VAT registered company that trades with the EU, has your business registered for an EORI number to continue trading with the EU in the event of a no deal? UK Government guidance on EORI numbers: Get a UK EORI number to trade within the EU.
Traders are strongly encouraged to apply for Transitional Simplified Procedures (TSP) to make it easier to import goods from the EU. To register for TSP click here
Do you have a member of staff knowledgeable in customs and export?
Would it be valuable to train a member of staff in this area?
Imports from third (non-EU) countries
If your business imports goods such animals and animal products from non-EU countries, these imports will need to be notified through the UK’s new Import of products, animals, food and feed system (IPAFFS). Full guidance from Defra about non-EU imports can be found here: https://www.gov.uk/guidance/importing-animals-animal-products-and-high-risk-food-and-feed-not-of-animal-origin-if-the-UK-leaves-the-EU-with-no-deal
Imports from EU countries
In order to minimise disruption, the UK has been granted continued access TRACES, the EU’s import notification system. This access is for some EU imports only. The commodities this affects include live animals, germinal products, certain animal products and animal by-products imported to the UK from the EU. The UK will have access to the same or equivalent information on TRACES for these consignments that it does now.
The UK will retain access to TRACES until later this year. This means that you should continue with the current processes for notifying authorities and raising the required certification on TRACES including:
The UK’s listed status application has been agreed by EU Member States after it met the animal health and biosecurity assurances required for a third country to export live animals and animal products.
Full guidance from Defra about exporting animals and animal products can be found here: https://www.gov.uk/guidance/exporting-animals-animal-products-fish-and-fishery-products-if-the-uk-leaves-the-eu-with-no-deal
To export animals and animal products to the EU your consignment will need to:
Chambers of Commerce are able to provide both ongoing support and relevant training. Find your local Chamber here.
HMRC have announced a programme of training and IT support for customs intermediaries in December. The purpose of the training is to give traders an understanding of how to compile the information needed for simple import and export customs declaration entries.HM Treasury and HMRC announced a one-off investment to support broker training and increased automation. As part of this investment, funding has been set aside for grants to help meet the upfront costs of employee training and IT improvements: https://www.customsintermediarygrant.co.uk/
There are a number of duty relief schemes available to UK businesses.
It may be worthwhile for your business to consider applying for these:
There is also a trusted trader scheme – Authorised Economic Operator (AEO) – that may be relevant to you if your supply chain also takes part in it. Please speak to your local Chamber to learn more about these.
Will your business handle new Customs and Safety and Security Declarations in-house or with a third-party?
If your business is exporting live animals or animal products, do you have the right documentation (e.g. Export Health Certificate, Catch Certificates, equine/plant IDs)? And are your drivers aware of the required documents?
If you are importing certain types of food and feed of non-animal origin, you may be subject to increased import controls. Have you considered the requirements for certain types of goods to enter through Border Inspection Posts and/or Designated Points of Entry?
Will I need a duty deferment account and a Comprehensive Customs Guarantee (CCG) to continue to trade with the EU after exit?
With the exception of CTC movements, HMRC is giving importing businesses until 30 September 2019 to get a guarantee in place to cover any additional duties that they need to defer.
After 30 September, a duty deferment account will be needed to be backed by guarantees but this will not need to be a CCG. Traders could instead go to their bank to guarantee their duty deferment account without the need for a CCG. We will commit to provide 12 months’ notice if the CCG requirement is to be reintroduced.
Furthermore, for at least 12 months after exit, there will be suspension of the mandatory requirement for businesses to provide a guarantee in order to be authorised to declare goods for:
Do you plan to apply for additional customs relief or trusted trader schemes from HMRC? Read more about them at www.gov.uk/duty-relief-for-imports-and-exports & http://www.gov.uk/guidance/authorised-economic-operator-certification
You can now register for simplified import procedures if the UK leaves the EU without a deal: https://www.gov.uk/government/news/hmrc-outlines-extension-of-transitional-simplified-procedures
After the UK leaves the EU, commercial drivers operating in the EU may need to take the following actions:
The Department for Transport have published guidance on these areas here:https://www.gov.uk/guidance/driving-in-the-eu-after-brexit#vehicle-insurance-for-uk-registered-vehicles-in-the-eu
The UK Government has indicated its intention to secure the benefits of existing EU trade agreements with other countries. However, businesses may need to consider a scenario where the terms were to change and preferential trade terms are no longer available.
Current progress in agreeing continuity agreements with third countries:https://www.gov.uk/guidance/uk-trade-agreements-with-non-eu-countries-in-a-no-deal-brexit
Do you import or export using lower duty rates (‘preferences’) provided by the EU’s existing trade agreements?
How might changes to, or the ending of, these preferential rates impact you?
If you are supplying to a partner in the EU who is exporting to a third country with which there is an agreement, please be aware that EU firms have been encouraged to look for EU-only (not UK) content to be able to benefit from lower tariff rates. Consider if there is any way for you to mitigate this.
After the transition period, the Protocol on Ireland/Northern Ireland will apply. The Protocol will see Northern Ireland following EU Single Market rules for goods, remain aligned to EU rules on customs and VAT, while still remaining part of the UK’s customs territory and VAT area, and still able to benefit from UK trade agreements. There will also be a ‘consent mechanism’, with the Northern Ireland assembly given an opportunity to periodically vote on whether it wants this set of arrangements to continue.
If there’s a no-deal Brexit in December 2020, businesses will no longer have access to the EU’s import system TRACES (Trade Control and Expert System). For imports from non-EU countries, businesses will need to use the UK’s new Import of Products, Animals, Food and Feed System (IPAFFS) for imports of live animals, products and by-products of animal origin subject to veterinary checks, high-risk food and feed, and germplasm.
For imports from EU countries, IPAFFS will initially not be used to notify of EU imports and the IV66 form must be used instead.
Are you familiar with the guidance published by DEFRA?
Your business should consider
Are you familiar with INCOTERMS?
Knowing the International Terms and Conditions of Service will help you set the right contract terms to reflect potential changes of status (becoming an exporter/importer) once the UK leaves the EU.
With potential customs checks between the UK and the EU, there may be delays at the border.
The potential of customs checks to cause delays at the border will depend on how new policies are implemented in practice: customs checks are typically risk-based rather than universal. As yet there no details on how enforcement might be executed in practice.
How resilient is your supply chain to potential border delays?
Do any contracts you have include penalties for late delivery? You may want to discuss with your logistics provider whether you would require new arrangements.
Do you need to increase your inventory and/or buy additional storage space?
Even if the UK has a zero-tariff trade agreement with the EU, companies will need to prove that their product is of UK origin to benefit from this (usually, this means that 50-55% of the product has to be locally sourced). The exact terms of these rules between the UK and the EU are yet to be negotiated.
If you are a supplier, has your customer asked you to provide proof of where you source your content? Would you be able to provide it if asked?
If you buy your components from local suppliers, have you thought about conducting an audit of where they source their materials?
The British Chambers of Commerce has been advocating for zero tariffs on trade between the UK and the EU after Brexit.
However, businesses should consider the potential impact of a situation where there are tariffs between the UK and the EU – based on the EU Most Favoured Nation (MFN) tariff (which applies to countries that do not have a special agreement with the EU).
Do you know the HS codes (international classification system) for your products? Do you know the EU MFN tariff that is applicable for your product?
If the UK and the EU do not reach an agreement that removes all tariffs, what would the impact of the MFN tariff be on your cost base?
Have you assessed the potential impact of the proposed temporary tariff regime on imports in the event of a no deal: https://www.gov.uk/guidance/check-temporary-rates-of-customs-duty-on-imports-after-eu-exit
HMRC has published an information pack to help businesses plan ahead plan for the contingency of a ‘no deal’ EU Exit: https://www.gov.uk/government/publications/partnership-pack-preparing-for-a-no-deal-eu-exit
UK Government technical notice on trade remedies if there's no Brexit withdrawal agreement: https://www.gov.uk/guidance/trade-remedies-investigating-dumped-or-subsidised-goods
In a no deal scenario your business will need to check the tariffs on exports to the EU before the UK leaves:https://ec.europa.eu/taxation_customs/business/calculation-customs-duties/what-is-common-customs-tariff/taric_en
As a ‘third country’, UK exporters to the EU after Brexit may in future be required to make customs declarations.
What customs procedures do you comply with for trade with non-EU markets?
Are you ready, if the need arises, to apply these to imports from or exports to the EU?
HMRC has published an information pack to help businesses plan ahead plan for the contingency of a ‘no deal’ EU Exit. https://www.gov.uk/government/publications/partnership-pack-preparing-for-a-no-deal-eu-exit
To register for the HMRC’s EU Exit update service for future guidance and updates: on GOV.UK, search for ‘HMRC videos, webinars and email alerts’, click to register to get business help and education emails, enter your email and select ‘EU Exit’.
See the UK Government's technical notice on trading with the EU if there's a no deal Brexit: http://www.gov.uk/government/publications/trading-with-the-eu-if-theres-no-brexit-deal
See the UK Government's technical notice on exporting controlled goods if there's a no deal Brexit: https://www.gov.uk/guidance/exporting-controlled-goods-after-eu-exit
Arrangements for importers or exporters, using roll on roll off ports or the Channel Tunnel to transport goods between the EU and the UK in the event that the UK leaves the EU without a deal: https://www.gov.uk/government/publications/communications-pack-roll-on-roll-off-ports-and-eurotunnel-in-the-event-of-a-no-deal-eu-exit/information-for-users-of-roll-on-roll-off-ports-and-eurotunnel-in-a-no-deal-scenario
If the UK leaves the EU without a deal there'll be changes to how businesses trading in excise goods (alcohol, tobacco and certain oils) move and declare these goods. Businesses would no longer be able to use the Excise Movement Control System (EMCS) to move excise duty-suspended goods to the UK from the EU: https://www.gov.uk/guidance/moving-and-declaring-excise-goods-in-the-event-the-uk-leaves-the-eu-with-no-deal