‘Avoiding Brexit’s impact is not an option, but don’t panic’
THE EXPERTS’ GUIDE TO ENSURING YOU ARE PREPARED
What changes at the end of this year?
The UK left the European Union in January 2020, but we are currently in a transition period, during which many things have remained the same. This changes in January 2021, and there are huge implications.
These will include changes to the tariffs paid and the paperwork needed if you are importing or exporting goods, while you will also need to check the status of staff from the EU to ensure they can work. Other things that will change include taxes and duty, safety standards and requirements around personal data.
What hasn’t yet been decided?
We do not currently have a new UK-EU trade deal – negotiations on this are ongoing. If a deal is not implemented then our goods travelling to the EU will be subject to tariffs and border checks under the rules of the World Trade Organisation, while the UK would decide which checks to apply to EU goods. Even if we have a deal, it is not yet known what might be covered in it in terms of the aviation sector and haulage, and there might not be time to cover all of the details before the deadline.
What differences could it make to my business?
Experts say that, deal or no deal, the impact on businesses will be huge. Mark Elward is the chief commercial officer at Huboo, a fulfilment technology provider. He says that retailers who sell to Europe will have to ‘maintain separate inventory on either side of the border’ if they want to go on shipping to mainland Europe, not to mention complying with a raft of additional red tape – from gathering country-specific VAT and tax numbers and harmonised system codes to providing customs clearance documents. ‘A no-deal Brexit also has the potential to wipe out an entire generation of small businesses that will now remain UK-only or, worse, fold altogether,’ he warns.
Simon Dixon, founder of supply chain and logistics advisers Hatmill, says that 150,000 British businesses will be exposed to the need for customs formalities for the first time. ‘Traders in the EU and GB will have to submit customs declarations and be liable to goods checks,’ he says.
‘HMRC estimates a five-fold increase to the annual number of customs declarations required – an additional 200 million declarations a year.’
If you employ EU citizens, they will also need to apply to stay in the UK.
What does the government say I should do?
The government’s Brexit website (gov. uk/transition) has a number of checklists for businesses, depending on their circumstances.
One of the most important things to do, if you import or export goods across the UK border, is to get an EORI number that starts with GB, which can take a week. You can also sign up for support for moving goods through Northern Ireland at the Trader Support Service website (tradersupportservice.co.uk/tss).
Completing the questionnaire should give you an idea of which changes apply to you and whether you need special licences (for example for exporting chemicals) or to apply for other permissions.
What else should I consider?
Experts say that there are many steps you can take now, despite the uncertainty, to ensure that you can trade as smoothly as possible post December 31. Andrew Black, supply chain expert and principal at procurement experts Efficio, says that understanding your supply chain is key. ‘Not all markets are the same, and so Brexit will have different impacts and present different challenges. For example, a reduction in the supply of labour from Poland versus an increase in lead-time for goods delivered from France will impact a business in very different ways,’ he says.
‘As part of this process, chief procurement officers need to be prepared to engage more extensively with their inbound supply chains and to ensure open communication about potential impacts and the mitigating actions that are being undertaken to deal with them.’
Mark at Huboo says companies may want to look at hiring someone specific to deal with transition-related admin, and says there are grants available to help with the burden.
‘Businesses need to work out now who is dealing with the new administrative challenges. There’s going to be an incredible amount of additional systems, processes, checks and tariffs, gathering country-specific VAT numbers, tax numbers and harmonised system codes, providing customs clearance documents and much more. Many businesses aren’t equipped to deal with these extra tasks and they may need to look at hiring someone.’
Steve McCrindle, VAT partner at accountancy firm Haines Watts, says that ensuring you have the correct VAT number and help with UK customs is key. ‘Avoiding Brexit’s impact on your business is not an option, but don’t panic.
‘All you need is the ability to get goods into the UK and/or out into the EU without glitches from January 1, 2021, even if the solution is a temporary one,’ he says.
‘Invest in the advice and structuring/planning that will get you a permanent operable solution as soon as you can. But remember that your business is unique and you need a solution that is tailor-made for you. Always keep things simple, or as simple as possible.’
Chris MacNeil, who runs Brexit readiness consultancy Resiliencehelp.com, says it’s important to ensure you have the right product labelling agreements and adds that you will probably need to register with a customs broker. He says: ‘Without a trade deal to replace the current arrangements, mutual recognition of things like technical assessments of product standards or product labelling agreements will end. The onus will be on you as the e-seller to obtain necessary product certifications, licences and/or permissions from relevant Intellectual Property owners.
‘You will need to understand rules in each EU country and must check every regulation around your business and the products you sell to find out whether you need separate licences or certificates for the EU market.’
Where can I get help?
Preparing for transition is daunting, but there are places to get help.
‘For advice, help, and moral support, I’d urge businesses to contact their Department of International Trade area representative, their Chambers of Commerce and other businesses who are going through similar challenges,’ says Sara at Babycup.
There is also a gov.uk helpline available Monday-Friday, 8am–6pm on 0300 2000 900 as well as the website, gov.uk, with details of the grants you can apply for to help your business get Brexit ready.