NEWS\\\ What Brexit means for your business


With the UK and EU both having finally signed off on the Withdrawal Agreement, the UK officially left the EU at 11pm on 31 January. But what does this mean for business? David Miller of The Customs


People explained that the UK will enter a ‘transition period’ during which there will be no practical changes to how it


trades with the EU.


during that period, continue to remain part of the Customs Union and Single Market so the free flow of goods and people will continue as now. During the transition period,


no customs declarations will be needed to move UK goods to or from the EU and the VAT treatment of intra-EU sales and purchases will be as before. The transition period


allows the UK to agree a trade agreement with the EU without meanwhile fundamentally changing how trade is conducted. The UK will abide by existing EU laws as well as any new ones passed during that period and will have to pay into EU coffers - but without having any say in new laws being set. The transition period is


due to run until 31 December 2020 whereupon one of three outcomes are expected. Either: a free trade agreement


is agreed and signed – but the EU says this may be difficult given the short timescale;


It will,


or: there is an agreement in principle but an extension is granted to finalise it -Prime Minister Johnson has said that he does not want any extensions and that the UK will finish the transition period with or without a deal, so whether an extension does take place is open for discussion. (However, the EU has said that either side can ask for an extension of up to two years although the UK would need to ask for one by the end of July 2020.); or, the UK does not agree a free trade agreement and leaves with no- deal.


Practical considerations


At the moment it is by no means clear that a free trade agreement (FTA) will be in place and although the parties are not starting from a ‘standing start’ with the UK having been part of the EU and its predecessors for more than 40 years, such agreements take on average at least three years to conclude. But, says Miller, whatever the businesses


outcome, should


prepare for what could happen even at the earlier stages of the process including: • An FTA will of course try


and remove duties and quotas on goods traded between the UK and EU but even if that is the case, there will be a framework as to how this works and


You need it. We move it.


businesses should be aware of this when it is agreed. This is likely to be based on the ‘origin’ of goods and whether they are from a non-EU country or not the UK, it will probably be based on self-certification that all duties have been paid. • Irrespective of whether


an FTA is or is not agreed, the actual mechanism of moving goods between the UK and the EU will change at the end of the transition. Although there may


Issue 1 2020 - Freight Business Journal


be simplifications introduced in the UK [although these have not been notified as yet], any goods sent to the EU will require a customs declaration to be lodged, both on exiting the UK and on entering the EU. • Conversely whilst the UK


government has previously introduced measures around ‘no-deal’ Brexit for imports, the same broad terms will apply in that declarations will have be made to some degree. In respect of the above, businesses should take account


of the following:- - For purchases from the EU,


have discussions with partners to ensure that supplies can continue. This includes looking at terms of trade and seeing whether they need to be changed to take into account responsibilities for reporting. - For UK businesses supplying to minimise the


to the EU,


impact of Brexit on customers, look at where those customers are and where shipments are made to or from – whether B2B and B2C transactions;


3


-Identify and decide on who will be the importer into the EU – the UK business or the customer; - Consider the cost


of additional customs requirements and who will arrange and pay for this; - Consider whether the UK


business should VAT-register in the EU and the impact of this both practically and financially; and: -Have a plan formulated


and executed well before 31 December 2020.


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