Here are some of the practical steps small importers and exporters should be taking to make sure they are ready for any upheaval come October.
Practical Checklist | Preparing for no deal
- Audit your supply chain to figure out how it is likely to be affected
- Apply for an EORI number to allow you to trade in the EU
- Register for simplified import procedures to speed up customs process
- Check what tariffs are likely to apply to your products
- Consider appointing a customs agent to handle declarations
- Check if your products need specific certificates
- Plan for currency swings
- Keep an eye out for long-term changes to regulations
Review your supply chain
Even if you think you don’t do any business with the EU, it’s worth having a thorough look at all the goods that pass through your business and where they come from and ultimately end up.
If your supplier’s supplier is dependent on a raw material they ship in from Sweden, then it’s worth doing your research to see if there are any alternatives available. Likewise, if your main customer uses your product to make goods destined for the Polish market.
Apply for an EORI number
An Economic Operator Registration and Identification number is used by customs authorities to identify your business and ensure you are paying the correct tax.
It is usually your VAT number followed by three zeros, but you need to register online for it to be able to work.
Companies that already do business beyond the EU should have one already.
Register for simplified import procedures
In the event of no deal, the Government will temporarily let UK-registered companies defer submitting full customs declarations and paying duties on imports in the hope of avoiding too much congestion at borders. You need an EORI to apply and can register here.
Check your tariffs
In March the Government set out plans to slash most UK tariffs in the event of no deal to minimise the costs consumers must pay for imported goods.
Brussels is yet to make a similar pledge, meaning exports to the EU would likely be hit by the bloc’s World Trade Organisation “most favoured nation” tariffs.
You can check what those are here – from a €2.60 (£2.40) per kilo levy on table salt to a 7.7pc levy on the value of live donkeys.
Consider appointing a customs agent
Cost-conscious entrepreneurs may be tempted to try to navigate the intricacies of the customs system on their own, but the complexity and specialist software needed can make this a false economy.
The costs can be prohibitive; however, a typical import declaration will cost around £55 per consignment – an unwelcome prospect for companies importing small batches of products.
Apply for product-specific licences
Some goods, particularly animal products, will need specific labelling and in some cases extra certification to be exported to the EU in the event of no deal.
Hedge your bets
Most currency traders believe a no-deal Brexit would hammer the pound, sending it even further than it has already fallen since the EU referendum in 2016. It is worth considering how this could affect your finances.
While cheap sterling could make your products more attractive to foreign customers, it could also push up your costs. And if rates fluctuate dramatically, you could be left receiving significantly less cash when your customer settles their invoice than you expected when you shipped the product.
Leaving without a deal will force the UK to devise new rules and systems for dealing with issues such as data sharing, intellectual property and public procurement. These are unlikely to be a major issue on day one but over time they may cause some difficulties.