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.