Recently, Flexport outlined six steps businesses can take now to be Brexit-ready, with an overview on what to expect in the coming months. Beyond preparing for the big transition, understanding the specific implications of the UK’s trading relationships with the rest of Europe (and others) will become paramount. As the saying goes, the devil is in the details. And that is exactly what was covered in a follow-up webinar. Read on for key takeaways from the discussion.
Incoterms, or terms of sale, are of primary importance to importers and exporters. They govern how import or export declarations are shaped. Two terms below are especially important as they are often the root cause of complications due to lack of awareness:
Businesses that don’t have visibility into their Incoterms should work with a customs advisory service to get ready for Brexit.
In addition, January 1, when the transition occurs, will usher in new rules regarding customs representation. GB-established businesses with no EU entity, directly importing or moving goods to the EU, will need ‘indirect’ (or even ‘fiscal’) representation in which the designated customs broker is wholly liable and takes on responsibility for any potential fines that may occur within three years after the customs declaration. This will likely increase customs costs. In addition, it may limit representation options as some brokers will not want to take this on.
Keep in mind two important guidelines:
(1) To import or export from the UK post-Brexit, businesses will be required to hold a Great Britain-prefixed EORI number. And, to do so in the EU they will also require an EU EORI. The advice here is to apply in a member state where the business imports the most or wherever goods arrive first in the import process.
(2) Postponed VAT accounting, is a new process that will allow UK VAT-registered companies to “postpone” payment of VAT at the point of entry. Those that aren’t VAT-registered hold the highest risk of not being prepared ahead of the Brexit deadline as they were not auto-enrolled by HMRC in 2019.
In most cases, completed declarations will need to include:
As the twists and turns continue with the countdown to Brexit, there are many moving parts—and with that, considerations to be made and prepared for. To learn more about the intricacies of Brexit, catch the webinar on demand. And, be sure to visit our special microsite for all things Brexit.
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