Preparing for a no-deal Brexit DRIVING LIFELONG PROSPERITY
Winter 2020
With little remaining flexibility in the Brexit timetable, is your business ready for the possibility of a no-deal exit? Nearly four years in the making, the Withdrawal Agreement is finally progressing through Parliament with the potential for a final agreement to be in place by 31 January.
remaining before the Bill is passed into UK legislature, and the further hurdle of it being ratified by the European parliament, a no-deal Brexit on 31 January remains a real possibility.
If this Agreement is successfully ratified, the UK will remain part of the single market and customs union until 31 December 2020, giving UK companies a temporary reprieve on any changes to their trade with the EU27.
This could mean that from 11pm on 31 January, any trade between the UK and EU27 will be subject to the import and export customs registrations, paperwork and duties that you would expect to encounter when trading internationally.
However, with numerous stages
For companies who are already
experienced with international trade, say with the US, China or Australia, this could be a relatively straightforward transition. If your company has not yet traded with the world beyond the single market, this extra administrative burden may be daunting. The key to thriving post-Brexit will be a thorough understanding of your business, an accurate and up-todate knowledge of the changing requirements, and an open mind to adapting your trade.
UNDERSTANDING YOUR CURRENT BUSINESS MAP OUT (LITERALLY!) YOUR CURRENT SUPPLY CHAIN •
Where are your customers and suppliers?
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Where else do your trading partners have operations?
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Which countries do your raw materials and finished products pass through en route?
CHECK THE SMALL PRINT
LOOK FOR WEAK POINTS •
Where are shipments likely to be delayed? (ports, borders)
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Will contractual penalty clauses be triggered by delays?
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Can your customers source from within the EU?
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What deadlines and timescales are you responsible for meeting?
DO NOT MISS THE OPPORTUNITIES!
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Who is responsible for
• With many businesses unprepared for a no-deal
www.hazlewoods.co.uk
Brexit, if there is resilience already built into your supply chain this could be a significant selling point as your customers and suppliers look to reduce uncertainty, so make sure you’re shouting about it!
shipping and dealing with issues in transit?
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Once you have conquered post-Brexit trade with the EU27, if it is not already, this could be a great time for your company to broaden its horizons to trade with other countries around the globe.
NAVIGATING THE NEW PROCESS 1. MAKE SURE YOU ARE REGISTERED
duties arising at each border crossing.
Importers You will need to pay customs
Ensure that your business has an EORI number that starts with GB and check that your customer/supplier has an EU EORI number.
Importers: Take advantage of the transitional simplified procedures to delay your declaration and paying import duties.
Read our article on EORI numbers here: http://bit.ly/Hazlewoods_EORI
Check whether any additional licences, certificates, labelling standards or other restrictions will apply to your specific goods. Detailed Government guidance is available on these issues.
duties on all imports (as well as excise duties on any alcohol, tobacco or biofuels), but the ability to use postponed accounting for VAT will be introduced for all imports, such that import VAT will be accounted for on the business’ VAT return rather than being physically paid as a separate item to HMRC.
2. COMPLETE THE PAPERWORK You can do this yourself or appoint a customs agent to make the declarations for you. Varied types and levels of assistance are available to suit your business. BusinessWest, or your local Chamber of Commerce, will be able to provide more tailored guidance. If your goods cross multiple EU borders, you may be eligible to use the Common Transit Convention to minimise the paperwork and
3. CUSTOMS, DUTY & VAT
Exporters Supplies of goods will be zerorated but you may need to register for VAT in each member state, for example to deal with supplies from ‘call-off’ stocks. For services, the current rules for place of supply will generally apply as if EU customers were third country customers
Temporary tariff rates will be applied in the period after a no-deal Brexit. Detailed tables of rates applicable to different items are published by the Department for International Trade. Do not forget that these changes to imports will apply not only to goods from EU member states, but also from non-EU countries where currently the UK trades under an EU agreement.
For guidance tailored to your business, please get in touch. Whilst the guidance here is correct at the time of printing, it is likely to change over time – see the up-to-date Government guidance on great.gov.uk.
In addition to our in-house experts, we are ideally placed to help you grow across borders through our membership of HLB, the global advisory and accounting network, with member firms across the EU.
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SCOTT LAWRENCE Partner 01242 237661 scott.lawrence@hazlewoods.co.uk
JULIAN MILLINCHAMP VAT and Indirect Tax Director 01242 237661 julian.millinchamp@hazlewoods.co.uk
RUSSELL FLAGG Manager 01242 237661 russell.flagg@hazlewoods.co.uk
Windsor House, Bayshill Road, Cheltenham, GL50 3AT Tel. 01242 237661 www.hazlewoods.co.uk / @Hazlewoods This newsletter has been prepared as a guide to topics of current financial business interests. We strongly recommend you take professional advice before making decisions on matters discussed here. No responsibility for any loss to any person acting as a result of the material can be accepted by us. Hazlewoods LLP is a Limited Liability Partnership registered in England and Wales with number OC311817. Registered office: Staverton Court, Staverton, Cheltenham, Glos, GL51 0UX. A list of LLP partners is available for inspection at each office. Hazlewoods LLP is registered to carry on audit work in the UK and regulated for a range of investment business activities by the institute of Chartered Accountants in England & Wales.
GLENN COLLINGBOURNE Director 01242 680000 glenn.collingbourne@hazlewoods.co.uk