Friday, June 5, 2020

With 2021 looming, what’s in store for trade?

The end of January brought with it the end of the UK’s member ship in the European Union. Last month, the government began setting out the trading landscape for 2021 and beyond. Gerry Myton, Partner at Streets Chartered Accountants, explains what this actually means.

We find ourselves in 2020, a whole year stretching ahead of us with time to plan, prepare and arrange various measures to deal with our exit from the EU. However, it may not have occurred to many, but this means much more for exporters and importers.

There will now be no frictionless trade with the EU after the end of the transition period. To add to this, customs declarations and checks that currently only apply to trade with non-EU countries will become the norm for goods moving between the EU27 and the UK. A reality check might well be needed for those who have not considered this yet.

In recent speeches and interviews, senior UK Government ministers have confirmed that “The UK will be outside the single market and outside the customs union, so we will have to be ready for the customs procedures and regulatory checks that will inevitably follow.”

This sounds official enough, but what does that actually mean? Here are some clear takeaways:

Full import controls will apply to goods arriving in the UK after 31 December 2020

  • Transitional Simplified Procedures (TSP) will be withdrawn. Anyone authorised to use TSP will need to hold the appropriate authorisations.
  • The proposed special arrangements for exports and imports at roll-on roll-off (RoRo) ferry locations will not apply. Therefore, import declarations or transit movements must be presented on arrival to a Customs Office or via a Port Inventory System. For exports, goods will need to be presented on exit of the UK as happens for exports to non-EU countries.
  • EMCS (Excise Movement and Control System) movements will start at the port of import and not within 24 hours as was proposed.
  • The proposed VAT Postponed Accounting has also been shelved. VAT will be due on imports at the point of importation (cash on the table) subject to the use of deferment accounts and financial guarantees being in place.
  • The ‘Brexit Tariff’ with 88% of goods being imported free from customs duties, has been withdrawn. Instead, the Department for International Trade is consulting on the future tariff and potential removing nuisance tariffs (those under 2.5%) and rationalising others but at the same time protecting indigenous industries, promoting inward manufacturing while not undermining any negotiated free trade agreements.

This lengthy list is clear in its hard facts, but what do businesses need to do now to prepare? A year may well seem like a long time, but these measures will be with us as we ring in the New Year and may still catch some out early on.

To best prepare for this, businesses will need to:

  • Review their terms of trade with EU27 customers/suppliers
  • Consider how declarations will be made and who will be responsible for making these declarations. There will likely be a rush to secure valuable customs agent’s resource in Autumn 2020
  • Review which HMRC regimes could mitigate exposure to the above, such as AEO, warehousing, IP, OP and CFSP
  • Consider transit-authorised consignor and consignee status to start and finish transit movements at your own premises
  • Consider temporary storage authorisations to receive goods inland

It is also worth noting that the EU27 never promised any simplified procedures to importers or exporters, so the UK is mirroring this, but businesses in the UK now have less time to get prepared.

UK businesses need to move quickly to ensure they can continue to operate their supply chains as smoothly as possible.

When it comes to Northern Ireland, the great unknown is what will happen on freight movements between mainland UK and Northern Ireland to ensure goods can move freely between Northern and Southern Ireland, and how the Irish Protocol will be managed and policed.

There does seem to be a divergence between the UK and EU27 over what the words mean.  The UK insists that there will be no border between Great Britain and Northern Ireland, however, we will have to wait and see what agreement is made.

This seems a particularly hot topic that needs to be agreed upon as soon as possible as many will feel let down and could lose valuable time and resource if ample time is not being granted to deal with this along with everything else.

The overarching advice here is to remain vigilant to any announcements that are being made, or to seek help from financial advisers as soon as is possible. There will be teething problems as a whole new way of operating in this sphere change, but as long as preparations are being made then most SMEs will be ready for the switch.

A message from the Editor:

Thank you for reading this story on our news site - please take a moment to read this important message:

As you know, our aim is to bring you, the reader, an editorially led news site and magazine but journalism costs money and we rely on advertising, print and digital revenues to help to support them.

With the Covid-19 lockdown having a major impact on our industry as a whole, the advertising revenues we normally receive, which helps us cover the cost of our journalists and this website, have been drastically affected.

As such we need your help. If you can support our news sites/magazines with either a small donation of even £1, or a subscription to our magazine, which costs just £33.60 per year, (inc p&P and mailed direct to your door) your generosity will help us weather the storm and continue in our quest to deliver quality journalism.

As a subscriber, you will have unlimited access to our web site and magazine. You'll also be offered VIP invitations to our events, preferential rates to all our awards and get access to exclusive newsletters and content.

Just click here to subscribe and in the meantime may I wish you the very best.






Latest news

Union hits out at East Midlands aerospace parts firm as 420 redundancies planned

Aerospace parts firm SPS Technologies "must not exploit the lockdown" to slash jobs and terms and conditions at its sites in Nottingham, Leicester and...

Streets focus on job and employment schemes in latest business update

Streets Chartered Accountants provide details of changes to Coronavirus Job Retention Scheme including the introduction of flexible furlough in its latest business support update. As...

3 business tips for saving money during Coronavirus

Coronavirus has changed every business in the world. Whether you’ve been made to work remotely, put your staff on furlough, or redirected your resources into...

New ownership for Market Harborough ventilation, maintenance & hygiene company

System Hygienics, formerly the service arm of the Hotchkiss group - the largest duct manufacturer and installer in the UK – have new ownership,...

Construction of Kirkby’s new Leisure Destination takes a step closer

Plans to bring a new state-of-the-art leisure centre to Kirkby in Ashfield have taken another step forward. Ashfield District Council is seeking tenders from contractors...

Related news

Shared office spaces cautiously reopen

Many of the UK’s network of 5,000 shared office spaces are tentatively re-opening this month as more businesses return to the workplace as the...

Union hits out at East Midlands aerospace parts firm as 420 redundancies planned

Aerospace parts firm SPS Technologies "must not exploit the lockdown" to slash jobs and terms and conditions at its sites in Nottingham, Leicester and...

Streets focus on job and employment schemes in latest business update

Streets Chartered Accountants provide details of changes to Coronavirus Job Retention Scheme including the introduction of flexible furlough in its latest business support update. As...

3 business tips for saving money during Coronavirus

Coronavirus has changed every business in the world. Whether you’ve been made to work remotely, put your staff on furlough, or redirected your resources into...

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close