Customs checks simplified in the event of a no deal Brexit
13 February 2019
With the clock now ticking on the 29 March deadline, we’re here to tell you about some news, that provides some clarity in amongst the continuing Brexit negotiations.
In case you’ve missed it - it has been announced by HMRC that in the event of a ‘no-deal’ Brexit, customs checks will be simplified. This is aimed at making importing easier and preventing major disruption at the UK’s key entry points. To ensure businesses can take advantage of the new policy, known as the Transitional Simplified Procedures (TSP), businesses need to register from now (7 February).
What’s been announced?
In the event of a no-deal Brexit, HMRC has developed the Transitional Simplified Procedures (TSP) for customs, which will streamline importing for an initial period of one year. Following the announcement, the government has already sent 145,000 letters to businesses currently doing business with the EU to let them know about the new rules and what they need to do to prepare.
In the event the UK leaves the EU without a deal, without TSP many UK businesses would need to apply the same procedures to EU trade that apply when trading with the rest of the world. This would be both a costly and time-consuming process because goods are not released from customs control until full import declaration is made, and the duty is paid in full.
Businesses that register for TSP however will be able to transport goods from the EU into the UK without having to make a full customs declaration at the border. They will also be able to postpone paying import duties.
How does it work?
The proposed changes mean that importers can defer giving a full declaration until after the goods have crossed the border. Importers would simply need to file a "simplified frontier declaration" (a very short customs form) up to two hours before crossing the Channel by ferry, for example, or one hour via the Eurotunnel: trucks would then be able to drive straight into the UK without any further paperwork being reviewed at the border.
The importer would then be required to update the computer entry within 24 hours to tell HMRC the goods had arrived, and the duty would be payable as long as a month after the shipment had entered the UK.
Does TSP apply to all ports?
TSP applies to RORO (roll-on/roll-off) entry points and Eurotunnel, with the following points of entry known to be covered:
- Ramsgate (TBC)
Is TSP definitely confirmed?
It states on the gov.uk website that:
“HMRC has put in place Transitional Simplified Procedures to make it easier for you to import goods from the EU using roll-on/roll -ff (RORO) locations like Dover or the Channel Tunnel.
“Leaving the EU with a deal remains the government’s top priority. This has not changed. However, a responsible government must plan for every eventuality, including a no deal scenario. Businesses and citizens should ensure they are similarly prepared for leaving the EU.
“HMRC is helping businesses get prepared and, amongst other significant communications, has written three times to affected businesses, each time stepping up the advice and encouraging them to take action. This latest letter and new gov.uk guidance announces Transitional Simplified Procedures for EU trade which will ease the transition, especially for businesses new to the rules associated with importing.”
Will TSP last indefinitely?
If required after 29 March, TSP will be reviewed three to six months after it’s introduction and if HMRC then decide to withdraw, they will give businesses a 12-month notice period. It is hoped that this process and contingency period will give organisations enough time to prepare their business to follow the import processes necessary for trading with the rest of the world.
What are the limitations of TSP? Things to consider
The important thing to remember is that TSP has been set-up to ensure the continuous movement of goods, but this only applies to goods moving in one direction. The primary aim of TSP is to avoid congestion at the ports on arrival to the UK, but it does not cover exports. This means uncertainty remains, about how goods will be transported between the UK and the EU, in the case of a no deal.
However, probably one of the most important considerations in all of this, is understanding the cost and time implications TSP could cause further down the line in your supply chain. In delaying customs entries, this could mean instructing a customs agent to manage documents twice, or even three times, to complete the process.
Though TSP will simplify processes at the port and avoid congestion, when speed is of the essence, some organisations may be better off considering other options to road, such as agile air-connect or air-charter services. To help with this, organisations should also really consider how robust their technology is to cope with such an eventuality as a no deal Brexit, and think about appointing a customs agent if they don’t already have one in place.
What do we do now?
There are some key steps you can take to ensure that you are ready for this:
- Register for your EORI number: You can register for TSP from 7 February 2019 and an EORI number will be required to do so. It’s free to register for an EORI number and the online EORI application form takes just ten minutes to fill out
- Register for TSP: you can do this here
- Set-up a deferment account with HMRC
- Get ready to make declaration through a customs agent. Carousel will be recommended our agent shortly.
- Speak to an expert: Is TSP right for you and your business? The Carousel Brexit helpline can offer more support and advice.
Want to know more? Contact our Brexit helpline for more expert support and advice.
February 2020 - UPDATE SINCE PUBLICATION:
It's important to note 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 to the above, temporary tariffs and postponed VAT accounting are also currently not available during the implementation period.
For more information on this, plus much more, read of Brexit FAQs or speak to an expert by clicking the link below.
"Many businesses are still in the dark about the processes they will be required to follow after Brexit and in the case of a ‘No Deal’. While not every aspect can be known at this stage, gaining an Economic Operator Registration and Identification number (EORI) number can bring benefit to UK organisations by maintaining the continuity of trade if there is no deal. It is therefore so important that organisations act now to get prepared and get ready for the possibility of a no deal.” Tim Deniz, Head of Client Operations at Carousel.