As we fast approach the end of the post-Brexit transition period on 31 December 2020, we discuss final steps businesses can take to prepare.
As we fast approach the end of the post-Brexit transition period on 31 December 2020 with no agreement on a potential UK-EU Free Trade Agreement yet in sight, one thing is certain: UK businesses will no longer enjoy frictionless trade with the EU. Importers and exporters must prepare for disruption in their end-to-end supply chains based on the need for import and export declarations at the UK/EU border.
Although the negotiations between the EU and UK have not yet reached a point where businesses have complete certainty on the procedures and customs checks that will apply, both sides agree on the potential for two-way border delays. The Northern Ireland Protocol and what that means practically for movements to and from Northern Ireland adds complexity in and of itself.
Both as part of the tactical approach to the negotiations and to provide further detail for the trading community to use, the UK Government recently published a number of key documents, including the post-Brexit tariff schedule – the UK Global Tariff (UKGT). This has clarified the rates of customs duties the UK will apply to imports from 1 January 2021 and is an important milestone in the context of the Brexit narrative – it provides more certainty and allows Brexit duty planning to be undertaken at a more accurate granular level.
The UKGT allows businesses to recast their modelling using UK duty rates rather than the EU’s tariff schedule for third countries on a ‘worst-case no-deal Brexit outcome’ basis. There are significant financial differences between the UKGT and the current EU tariff schedules, and regardless of whether a free trade agreement with the EU is struck or not, the financial implications should be closely weighed up to evaluate what customs duty minimisation and supply chain optimisation measures are worthwhile.
Businesses now have seven months to prepare for implementing their post-Brexit plans. You should be asking yourself if your current plans remain fit-for-purpose, or whether the renewed tariff certainty is the catalyst your business has been waiting for to start its preparations. Please speak to your usual contact if you would like any help with your preparations, wherever you are on your Brexit readiness journey.
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