David Miller, customs and AEO Consultant and co-founder of The Customs People, explains what UK exporters must do now to ensure that their goods move through customs as smoothly as possible in the event of a No Deal Brexit
Oct 17 2019 / Brexit Analysis
This article is the view of the author and not necessarily of Ready for Brexit
Despite reassurances that the Government is in negotiations with EU leaders, the prospect of a No Deal exit on 31st October is still very much on the cards. Businesses are running out of time to prepare for this scenario, and must act in the coming days or it could be too late. I have personally dealt with dozens of businesses of all sizes in recent months; from global brands to SMEs, and they all share common concerns about how their company will cope in the months ahead.
While the business owners I meet with are already underway with preparations, worrying statistics suggest that a huge proportion of firms are still failing to take even basic measures that will minimise the impact that a No Deal Brexit will have. Any British business that deals with imports or exports should have an Economic Operator Registration and Identification (EORI) number in order to move goods in and out of the EU after Brexit. Government data estimates that approximately 250,000 British firms require EORI numbers, but just 71,000 registrations had been made by mid-August, suggesting that the vast majority of businesses were slow in acting – or failing to act at all.
The Government subsequently introduced auto-enrolment to ensure firms were registered in time, but the fact this step was required is of huge concern to me. If businesses cannot even take the basic step of getting an EORI number, how can they be expected to make more complex preparations?
Transitional Simplified Procedures
The next measure that is essential to Brexit preparations is Transitional Simplified Procedures (TSP), which was introduced by the Government earlier this year. TSP is free and will allow goods to pass through customs more quickly when Brexit takes place. With ports expected to face huge delays after Brexit, this simple measure could make a huge difference to the potentially costly wait times that export firms have to deal with. Goods will move freely at import even without TSP, but you could face compliance consequences if no declaration is made. It can take a fortnight for the Government to process applications for TSP and the wait time could well increase if there is an influx of last-minute requests. With less than two weeks remaining until the 31st October Brexit deadline, it is crucial to act now, or risk running out of time.
British exporters must also urgently liaise with their customers to establish exactly who will carry out imports to the EU post-Brexit. Some British firms that I work with are attempting to break down barriers to trading by paying duty costs and clearance costs for their EU customers. This is in a bid to avoid losing business to EU counterparts, but it could prove to be an expensive move for British businesses.
It is equally important to maintain regular conversations with carriers and suppliers, to make sure that they have their own preparations in place for every eventuality. This should happen on an almost daily basis over the coming fortnight, in anticipation of any last-minute developments or indeed ahead of a No-Deal Brexit at the end of the month.
Temporary Customs Duty Rates
The Government has implemented Temporary Customs Duty Rates in the event of a No-Deal Brexit and these have recently been updated. They are available to view online on the Government website and businesses must keep abreast of the changes to see how their goods could be affected.
Finally, businesses should consider applying for Authorised Economic Operator (AEO) status, which indicates that their role in an international supply chain is secure. This measure will stand firms in good stead for Brexit and beyond. HMRC states that the accreditation is a key way to reduce delays at ports, which could not only save businesses time, but also potentially save money in the longer term.
We might not know exactly how the UK’s relationship with the EU will look beyond the 31st October, but preparing for the worst-case scenario of a No-Deal exit will put British businesses in the best position to handle what will undoubtedly be a challenging era for the nation’s economy.