Easing the Brexit burden – what schemes could help you?

So the big day everyone was waiting for has come and gone and many are now left dealing with the consequences. No we’re not talking about trying to shift the post-Christmas pounds it’s the fallout from ‘Implementation Day’ or ‘Brexit Day’ that has everyone talking this January.

The UK has finally left the EU and you would be forgiven for thinking that the ‘last ditch’ trade deal negotiated by Boris Johnson would ease the burden on UK & EU business involved in cross border trade and solve a number of the key issues involved. Now the complexities of negotiating such an all-encompassing deal in a relatively short time frame (although it seemed like an age!) are great and we won’t get too political in this blog on the pros and cons of the deal agreed but a quick trawl of news sites unearths a number of negative new year headlines…

‘Problems in first week of post-deal GB/NI trade’ , ‘EU firms refuse UK deliveries over Brexit tax changes’ & ‘Problems Grow at UK Ports with backlogs and delays’ say BBC news while ‘Brexit red tape prompts rethink on cross-Channel trade’ & ‘UK VAT changes for foreign mail-order sellers create chaos’ are other headlines from the Financial Times.

There was always likely to be challenges to overcome in the first few weeks of January (notwithstanding the latest lockdown) however is it fair to say that the doomsday scenario some predicted has actually played out? Or is it very much business as usual?

Firstly it is important to stress that although a trade deal was agreed late last year and tariffs avoided on goods of EU origin there are a number of issues for business involved in cross border trade to negotiate, not least a significant increase in customs paperwork on all imports/ exports in and out of the EU.

It would take a long time to analyse all aspects and impacts of the 1,200+ page agreement for UK firms but there are some significant issues or ‘barriers to trade’ which have sprung up and are causing headlines such as the ones seen above.

With no tariffs on goods of EU origin the majority of the delays and issues will, I expect, be to do with the increased paperwork burden. Even those of you that have got your ducks in a row and filled out all forms correctly, can’t legislate for the truck in front of yours who spent December Christmas shopping rather than researching the new rules! As always all you can do is get your own house in order, or trust the expertise of a freight forwarder to do his for you.

So why might EU firms refuse to trade with UK firms?

Depending on the terms of their agreements with suppliers/ customers in the UK, sometimes referred to as ‘incoterms’, these EU Companies might have woken up after their socially distanced new year’s celebrations with a VAT or paperwork headache. If the EU Company are the ones responsible for the import/ export they will have the increased paperwork burden and would be potentially faced with the need to register for VAT in the UK in order to reclaim charges incurred.

EU firms are therefore faced with three options; getting their head around the new requirements and facing them head on, trying to pass the burden onto their UK counterparts or more drastically refusing to trade with them completely. With the UK being the ones voting for Brexit (no turkeys voting for Christmas jokes here – too easy) it’s hard not to sympathise with the disadvantaged Europeans.

Now consider a similar scenario but where the UK Company is responsible for the import or export (or if the EU Company passes on the burden post-Brexit). It will of course be the UK Company with the New Year EU Exit hangover!

A recent webinar by the Institute of Export & International Trade has however highlighted a number of special customs procedures which can help businesses and may take on increased importance in a post Brexit world. Schemes and simplifications such as:

• Authorised Economic Operator status
• Customs Warehousing
• Customs Freight Simplified Procedures
• Approved Exporter
• Inward/ outward processing

Many of these schemes are not new but with all EU arrivals becoming imports and dispatches becoming exports a number of these present an opportunity to limit the impact of the EU Exit on your business by delaying duties or simplifying new procedures.

The deal is very new and may develop over time but please do speak to us if you are having issues with the new rules. We are keen to know how the changes are impacting local businesses and although there are many different variables and scenarios possible we may well have seen something similar or know of a way to make your 2021 that bit easier.

Although we can’t open the pubs, that one is beyond us unfortunately!