22 Feb Prepare your business for a No-Deal Brexit
With the March deadline only days away, there is still uncertainty around what Brexit will mean and planning for a “No Deal” scenario seems sensible right now. Businesses that trade within the EU should have contingency plans in place. These plans will need to be flexible to cope with a variety of possible outcomes.
Here are some of the areas you should consider:
Movement of goods
The UK is implementing a new electronic customs declaration system for businesses, so check if your systems and processes are up to scratch. UK businesses will need a UK Economic Operator Registration and Identification (EORI) number. You can find the forms on the Gov.uk web site, Brexit section: https://www.gov.uk/government/brexit
You may also need an agent to help with import/export declarations as you would for trading outside the EU. Check whether you need additional information from your carrier. Businesses that trade within the EU can register for Transitional Simplified Procedures (TSP) deferring declarations and paying duty at the border. There is HMRC guidance on the new electronic customs system in the Brexit section on the Gov.uk website.
What is Supply Chain Mapping?
An essential exercise for all businesses is Supply Chain Mapping – knowing where inputs come from and what product category they fall into can help assess potential tariffs. If your business only exports to the EU, this process could be new and time consuming. Further guidance can be found in the “Trade Topics” section of the World Trade Organisation website: https://www.wto.org/index.htm. The EU Tariffs can be found at http://madb.europa.eu/madb/euTariffs.htm
As it stands, the UK has different product standards and regulations to the EU. When we leave, these will be aligned. However, in the event of “No Deal” then UK assessment and certification arrangements could cease to be recognised by the EU. See the Brexit section of the Gov.uk website for further guidance.
Business contracts and employees
You may need to revise any contracts with other EU companies, to clarify the terms for trade and VAT changes. If your business employs EU nationals then they should register for settled status. You will need to track the nationality status of employees going forward to ensure compliance with immigration rules and regulations.
Whether there is a “No Deal”, a brief delay in the UK’s departure and a “deal” or a longer period of transition we advise all businesses to research all scenarios and “plan for the worst and hope for the best”.
We have a more comprehensive “no deal” Brexit planning checklist available for businesses that trade within the EU. Download here.
Alan Davidson is a Chartered Accountant, director and founder of Pentins Business Advisers, entrepreneur and author of the Amazon best-seller “Achieve Your Business Vision”. With over 25 years of helping businesses succeed, Alan knows how to build a business with real value, while avoiding costly mistakes.