manufacturing Post Brexit Britain – keep calm and keep preparing
Manufacturing firms across the UK were, at the time of going to press, bracing themselves for a hard Brexit, so what does ‘no-deal’ mean for businesses who buy and sell goods intra-EU? Kate Arnott, partner and head of manufacturing for MHA MacIntyre Hudson in the Thames Valley takes a look at some of the issues
While official guidance from the Government on preparing for ‘no-deal’ was published in August 2018, the complexity of some of the information makes it difficult to truly understand how best to prepare. In the event of ‘no-deal’ the UK effectively becomes a third country, which may mean that businesses will be required to submit import and export declarations in respect of the movement of goods within the EU. Other considerations will be the continuity and speed of supply chains as well as changes to statutory obligations, processes and procedures.
In the background, the UK has submitted draft new national schedules of tariffs and equivalent charges on UK imports of goods to the World Trade Organisation (WTO), to come into effect when the UK leaves the EU. Without a future economic and trade agreement with the EU, UK exports to the EU may be subject to tariff rates charged by the EU. The UK may also charge tariff rates on imports from both the EU and countries outside of the EU which would form the basis of any subsequent UK trade tariff.
HM Treasury and HMRC will lay a number of statutory instruments (SI) under the Taxation (Cross-border Trade) Act 2018 and the EU Withdrawal Act 2018. Details have already been published along with an impact assessment for the movement of goods if the UK leaves the EU without a deal. They are designed to broadly align and mirror the current EU legislation.
Our view is that customs duty suspension regimes will be vitally important in preventing a potential double duty dip. These require care and attention to implement but as customs duty is an outright cost to business, the payback is well worth the effort. Being a holder of such a regime marks out the business as proactive, compliant and forward thinking, which will be important to future success in whatever brave new world awaits us.
If you would like to discuss your Brexit strategy or need help planning, we have a highly-experienced team. Our customs duty expert Lucy Sutcliffe, is a senior HMRC Brexit strategist and led its customs team dealing with authorised economic operator (AEO) and duty suspension regimes and our VAT team, led by Alison Horner, works closely with our VAT experts in jurisdictions across the globe. We would be delighted to introduce you. Do get in touch.
Kate Arnott
01494 441226
kate.arnott@
mhllp.co.uk macintyrehudson.co.uk
Brexit action plan
Register with HMRC for an Economic Operator Registration and Identification (EORI) number which is unique to each business, which you will need in order to trade.
Verify whether the goods you export to the EU will require a licence or are subject to any special rules in respect of their movement.
Establish the correct commodity code for your goods. This will assist you to identify the amount of UK import duty payable, if duty can be suspended, if you can apply for any preferential duty rates and whether you may need an import licence.
Consider how you will make your declarations to HMRC and whether this will be facilitated through a third party, such as a freight forwarder or a customs broker.
Establish the correct customs procedure code for your goods. If you choose to make your declaration via a third party, you will need to provide clear instructions relating to the treatment of your goods.
Consider whether you are eligible to apply for and use any customs procedures which may provide relief from the payment of duty to HMRC. These provisions may include: use of, or approval to operate, a customs warehouse facility, temporary admission, inward processing relief, outward processing relief, authorised use, transit procedures and temporary storage facilities.
Consider your incoterms or shipping terms. The shipping terms agreed between the contracted parties ie the supplier and purchaser may denote the risk and liability for the movement of the goods, including the liability for any UK import duty.
Establish the correct valuation for your goods, which will be used when UK import duty is calculated.
If your supply chain is going to evolve and you will import direct into Europe for your European market, VAT registration in the country of importation may be necessary.
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businessmag.co.uk
THE BUSINESS MAGAZINE – MARCH/APRIL 2019
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