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Brexit and Customs: What Does It Mean?

22 February

Currently, the word ‘Brexit’ said in the majority of situations brings about an orchestra of groans and sighs. Large proportions of the public are fatigued by the discussion and have had their minds run ragged by the uncertainty surrounding the concept. Nevertheless, it is something to be addressed, as the deadline of 29 March 2019 looms.

The UK’s exit from the EU will impact on the haulage and logistics industry, particularly those sectors that move their own products internationally. Regardless of whether or not a deal is entered into between the UK and the EU, there will still be notable changes at the border between the two entities.

Operators who import the materials to manufacture their products and export those products via road freight will begin to feel pressure from HM Revenue and Customs (HMRC) to be compliant with customs procedure. There will be an increase of administration taking place at customs ports and businesses will have to commence establishing how much they are to pay in import duty from the EU.

‘No Deal’ Brexit
Exiting the EU without a deal in place will see the UK fall back onto a different import and export procedure when trading with the EU block. This procedure is the procedure for trade with ‘Third Countries’ and requires heavy regulation of customs compliance from the importer and/or exporter of the goods in question.

Operators will see the rise of the Single Administrative Document (C88) and encounter the processes in operation at ‘Non-Inventory Linked’ Ports. The system itself is heavily based in hardcopy format. In such a framework, it is important that operators exporting their own goods are aware of the correct tariff categorisation and valuation of their products to facilitate frictionless movement across the border.

Businesses and companies could find themselves the subject of scrutinising audits from HMRC and facing a tribunal if they do not take legal advice in advance regarding the compliance of their operations.


Brexit with a Deal
Should the UK come to an agreement with the EU, there is still likely to be an implementation of a varied version of the ‘Third Countries’ procedure, underpinned by a trade agreement. In such circumstances it is even more important that operators on whom this will have an effect to take out legal advice, as it will be bespoke and unprecedented arrangement that may offer preferential loopholes in certain areas that give companies a corporate advantage.

Examples of such preferential opportunities may be minimal or waived import duty tax for goods falling into a certain tariff classification, or which originate from a certain state. There will, however, be certain procedures and criteria to satisfy before these preferential opportunities can be utilised by UK businesses. Compliance with these procedures and internal regulation is therefore vital to avoid facing the HMRC in tribunal.

Further to this, there may be special procedures or payment methods incorporated into the agreement for certain transactions that would interest certain operators or manufacturers. These procedures and the Duty Deferment Scheme in place should be considered and looked at with the help of legal advice to ensure that your business is being run cost effectively and in a commercially sensible manner.

Last Word
In light of the increased compliance requirements and heavier burden on businesses, Backhouse Jones have undertaken to send practitioners to acquire the relevant Customs Competency Certificates to advise and give guidance on the matter of customs and border tax. Those who have successful completed their courses have in-depth knowledge on the underlying procedures and administrative requirements in order to clear goods for export and possess an expertise in the most cost-effective method of importing materials into the UK for the purpose of manufacturing.

As an operator, if you are concerned about your infrastructure and how compliant you are regarding customs, imports and exports, contact Patrick Boyers at Backhouse Jones on 01254 828300 to receive guidance and, if needed, a consideration of your degree of compliance.

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