Is Your Business Brexit Ready?
The UK left the European Union on 31 January 2020 and the Brexit transition period ends at 11pm on 31 December 2020. During the transition period trading between the UK and EU will remain unchanged.
The ending of the Brexit Transition period brings significant changes for logistics and supply chain operations, with customs formalities required on all goods moving between the UK and EU.
Over 150,000 businesses in the UK trade with the EU and many will need to submit customs declarations and security filings for the first time.
The Overall Impact of Brexit
Brexit impacts all businesses trading with the EU and will require over 200 million additional customs declarations per annum. Expertise is in short supply and customs agency capacity does not exist today to deal with the expected increased volume of customs declarations.
Put simply, if you trade goods with the EU, then from 1 January 2021 those goods will need to have import or export declarations covering their movement in/out of the UK. In addition, if you trade between Great Britain (GB) and Northern Ireland (NI) then goods moved into NI will require a Movement declaration. Regardless of any Free Trade Agreement the requirement for declarations on goods moving between the UK and EU will remain.
As well as customs declarations for the goods, the end of the transition period will also bring in the need for Safety and Security fillings for their movements.
The Unique Implications of Brexit
Changes caused by Brexit will impact a number of processes, but the most widely impacting change is the need for:
- Import and export declarations, and
- Safety and Security fillings
for all goods traded between the UK and the EU. Much talked about in the media in the run-up to Brexit has been the inevitable delays that will occur for vehicles arriving at UK ports from the EU. Planning for these delays is a key aspect of any Brexit Transition plan and there are mechanisms available today that can help to greatly reduce or eliminate these delays, see External Temporary Storage Facility (ETSF).
Other significant areas impacted include:
- Movement of goods under transit
- Authorised Consignee/consignor status to ease movement through RoRo ports
- Duty rates on UK goods into EU and changes to rates on goods into the UK
- Mandatory or recommended Pre-Arrival Import Declarations
- Movement of excise goods
- No low value consignment relief on VAT into the UK for e-commerce
- Postponed accounting of VAT
No matter how large or small your business, anyone trading with the EU from the UK will be affected by Brexit. This includes:
- eCommerce retailers
- Freight Forwarders
- Logistics Service Providers
- Food & Agriculture
Brexit Timeline & Milestones
The UK left the European Union on 31 January 2020 and the Transition Period will end on 31 December 2021. The UK Government have formally confirmed to the EU that they will NOT be requesting an extension to the transition period and will not agree to one should the EU request it. The EU in turn has acknowledged and accepted this position.
“I want to reiterate the Government's position on the transition period created following our withdrawal from the EU. Transition ends on 31 December this year. We will not ask to extend it. If the EU asks we will say no...” ~ David Frost, HM Government Chief Brexit Negotiator
A Phased Approach
The UK Government have announced a phased approach to the UK’s exit from the EU, however the key requirement is that all goods imported or exported UK-EU will required customs declarations from 1 January 2021.
The detail of this is:
- UK export declarations to the EU will still be required from 1 January 2021.
- From 1 January 2021 standard UK imports will have access to a process known as CFSP EIDR (Customs Freight Simplified Procedures, Entry In Declarants Records). Certain goods (e.g. excise goods) are excluded and will require frontier declarations. Under CFSP EIDR you have up to six months to present the import entry. However, records must be kept of arrivals.
- Open CFSP EIDR will be turned off from 1 July. Frontier declarations will be required in all cases from 1 July 2021 unless traders have a specific authorisation.
- SPS (Sanitary and phyto-sanitary products of animal origin, plants, vegetables, fruit and produce) controls will be relaxed initially, except for live animals and high-risk plants.
- From 1 April 2021 SPS will require health certification and pre-notification (IPAFFS) but very few physical checks will take place.
- From 1 July 2021 full SPS checks will be in place.
- S&S (Safety and Security) declarations will be required on UK imports from 1 July 2021.
For anyone trading in or with Northern Ireland the phased approach does not apply to Imports into Northern Ireland (as that is under EU UCC rules) nor does it apply to EU import / export declarations.