As we move towards the end of negotiations it is clear from the reports from Brussels and the UK that we are in a very dangerous time with a high risk of Brexit happening on March 29th 2019 almost by virtue of the fact that time is running out to agree a deal.
With Article 50 triggered, if a Withdrawal and Transition Agreement is not signed off by the EU and Westminster then the UK will simply stop being an EU Member State on 29th March 2019 at 23.00.
What does this mean?
As we have outlined in previous newsletters this will mean that the UK becomes a non-EU country and will have to be treated as such for imports and exports. Therefore at 23.01:
- Customs Declarations will be required
- Veterinary Checks will be required
- Duty rates will be imposed
How can businesses prepare for this situation?
With a short time frame now left the answer is simply to prepare your business to ensure you are able to import and export from a Non-EU Country. Key steps which can and must be taken at a minimum are:
- Ensure your tariff classifications are 100% correct
- Ensure you have a clearance agent to lodge Customs Declarations on your behalf
- Prepare an application to obtain a Deferred Payment Account, discuss and agree a guarantee provision with your bank, and have the application ready to lodge by end of the year if no-deal has been agreed.
There are no real costs to points 2&3 and point 1- Classification – is a requirement regardless of when the UK ultimately leave and is consequently work which will ultimately be required.
Therefore in terms of investing management time at this point, we would strongly recommend that businesses who are now seriously looking at preparing for the possibility of a Hard Brexit for the first time, start working on ensuring they have all UK imports and exports assigned a Tariff Code as a matter of urgency.
Finally if you need to act as the importer/exporter in both the UK and the EU you will now need a GB Registration (possibly EORI) and an EU validated EORI going forward. A business can get an EU EORI without a Vat registration or establishment but when requesting this in the UK, HMRC look for details of a shipment pending.