Importing and exporting after 1 January – what small businesses need to know
19th October 2020
Until now, trading with other countries in the UK has been relatively easy. There have been no customs checks, not a huge amount of paperwork and no tariffs on goods. That is all likely to change on 1 January 2021, but exactly how is unclear until a deal is reached – or not reached – with the EU.
What’s going to change?
When the UK leaves the EU on 31 December 2020 the free movement of many things will change. This includes the removal of the right to tariff-free importing and exporting of goods.
As a deal is still under negotiation we don’t know exactly what types of goods will have tariffs imposed, only that the right to everything moving from the EU to the UK being tariff-free will be lost as we will on longer be members of the EU.
If no deal is reached with the EU, businesses will have to trade with countries in the EU under World Trade Organization (WTO) rules.
For businesses with supply chains based in Europe, or which import or export anything, that’s going to mean a lot more paperwork and potentially delays to the usual timescales for receiving or delivering things, even if tariffs aren’t imposed on your particular goods.
Membership of the EU also meant you could declare any VAT on goods after they were delivered. That’s likely to change from 31 January 2021 too.
What can you do now, regardless of whether a deal is agreed at the 11th hour?
The first, and critical, step that you can take now is to get your paperwork in order. If you import or export from the UK, you will need a European Union registration and identification (EORI) number. You need an EORI number to move goods between the UK and non-EU countries. Apply for one here.
It’s a good idea to review your supply chain to understand impacts of Brexit in the event of both a deal and no-deal scenario. You’ll need to understand the layout of your supply chain, assess the customs, VAT and regulatory requirements you’re likely to be subject to if you trade cross-border. Understanding the operational impact on your business is critical.
Assess whether you need to make any changes to customer expectations if goods you import as part of your production or export to customers experience delays. What can you do, if anything, to mitigate those delays ahead of 1 January 2021?
Do you need to make any changes to your company terms and conditions? Are there any more systems you need to register for to make future paperwork as simple as possible?
The Institute of Export has created a great Brexit checklist which is worth working through, and if you need any support, you know where we are.