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As the Brexit deadline looms, importers and exporters should make preparations to trade with a non-EU country, advises BDO’s Carol Lynch

As the UK’s Brexit negotiations move towards a conclusion, it is clear from reports emanating from Brussels and London that there is a high risk of a hard Brexit, not least because time is running out to agree a deal. With Article 50 triggered, if a Withdrawal and Transition Agreement is not signed off by the EU member states and Westminster, then the UK will simply stop being an EU member state at 11pm on 29 March 2019.

The problem for businesses at this point is whether to continue to prepare for March 2019 or hold off on the basis that political discussions will be successful, and no change will be required until January 2021.

The approach being taken by most companies is to implement the minimum amount of planning to ensure that this can be utilised should things take a turn for the worse. As the work required is the same, regardless of the time frame, this ‘no regrets policy’ is seen as the best option.

How Can Businesses Prepare?

Prepare your business to ensure you are able to import and export from a non-EU country. The key steps which can and must be taken at a minimum are:

In Association with

1. Ensure your tariff classifications are 100% correct.
2. Ensure you have a clearance agent to lodge Customs Declarations on your behalf.
3. Prepare an application to obtain a Deferred Payment Account, discuss and agree a guarantee provision with your bank, and have the application ready to lodge by end of the year if no deal has been agreed.

There are no real costs to points 2 and 3 and tariff classification is a requirement regardless of when the UK ultimately leaves the EU.

In terms of investing management time at this point, we would strongly recommend that businesses that are now seriously looking at preparing for the possibility of a hard Brexit start working on ensuring they have all UK imports and exports assigned a Tariff Code as a matter of urgency.

If you need to act as the importer/exporter in both the UK and the EU, you will now need a GB registration (possibly EORI) and an EU-validated EORI going forward. A business can secure an EU EORI without a Vat registration or establishment, but when requesting this in the UK, HMRC look for details of a shipment pending.

Post-Brexit Scenario

In a post-Brexit scenario, goods will be required to move via Customs Transit in order to avoid being hit with customs duties on entry into the UK and, again, on entry into Ireland/the EU.

This procedure currently applies in the EU to Union goods where they are moved from one point to another within the customs territory of the Union and pass through a country or territory outside that territory- for example, Switzerland - without any change in their customs status.

The general rule is that goods placed under the Common/Union transit procedure together with the corresponding documents shall be presented at the customs office of arrival. However authorisation as an authorised consignee allows a company to receive the goods at their premises, or at any other specified place, without presenting them at the customs office.

It is important to note that a customs guarantee is required to secure all charges on the goods while in transit.

The UK has applied to re-join to the Common Transit Convention when it leaves the European Union, which means that we would expect the above processes will be in place post-Brexit.

• Carol Lynch (pictured) is a Partner in BDO Customs and International Trade.

www.bdo.ie
Email: clynch@bdo.ie
Tel: (01) 470 0420