You must prepare for a no-deal brexit now

March 18, 2019 9:26 am

Around 240,000 EU trading businesses will need to submit customs declarations post-Brexit, yet just a few weeks ago only 40,000 registrations for an EORI number, meaning 200k will NOT be able to continue importing from the EU.

Theresa May has publicly stated more than 80 times that we would leave the European Union on the 29th and, despite MP’s rejecting it, it is still technically possible that we will leave at the end of this month – the law has not changed – so you need to prepare now.

The import process day1

Tariffs (no-deal brexit)

A no-deal Brexit has always meant the UK would set its own trade tariffs, and now the government has set out plans to cut tariffs to zero on 87% of the goods it imports, if the UK does finally leave the European Union without a deal.

Import tariffs give a competitive advantage to local industry because it is not subject to the tariffs. New and higher tariffs can reduce demand for some imports, while cutting tariffs can do the opposite.

WTO members have “schedules” – lists of tariffs they promise not to exceed – but can freely apply tariffs below those levels.

It looks like the new tariffs are, as a general rule, being reduced or eliminated where there are no British producers to protect.

For example: citrus fruit, olive oil and many southern European foods will have all tariffs removed, which may help lower costs in the shops.

So there are around 5,000 tariff lines that are zero and 470 with a tariff.

Follow this LINK to open an Excel spreadsheet of the 470 tariffs, to check out your commodity codes and see if any duty rates apply. If it’s not shown the rate is zero.

NOTE – These tariffs apply to EU to UK flows (excluding NI)

Customs declarations

It is important to note that customs declarations will apply to ALL imports – even if nothing is due.

You can engage your forwarder to lodge your declaration and use their deferment number, if any payments are due HMRC.

You will need a duty deferment account if you want to use the new Transitional Simplified Procedures (TSP), however under Day 1 ‘Easements’ initiatives, HMRC will not require compliance with the usual EU criteria for a customs comprehensive guarantee (CCG) and traders will have until 30 June 2019 to submit a financial guarantee to HMRC to back their deferment account.

Transitional Simplified Procedures (TSP)

Traders must obtain an EORI and register to use TSP, if they want to delay the lodging of full customs declarations.

NOTE – TSP only applies to Ro/Ro ports of entry

There are two declaration procedures:
TSP “Standard Goods” process: The trader makes a declaration directly on to their commercial records when the products cross the border. The trader will provide the haulier with their EORI number as proof the goods are subject to a TSP process. This is followed by a supplementary declaration following the arrival of the goods in the UK.

TSP “Controlled Goods” process: The trader submits a simplified frontier declaration before arrival at the border, and ensures all necessary certificates and licences are available. The reference number for this declaration is given to the haulier as proof. On arrival in the UK, the trader updates the declaration to arrive before the working day following the crossing. This is followed by a supplementary declaration, following the arrival of the goods, that customs formalities have been entered into in the UK. If the trader is already using this process, they can choose to use it for standard goods as well.

The end-to-end TSP road movement process:
1. EU exporter raises an EAD (Export Accompanying Document)
2. Exporting Customs computer generates an MRN (Movement Reference Number)
3. Driver uses MRN number to check in at the export port (He will not enter without it)
4. Driver uses TSP approved UK EORI number to board the ferry/Eurotunnel
5. Frontier declaration submitted up to two hours before boarding ferry/Eurotunnel
6. Driver moves through port to inland destination
7. Duty/VAT settlement is made on 15th of calendar month
8. Final declaration made by 4th of following month

TSP will be reviewed 3 to 6 months after 29 March 2019 and a 12 months’ notice will be given when HMG decide to withdraw or amend it

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The export process day 1

The UK’s system for the electronic processing of export, the National Export System (NES) will continue to operate in four stages:
1. Electronic submission of Export Declarations before the shipment of the goods
2. Electronic ‘Presentation’ of the goods to Customs (in CHIEF)
3. Electronic ‘Customs Clearance’ granting Permission to Progress (P2P)
4. Electronic ‘Departure’ message which puts the export into a final state on CHIEF

In a no-deal scenario, export licences (if applicable) and the registration number of vehicles arriving at the port will be required to pre-lodge the customs entry. When P2P is received, goods are to be taken to the port of exit.

It is important to recall that it is the “Goods departure message” which will serve as evidence that the goods have left the customs territory of the UK.

We recommend checking what the import process is for each EU country you export to, and exactly what documents and entry formalities will be required.

*With thanks to Robert Hardy

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