5 Brexit steps to ensure minimal disruption to your supply-chain

It has been 2 weeks since the EU-UK Transition Period has ended, and the UK are now a third-country to the EU. The announcement on Christmas Eve by the EU and the UK that they had concluded a Deal was a good outcome for most businesses, particularly as compared to the implications of a No Deal.

However, this Trade and Cooperation Agreement (TCA) was concluded in record time for a trade agreement of this scale, and as such, many supply-chain impacts will emerge in due course e.g. customs obligations, treatment of VAT, regulatory divergence, lack of mutual recognition of (some) qualifications etc.

Overall, the EU-UK Deal is welcome, but it does not replicate the frictionless trade arrangements of the past, and businesses will therefore need to familiarise themselves with the new trading rules. It is also very unfortunate that there was no implementation or phasing period to dissect this Deal by all parties, so as advised by Arvo in recent months, our top 5 steps now to ensure minimal disruption to your supply-chain are;

1. Assess whether the proposed Incoterms with UK trade partners meets your needs and determine whether you or your customer/supplier is responsible for the filing of customs declarations and any associated payment of duties and VAT. Yes we said “duties”, as tariff free imports and exports are only for “qualifying goods” traded between the EU and GB (i.e. goods of EU or UK origin), with paperwork required to determine origin status for qualifying products.

2. Make sure you are able to file or have someone file customs declarations for your goods movements with Revenue and/or HMRC (depending on your Incoterms), particularly as many new Port systems, such as PBN, GVMS, SI Brexit, all only went live (or were revised) from 31st December. For exporters to the UK, ensure you understand the phased plan from the UK Government for the introduction of border controls on imports of goods into GB from 1 January 2021 up to July 2021 (while noting this has not been reciprocated, with full customs obligations required on imports from the UK from January 2021)

3. Familiarise yourself with the new VAT rules for trade with the UK, particularly the variances for sellers of goods B2B and B2C (including the £135 threshold). This includes changes to VAT rules for the supply of certain services cross border to and from GB and between ROI and NI.

4. The specifics of the regulatory divergence/conformity aspects of the future trading relationship are yet to emerge, but caution is advised, as the TCA does affirm that the EU and the UK will be two separate regulatory and legal spaces. This means that all products exported from the EU to the UK will have to comply with UK technical regulations and will be subject to any applicable regulatory compliance checks and controls. Similarly, all products imported from the UK to the EU will need to comply with EU technical regulations and will be subject to all applicable regulatory compliance obligations, checks and controls for safety, health and other public policy purposes

5. Last but not least, have your EORI number, know your customs codes, speak with your UK trade partners and logistics providers, while engaging with the relevant authorities as required.

If you have any Brexit queries, feel free to comment below or join the supplier discovery revolution at www.kwayga.com