Theresa May has said that she is "determined" to deliver Brexit on time, which means that, provided no extension to the Article 50 process is agreed between the UK and EU, the UK will leave the EU at 23:00 GMT on Friday 29 March - with or without a deal.
In a no deal scenario, UK businesses will need to apply the same procedures to intra EU trade that currently apply when trading with the rest of the world. Under current customs procedures, import processes for trading with the rest of the world (i.e. non-EU countries) means that goods are not released from customs control until a full import declaration is made and any applicable import duty is paid in full.
However, HM Revenue and Customs (HMRC) has announced plans to implement simplified importing procedures for goods from the EU in the event of a no deal - so called Transitional Simplified Procedures (TSP). These procedures are aimed at supporting UK companies in the event of a no deal Brexit, but are also clearly intended as a measure to seek to avoid congestion and delays at UK ports.
Companies established in the UK can apply to use TSP when importing goods into the UK from the remaining EU member states. The TSP reduce the amount of information UK importers need to give when goods enter the UK, by allowing importers to defer:
- Giving a full declaration until after the goods have crossed the UK border; and
- Paying any duty due on the goods until the month after import.
To be eligible to use the TSP, companies must:
- Have an Economic Operator Registration and Identification (EORI) number;
- Be established in the UK;
- Be importing goods from the EU; and
- Have a duty deferment account, or apply for such an account and have a financial guarantee in place by 30 June 2019.
However, if you currently use one of the existing Customs special procedures, such as the Customs Freight Simplified Procedure (CFSP), or you only import goods from outside of the EU, then you will not be eligible to apply for the TSP. Agents/freight forwarders can also not use TSP on behalf of importers.
Registration opened for authorisation to use the TSP on 7 February 2019 and can be accessed here.
HMRC plans to review the TSP and consult with businesses 3 to 6 months after they are introduced on 29 March 2019 to evaluate how effectively they are working. They have assured businesses that any change to the TSP will be preceded by at least a 12-month notice period.
A No Deal Brexit: What can you do?
Businesses operating in the UK with interests and trade in the EU, should consider how a ‘no deal’ scenario could affect operations, and take steps to mitigate against such a risk.
Practical steps include:
- Assessing the impact of the likely changes to customs and excise procedures on day to day operations and procedures, including considering how customs declarations will be submitted in a no deal scenario.
- Reviewing the volume of trade with the EU and considering any potential supply chain impacts, including engaging with the other businesses in the supply chain to ensure that the necessary planning is taking place at all levels.
- Putting steps in place, if necessary, to renegotiate commercial terms to reflect any changes in customs and excise procedures, and any new tariffs that may apply to UK-EU trade.
- Registering for a UK EORI number.
DLA Piper's Global Trade and Government Affairs team
We are market leaders in proving informed analysis, accurate forecasting, and practical contingency planning for clients impacted by Brexit.
Our Brexit service is led by a dedicated Brexit Director, Paul Hardy, the former EU Legal Adviser to the House of Lords and John Forrest, Head of the UK Global Trade and Government Affairs practice, and a former UK Government trade negotiator. It is supported by DLA Piper's specialist customs lawyers who have in-depth knowledge of almost every area of commercial activity and work from our offices all around the world, including in 18 EU Member States.