When the transition period ends this year, the customs union will go with it. Great Britain (GB) companies trading with the European Union (EU), including the Republic of Ireland, and EU-based companies trading with GB will be impacted. Preparing now for new border and customs controls and their effects on supply chains will make your transition easier and smoother.
How will tariffs and border regulations change? All EU-GB trade will need new import and export declarations, plus safety and security filings. And, new UK global tariffs may change duty rates and HS codes—all of which must be planned for.
What’s the day-to-day logistical impact? Changes to distribution operations may include delays at borders or inland customs inspection sites, warehousing capacity constraints, and pallet shortages.
Check if you are established in the EU or UK. As of January 1, 2021 any UK entity used to import or export to and from the EU will no longer be considered an EU establishment, creating new potential complexities for you and your customs broker.
What are the best Incoterms for 2021 and beyond? A clear understanding of what’s in your sales contract will determine your responsibilities post-brexit. An update to terms may be needed to reflect the new customs clearance environment.
What paperwork will new borders bring? Customs transit will still be available to move goods between EU and GB. But companies should appoint a broker to support the required extra administration, such as the Goods vehicle movement system and SMART freight portal.
How will taxes change? VAT accounting shifts dramatically when the postponement of VAT payment at point of entry is introduced. GB VAT registered companies that currently pay import VAT at the frontier will be able to postpone that payment until their digital VAT return, adding major cash-flow advantages.
New customs declarations are just one dimension of this political and economic shift. Use this timeline to help shape your planning for every aspect of Brexit.
Brexit will touch borders, trade lanes, and more. Working with Flexport gives you visibility and control over your supply chain across every mode.
Note: This content is provided for informational purposes only based upon the information available to us at the time. We do accept any liability or responsibility for reliance on the above. To receive guidance applicable to your situation, please speak to our experts directly.
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