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Policy & Compliance
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New policies, easements and procedures for a no-deal Brexit
A number of border ‘easements’ have been announced by the government which will smooth some of the burdens of Brexit. They are explained here
The UK government, being aware of the potential difficulties at the UK/EU border, has prepared a number of ‘easements’ to simplify the border formalities and alleviate the financial burden on businesses trading with the EU. The intention of this article is not to present the
details of each of these procedures but rather to draw attention and raise Members’ awareness as each can be a valuable means of streamlining the logistical process after the Exit Day.
TSP Government’s flagship policy for the post-Brexit border congestion is without doubt the Transitional Simplified Procedures, most commonly referred to as TSP. Originally designed to address the potential
issues at ro-ro crossings such as Dover, it was subsequently revised to include inventory-linked locations such as sea- and airports. HM Revenue & Customs (HMRC) also made it possible to use TSP in combination with transit, although at the time of writing this article it was still unclear how the inventory would be released. TSP, in its essence, resembles Customs
Freight Simplified Procedures (CFSP) whereby the frontier declaration is simplified and the follow-up supplementary declaration is accompanied by the actual fiscal calculation of taxes. In the case of ‘standard goods’, the TSP frontier declaration has been simplified to an entry into a declarant’s record where the declarant is the actual trader/importer and the declaration is not submitted to the Customs Handling of Import and Export Freight (CHIEF). For controlled goods, there will be a requirement to submit a simplified CHIEF declaration followed by a supplementary declaration. The supplementary declaration containing the particulars of the shipment would then be sent by the fourth working day of the month following the arrival of the goods into the UK. Freight forwarders should be aware that they
would not usually be the actual TSP-registered trader unless they are the importer, but in most
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cases they would act as agent, submitting supplementary declarations on behalf of their customers (TSP-registered traders). TSP has clearly some potential to alleviate the
border congestion on the UK side. Additionally, by delaying the moment when duties and taxes are paid, it helps importers with their cashflow which otherwise could be impacted by the requirement to pay import duty and import VAT. It is, however, a temporary measure and traders need to be aware of this in their logistical planning.
Postponed VAT Accounting (PVA) Another policy designed to help traders at the frontier and to alleviate cashflow issues that would otherwise arise in the event of no-deal Brexit is Postponed VAT Accounting. Businesses registered for VAT in the UK will
be able to account for import VAT on their VAT returns, which means they will not have to pay import VAT at the UK border. It is important to remember that PVA is only
available to VAT-registered businesses, and that private importers or business not registered will still have to pay import VAT at the point of import. Members should also be aware that they will
need to obtain a positive confirmation from the importer wishing to use PVA. BIFA recommends that this becomes part of clearance instructions or representation empowerment.
Temporary Entry Summary Declarations Waiver for EU imports Members are aware of the current requirement to submit an Entry Summary Declaration for rest-of-the-world imports (export ENS being usually incorporated into the export declaration). This requirement will also apply to the EU trade after the UK leaves the Union, but unlike many customs procedures associated with Brexit it went largely unnoticed despite its potential to complicate the border situation even further. BIFA, together with other business
representatives, has long been asking the government to consider a waiver of the ENS requirement and the government agreed to a temporary suspension of the requirement for EU traffic only. The current arrangement will allow businesses to import goods from the EU without a need for an ENS declaration for 12 months after the exit day. BIFA hopes to see this extended even further, but we realise that this is subject to additional agreements and regulations. An ENS declaration will still be required for all imports from outside the EU, just as it is now. Members should also be aware that a similar
arrangement will not be reciprocated on the EU side of the border and an ENS declaration will be required for imports into the EU. This requirement will, in particular, impact vehicle operators who in many cases will become ‘carriers’ responsible for declarations.
Conclusion EU Exit is an unprecedented event and because of this it is difficult to predict future trade patterns and behaviours. It is, however, clear that the current trade arrangements built on the premise of the Single Market and the Customs Union will need to adjust to the new reality. The easements and new procedures
presented by the government have the potential to address some of the issues associated with leaving the EU without a transitional agreement, but some of them are only temporary which means businesses will still need to prepare for more conventional customs procedures in the not too distant future.
October 2019
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