The UK has made its well-documented – and long-awaited – exit from the EU, but what does this mean for businesses that deliver goods between the UK and the EU? Right now, not a whole lot. That’s because we’re in a “transition period” where the old rules continue to apply.
However, as the purpose of this transition period is to enable the UK and EU to negotiate new arrangements, you need to know how to best prepare your company for the final Brexit.
The UK Government’s website explains that the transition period will end on 1 January 2020, when the new rules will enter force. However, as those new rules are yet to be finalised, your business will need contingency plans sufficiently flexible to accommodate a wide range of possible outcomes.
You might be unsure, for example, what customs duties you will need to pay on imports or exports. Right now, the UK is temporarily adhering to EU rules, where no tariffs apply to its trade wholly within the EU customs union, as the Institute of Chartered Accountants in England and Wales explains.
Meanwhile, when trading with the rest of the world, the UK is still covered by EU tariff rates. However, this year, the UK could sign new trade agreements where the exact tariffs payable differ from country to country, and possibly even apply to trade entirely within the EU customs union.
Given that looking up information for, and completing, customs declarations can pose difficulty, you might be tempted to use the Common Transit Convention (CTC). This would enable goods to pass through customs more easily, with customs duties only payable once goods reach their final destination.
However, you would need to apply a guarantee for covering customs or import VAT duties concerning goods in transit. You could also consider protecting the actual cargo by taking out goods in transit insurance. This policy could assist you in recovering the cost should a consignment be damaged or lost.
If you run a UK business that trades with either the EU or non-EU countries, you need what is known as a UK EORI number. Meanwhile, if you operate an EU business trading with the UK, you will require an EU EORI number to be able to continue to do so.
Either way, you will need to be in the habit of completing customs documentation after the transition period. This is because goods sent between the UK and EU will have to pass through customs, necessitating the completion of customs declarations.
If you are a VAT-registered business in the UK, you will have already been sent an EORI number by HMRC in August 2019. However, businesses on either side of the UK-EU divide can register for an EORI number if they don’t have one.
The UK Government’s website further details the current rules that apply when you seek to transport goods by road from the UK to the EU.
