Letter raises questions

UK warns on Brexit

A top official in the UK’s revenue and customs office sent a letter to about 145,000 select UK companies explaining what they would need to do if a 'no deal' Brexit unfolds.

Mike Towle 26.09.2018

London (AEB) – Companies across the United Kingdom that trade within the European Union, but nowhere else, have been sent a letter by the British government that warns them about ‘’immediate changes’’ to the way they trade with the EU if a deal on Brexit cannot be reached.

The two-page document, sent to 145,000 VAT-registered businesses, says the government has reached agreement with the EU on ‘’the vast majority’’ of issues but acknowledges it’s preparing for all scenarios, including ‘’the unlikely outcome that the UK leaves the EU at the end of March 2019 without a deal.’’

‘’In the event of No Deal, the government is committed to prioritizing stability for businesses,’’ said the letter from Jim Harra, deputy chief executive at the UK’s revenue and customs office.

Some in the industry said the letter may have raised as many questions as it answered, including what are the thousands of companies in other EU member states that trade only within the EU, including in the UK, actively doing to prepare.

brexit letter
brexit letter

‘’We will continue to work closely with industry to ensure that interventions in a no deal scenario are conducted in a way which minimizes delays and additional burdens for legitimate trade, while robustly ensuring compliance,’’ said Harra about UK traders. ‘’The approach of continuity does not mean that everything will stay the same, but the priority is maximizing stability at the point of departure.’’

Harra’s letter is a signal from the government that a no-deal Brexit could be a complex and change-provoking challenge for managers. It notes that:

  • UK companies would have to apply customs, excise and VAT procedures to products traded within the EU in the same way that now applies to goods traded outside the EU.
  • Trading partners inside the EU will have to apply those same procedures to goods received from UK traders in the same way they do goods received from businesses outside the EU.
  • And that EU-only businesses will have to start completing customs declarations after March 2019 and that for the first time customs checks would apply to their transactions.
Claire Umney
Claire Umney

Claire Umney, strategic initiatives director at AEB, said  ‘’there will be a high dependency on the traders to get their customs information right.’’

That may be demanding for some who are experiencing this kind of compliance for the first time in any significant volume.

 ‘’The thing about this group of companies is that they only trade with the EU from the UK,’’ said  Umney. ‘’That means they may have no experience moving goods across a customs border. The scary thing for them is that they might not know what the importance is of an accurate commodity code for example or what a customs procedure code is.’’

If you own, operate or work for an impacted company, Umney says you need to be focusing now on a number of key areas, including the following:

  • Have you thought about how you will want to submit declarations? You can self-file or engage an outside company – like a freight forwarder, customs broker, or courier service - to file for you.
  • Do you have a handle on whether you need an import or export license? For example, dual-use goods, controlled goods, plants, and animals all need a license. You can learn more at this site.

You can find more help in our Brexit toolkit. It's loaded with all you need to know to navigate your way through Brexit, no matter the outcome.

‘’The optimum way to deal with this is to know what customs data is required and have it in place up front,’’ said Umney.  

‘’What you want is a SaaS software environment that is set up for you’’ she said. ‘’It’s fully configured with all of your data there. You can integrate with your ERP system if you want to remove any risk of error and you can send off your customs declarations yourself. That gives you complete control and complete visibility and supports the freight forwarders to keep the goods moving.’’ 

Brexit letter
Brexit letter

At AEB, our Customs Management software is our central platform for managing customs processes. Companies can create export and import declaration easily and send them directly to the CHIEF or CDS system, supported by a smart assistant that explains what to do. Its end-to-end IT integration and smart automation allows companies to accelerate customs processes and save valuable resources.

In case of a free trade agreement between the UK and the EU after the Brexit, our software also helps companies take advantage of it, managing preference calculation and supplier declaration easily and thus, by using the FTA,  making products more competitive. And all that on the foundation of a smart solution for classifying master product data. Companies gain by having complete transparency of customs processes in a single secure and automated solution.

Soon AEB will publish a webpage at aeb.com with all the information companies on all sides of Brexit need to know to do business inside and outside the UK no matter what the end game, hard Brexit, soft Brexit, no deal or revote.

The impact of a no-deal Brexit would extend far beyond the list of UK companies doing business in the EU. Across Europe and beyond thousands of companies will feel the impact of the change in the way they do business.

‘’It’s not just 145,000 UK companies that are in this situation,’’ said Umney. “’It will also be a fair number of companies across Europe that will fall into this same category and will have to start doing customs declarations to trade with the UK that they have never had to do before.’’

Over de auteur
Mike Towle
Mike Towle has been involved in content creation for more than three decades. A former reporter, he’s worked in all forms of international media – digital, print and video. He’s driven to find the best way to tell every story and then publish it in a mode that finds its perfect audience.

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