The Free Trade Agreement and your Business
As the end of the Brexit transition period looms ever closer, we’re all eagerly waiting to find out whether the UK government and their EU counterparts can reach a Free Trade Agreement.
Any such agreement would allow ‘free’ trade between the EU and the UK. It would mean that, if we have a full Free Trade Agreement covering all the relevant sectors, the rate of duty would be 0%, allowing the movement of goods without the payment of any additional duty. So far so good, but there are still several changes in the pipeline that you need to consider, regardless of whether an agreement is reached or not.
There seems to be a common misunderstanding that a Free Trade Agreement would remove the need for any additional paperwork. This is certainly not the case! Businesses must still adhere to all the standard administrative regulations from trade bodies such as HMRC, HSE and DEFRA. Anyone exporting goods from the UK will still be required to complete export declarations in the UK, and ensure that goods are formally imported into the EU with an import declaration, and vice versa.
In order for HMRC to process import / export declarations, detailed and comprehensive documentation must be submitted to them, so it’s vital that you factor in the additional time and cost of consolidating all of this information, as well as process time with HMRC and other Government bodies.
With this increased volume of official documents required across the supply chain, it’s imperative that businesses pay close attention to the terms and conditions of contracts, particularly in relation to risk and the liability for making declarations and paying any relevant duties.
It’s also worth noting that businesses may require both EU and UK Economic Operators Registration and Identification (EORI) numbers in order to make import / export declarations. If you have already held or been allocated one of these, you can apply to HMRC online. It’s a straightforward process which typically takes HMRC around 3 days to approve.
Finally, businesses should also be aware of both the UK and the EU trade tariffs for their goods, regardless of whether there is a Free Trade Agreement in place or not. Depending on the terms of sale previously agreed with the customer, the liability for paying any additional duties may well lie with them.
If you’d like to discuss these changes, and how they may affect your business, we’d be happy to have a chat. You can get in touch with us at: firstname.lastname@example.org.