NO DEAL BREXIT PLANS PUBLISHED With the impasse at the EU meeting in Salzburg, the chance of a no deal Brexit is now looking like a serious possibility. The UK is due to leave the EU on 29th March 2019. In the event that a deal is not struck, the government has produced a guide for business setting out the potential effect on trade with the EU. A link to the guide is set out below. https://www.gov.uk/government/publications/trading-with-the-eu-if-theres-no-brexit-deal/trading-with-the-eu-if-theres-no-brexit-deal Planning
The guide sets out how businesses should prepare for a ‘no deal’ scenario. They should:
• understand what the likely changes to customs and excise procedures will be, and how they will affect their business
• take account of the volume of their trade with the EU and any potential supply chain impacts
• consider the impact on their role in supply chains with EU partners. In the event that the UK and the EU does not have a Free Trade Agreement (FTA) in place in a ‘no deal’ scenario, trade with the EU will be on non-preferential, World Trade Organisation terms. This means that Most Favoured Nation (MFN) tariffs and non-preferential rules of origin would apply to consignments between the UK and the EU
• if necessary, put steps in place to renegotiate commercial terms to reflect any changes in customs and excise procedures and any new tariffs that may apply to UK-EU trade
• consider how they will submit customs declarations for EU trade in a ‘no deal’ scenario, including whether they should engage the services of a customs broker, freight forwarder or logistics provider to help, or alternatively secure the appropriate software and authorisations
• register to get EU updates from HMRC Before 29 March 2019 Businesses can currently move goods freely between EU member states. For customs, this means that businesses trading with the rest of the EU do not have to make any customs import or export declarations, and their trade with the EU is not subject to import duty. Certain goods are subject to excise duty. This is a tax charged on the importation and manufacture of alcohol, tobacco and oils. These goods are currently free to move between the UK and the rest of the EU with excise duty suspended. What would happen to customs and excise procedures if there is a ‘no deal’ scenario after 29 March 2019?
If the UK left the EU on 29 March 2019 without a deal there would be immediate changes to the procedures that apply to businesses trading with the EU. It would mean that the free circulation of goods between the UK and EU would cease.
For businesses trading with the EU, the impacts would include:
• businesses having to apply the same customs and excise rules to goods moving between the UK and the EU as currently apply in cases where goods move between the UK and a country outside of the EU. This means customs declarations would be needed when goods enter the UK (an import declaration), or when they leave the UK (an export declaration). Separate safety and security declarations would also need to be made by the carrier of the goods (this is usually the haulier, airline or shipping line, depending on the mode of transport used to import or export goods).
• the EU applying customs and excise rules to goods it receives from the UK, in the same way it does for goods it receives from outside of the EU.
• for movements of excise goods, the Excise Movement Control System (EMCS) would no longer be used to control suspended movements between the EU and the UK. However, EMCS would continue to be used to control the movement of duty suspended excise goods within the UK, including movements to and from UK ports, airports and the Channel tunnel. This will mean that immediately on Importation to the UK, businesses moving excise goods within the EU, including in duty suspension, will have to place those goods into UK excise duty suspension, otherwise duty will become payable.
More detail will be provided in our next blog.   The S4B Team
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