What Businesses Can Expect from the Brexit Changes

Brexit has disrupted much of the “way of things”, as it were, and while many people found a resolution to be a sign of relief, others knew it was just a sign of all the work to come. The UK is no longer part of the Single Market and Customs Union, which not only complicates shipping and exporting but puts more costs and expectations on businesses in the UK.

What Businesses Can Expect from the Brexit Changes

You can find a lot of facts, details, and information out there about the financial impacts of this new plan, but most of it is going to be worded with a lot of jargon and hard to understand. In this article, we'll take a look at all of the changes that we know of to date and help you better understand how to take advantage of this opportunity for new partnerships and deals, which is a much better way of looking at things.

Of course, there are still some changes that you'll need to be prepared for that may be less-than-desirable. The new agreement took effect as of January 1 and it brings significant change. Here's what we know so far.

Major Changes are Underway, Some Undergoing Discussion

The new agreement is still being worked out in terms of FS market access and personal data, but there is a lot that has already been decided and set into place. For organisations that want to continue to do business outside of the UK, these changes are going to be critical to understand.

This can prove to be a challenge, especially for businesses that are still struggling with issues related to the pandemic like cash flow and even just the fundamental reshaping of the world that has happened as a result of COVID-19. Despite the challenges already present, it's still urgent and important to educate yourself on the new agreement and what it can mean to you as a business.

One of the biggest agreements is that all trade in the UK will remain quota-free and tariff-free, which ensures access to the EU and allows companies to continue to do business in much the same way they have done in the past.

EORI Numbers

Every business that wants to trade out of the UK will need to apply for an EORI, or Economic Operator Registration and Identification number. This application process is quick and easy and can be done online. Without an EORI number, organisations cannot export or import goods to and from the UK. This number also prevents huge delays and increased export costs for things like storage fees-- if you don't have an EORI, your items could sit in storage because they can't be properly transported.

You do not need an EORI number if your organisation is a service-only business. You also will not need an EORI to move goods between Ireland and Northern Ireland, but those receiving goods from UK suppliers will also need to have an EORI number, even if they're not an exporter. Your first two steps should be to find out if your organisation needs one of these and whether your trading partners have them, as required.

Customs Declarations

The process of customs declaration remains much the same, although there seems to be a lot more paperwork and documentation required to keep everyone safe and on the same page. Here are the important things to know:

  • Customs declarations are required for all goods leaving and entering the UK.
  • This is a complex process, so companies are advised to choose a customs agent or freight forwarder to work with.
  • There are special software programs and online systems that can assist with customs declarations.
  • Companies that don't ship often can use a simplified frontier declaration to import goods as an alternative.

The agreement for efficient cross-border trade is in place, but there will still be a significant amount of paperwork and bureaucracy to work through. You'll need to decide who is going to handle customs declarations for your business and take the necessary steps to implement the proper tools and resources.

Other Changes and Rules to Consider

As part of the Common and Union Transit program, companies that move goods on tight deadlines through the EU or UK will be able to transport items much more easily. This process doesn't require customs declarations or duties at every border, which saves time and paperwork for everyone involved.

There will be no tariffs or quotas between UK and EU trades, as part of the new agreement. However, this only qualifies to goods that originated in the UK or EU. Any goods that are of non-British or non-EU origin, will require tariffs. Under the new provisions, more than 40% of the item's value needs to be made outside of the UK and EU for this to happen. There's more information on the Rules of Origin on the Brexit website.

Importers will also be able to apply for a duty deferment account, which allows them to pay for customs charges every month instead of paying for each shipment as it comes in. This helps ensure faster clearance on high-value items and a streamlined process overall.

What You Can Do Now

Although you've no doubt got a big to-do list after reading this guide, there are some steps that you should take first and foremost. It's time to consider appointing someone in the business to be responsible for the customs planning and new regulation setup process. Staff needs to understand all of the processes involved that affect their work. Fortunately, there are plenty of resources to help you along the way.

For starters, the government has created a fund of about 16 million to help businesses with training and education on the new customs process, with designated training providers available. There is also funding available to assist with inward processing and customs warehousing relief in the form of grants and other financial assistance.

Here is a list of grants offered as part of the transition: Grants for Customs Declarations Training and Recruitment.

Whilst the Brexit right now is causing some confusion, we at Lawrence Grant are here to assist in reducing any stress, and assisting with any financial adjustments required within your business.

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