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Trading in a post-transition world

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The end of the Brexit transition period brings frictionless trade between the UK and the EU to an end. For some businesses that already trade globally and are used to tariff and non-tariff barriers, this may be something they’re already familiar with.

However, for businesses that have only ever traded with the EU, this will be a significant change, and even businesses operating purely domestically may face implications within their broader supply chains. With a Trade and Co-operation Agreement published, here are the key changes and what you need to consider when trading across the UK/EU border from 1st January 2021.

  1. Ensure you have your GB or EU EORI number if you are trading across border.
  2. Make sure you’re familiar with rules of origin as this will affect the nature of import declaration required and possible tariffs. Under the Agreement, customs duty tariffs will be reduced to 0% for goods originating in the UK and EU. Exporters will need to provide a “statement on origin” on commercial documents (if the goods meet the rules of origin) to allow the importer to claim the zero rate of customs duty.
  3. Check whether the goods you are trading are classed as controlled goods (goods that require a license to import, or excise goods like alcohol or tobacco, which have additional duties on them).
  4. Decide whether you are going to take advantage of the government scheme to delay import declarations for up to six months (easement). This can help expedite imports, but you must keep rigorous records. Details can be found by reviewing the UK’s Border Operating Model .
  5. Contact your customs agent or intermediary to check everything required is in place. If you haven’t appointed one, details can be found here
  6. Be aware that demand for customs agents, and costs, are rising. If the volume of declarations you’ll be required to make is high, consider self-reporting. The process is straightforward and software implementation grants and support are available.
  7. Review incoterms to understand your contractual liability to undertake declarations and what that means from a regulatory perspective.
  8. Your contractual terms should confirm the need to register for VAT in the EU states you trade with. Consider speaking with a tax specialist about your liability and options.
  9. Make sure you’re familiar with any additional regulation (for example, a licence) pertaining to the goods you’re trading across border and the associated timeframes for declarations, for example, livestock, plants or certain food products. More details can be found here.
  10. For businesses trading with Northern Ireland, the terms of Agreement support those of the Northern Ireland Protocol. If you trade regularly between Great Britain and Northern Ireland, make sure you’ve registered for the Government’s Trader Support Scheme (TSS), which is a free service.
  11. Check that your systems and software are operating with the correct information, for example capturing any detail that may affect tariffs/declarations, such as rules of origin, showing correct VAT status etc.
  12. Ensure that you have the right commodity codes so that any tariffs are correctly assigned (using Tariff in the UK or Taric in the EU).
  13. Monitor any upcoming trade deals that may affect your business.
  14. Ensure you have up to date information as demand for services, port capacity and the additional administration around trade can drive costs higher and that can impact your working capital position.

For businesses in Northern Ireland trading goods into Great Britain, the Trader Support Service can also provide guidance. NI businesses will require an EORI number starting with Xl in order to trade with GB (even if you already have one starting GB). Businesses should also check the commodity codes for the goods they wish to export, to ensure they are not classed as controlled or restricted goods and to confirm tariff or non-tariff status. More details can be found here.

Find out more by visiting our Brexit Hub. Or, if you need specific support or wish to discuss your trade needs in more detail, contact your Relationship Manager.

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