Brexit Day has been and gone. So, what happens now?
10 February 2020
The UK's exit from the EU is now very much a reality.
31 January or ‘Brexit Day’ marked the UK’s official exit from the EU and the start of the period of consultation to get a trade deal done with the EU before the end of 2020. Though nothing really has changed, this update is just a quick reminder of where we are and what happens from now on.
If you need support getting your supply chain ready for Brexit, click here or call +44(0)1795 508142 to speak to one of our expert team.
Where are we now?
From 1 February the UK is no longer a member of the EU, and we’ll enter an implementation period that lasts until 31 December 2020.
From a trading point of view, nothing will change for the next 11 months, as the UK works on reaching a trade deal with the EU. This means EU rules for customs, VAT and excise will continue to apply to the movement of goods and trade for this limited time. There will be no new customs procedures at present.
What does that mean for my imports and exports?
From a trading point of view, nothing will change until a trade deal can be reached. Carousel can confirm that we will not be changing our export and import requirements in the foreseeable future and you should carry on sending time-critical freight as normal.
Can a 'Hard Brexit' still happen?
While we are in this transition period the UK Government will negotiate with the EU to decide what tariffs and processes will be applicable from midnight 31 December 2020 onwards. There are still discussions to be had on things such as what constitutes a level competitive playing field and over fishing rights, financial services, data protection, and the jurisdiction of EU law.
Despite the transition period however, it is important to bear in mind that a ‘No Deal’ scenario is still a possibility. The Government has previously said that this current transition period will not be extended, so there is a chance a Hard Brexit could happen. Nevertheless, Carousel will keep a watching brief on this to help our clients prepare for all scenarios, no matter what happens.
Has anything changed?
There is one change to be aware of, and that is that previously introduced easements, such as TSP (Transitional Simplified Procedures) have now been suspended. (Update from HMRC on 30 January 2020). They are no longer available until the Government provides a confirmed directive. If you’ve already applied for this service, we recommend you keep all paperwork safe until more details are known.
In addition, temporary tariffs and postponed VAT accounting are also currently not available during this implementation period.
Get prepared: have you done the essentials?
While it is a case of wait and see, there are some questions you can ask yourself now and these are:
1. Have you appointed your customs broker?
To avoid any unnecessary clearance delays, we recommend all Carousel clients use us and our partners for all customs clearance work. There are some documentation you need to complete to appoint Carousel as your customs agent. Please speak to your Key Contact if you're unsure of what to do.
2. Do you have your Economic Operator Registration and Identification (EORI) number?
You’ll need a UK EORI number that starts with the letters ‘GB’ to be able to submit customs declarations to move goods between GB and the EU after the implementation period ends. If you already have a UK EORI number starting with ‘GB’, keep it safe as you will need it when the implementation period ends. If not, you should register for one at www.gov.uk/eori. Don’t worry, it’s quick and easy to do.
3. Have you reviewed your Incoterms?
Under current arrangements, a business which imports from the EU will not pay customs duties because the UK is part of the EU Customs Union. But in a "no deal" Brexit scenario, tariffs are likely to be payable. Be sure to review Incoterms as part of your Brexit preparations. Some terms may incur costs before the details of a possible agreement and future legislation in the UK are fully known.
4. Are you CFSP registered?
Administered by HMRC, Customs Freight Simplified Procedures (CFSP) is an electronic customs system for imported third country goods. It allows faster release of goods from countries that are not members of the European Community. CFSP isn't compulsory but you may find it useful. Speak to us if you'd like to find out more about this.
If you need help with answering the above questions or getting prepared, click one of the helpful links below.