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BREXIT AND COURIER FIRMS

PART 2

HOW TO PREPARE YOUR BUSINESS FOR BREXIT

With 70% of exports and imports currently entering and exiting the UK at border control in Calais; businesses would be forgiven for worrying over the possibility of this agreement ending with the Brexit ‘deal’.

brexit  brexit boxing gloves

Soft Brexit = UK remains in the Single Market. This would still allow free movement and may not appeal to the Brexiteers. Though this does mean that little would change for the importer/exporter.

Hard Brexit = UK leaves the Single Market. Pre-Referendum the Conservative Government ‘predicted’ that this would mean £11bn in new tariffs and a 30% rise in the cost of some imports. Increased costs are almost a certainty should a ‘Hard Brexit’ be the result of the negotiations, but will it be as uncomfortable as predicted?

Currently = There are no tariffs, taxes, clearance charges to be paid or custom check forms to fill out when exporting/importing with the EU.

Some positive news = Due to the fall in the value of the pound, imports and exports are currently up. But how long can this last?

PROTECTION FROM THE UNCERTAINTY

What steps can businesses take to ensure that they are as protected as possible from uncertainty and as prepared for any increased rates? And what information will they need to know?


1. EORI Number: Anyone importing commercial goods from outside the EU will need one of these. Apply for one here: https://www.gov.uk/eori

2. If we leave the Single Market then it is likely that you will need to build in extra charges (to your customer) to cover the tariffs, taxes, clearance charges and increased transport costs.

3. VAT: Currently goods don’t have to wait at the border for VAT to be paid. Acquisition VAT is accounted for on the next VAT return. Hard Brexit = the VAT is due before the goods are released. This means issues with cashflow and possible delays – which could mean increased costs to deal with the complexities of border controls. With a Soft Brexit = no charge.

4. Custom Codes: You will need to research the codes that are relevant to your business.

5. Carnet: you may need to use a carnet for any goods that aren’t for sale. It is a temporary goods passport for anyone outside the Europe importing/exporting to the EU.

6. Custom Invoice: You will need to familiarise yourself with this paperwork - it is for any consignment travelling outside the EU/into the EU following a ‘Hard Brexit.’

7. EFTA: The UK was a co-founder of this back in 1960, but left to join the Europe Union. If we negotiate to become part of the ‘Europe Free Trade Agreement’ with Norway, Switzerland, Liechtenstein and Iceland we will keep access to the Single Market, but it will also allow us to keep our sovereignty. The EFTA is the fifth largest trader in trade in services, the ninth in the world in merchandise trade and the third most important trading partner in the EU in terms of goods. So, this could be the best bet.

For Part 1 on this topical story.

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