The UK government has announced its decision to delay the introduction of post-Brexit import checks by six months.
Checks were originally due to be introduced from 1 April and from 1 July. However, following weeks of concern that the introduction of new formalities would result in the collapse of supply chains and product shortages, these delays have been introduced to give hauliers and businesses more time to adapt.
In a statement to the House of Commons, the minister for the Cabinet Office Michael Gove said:
“Although we recognise many businesses have been investing time and energy to be ready on time, and indeed we in government were confident of being ready on time, we have listened to businesses that have made a strong case that they need more time to prepare.”
He also added that the disruption that has been caused by COVID was a key factor in the government’s decision, highlighting the need to ensure the UK economy is able to recover fully.
Pre-notification requirements for products of animal origin (POAOs), certain animal by-products (ABPs) and high-risk food not of animal origin, as well as export health certificates for POAOs and ABPS, will now be implemented in October instead of April. Control procedures originally scheduled for 1 July and the deferred declaration scheme will not come into force until January 1 2022.
Road Haulage Association (RHA) Chief Executive Richard Burnett welcomes the decision and says the announcement will buy extra time for hauliers who are still dealing with the additional red tape that has beset them since the end of the transition period. He has, however, raised some concerns about whether operators will even be ready by October 1 due to a shortage of skilled customs agents and veterinarians across the EU to complete the relevant documentation.
“Despite these reservations, I am pleased that Mr Gove and his team have acknowledged the many challenges currently being faced by British hauliers and traders and we look forward to working with government to resolve the issues.”
For those monitoring the impact of a no deal Brexit the publication released earlier this year by the government highlighting details of the UK’s temporary tariff regime, is a must read.
Designed to minimise costs to business and consumers the tariffs will protect vulnerable industries, however the regime is temporary with up to 12 months application whilst reviewing a permanent approach.
What do you need to know?
British businesses would not pay customs duties on the majority of goods when importing into the UK if we leave the European Union without an agreement.
Under the temporary tariff, 87% of total imports to the UK by value would be eligible for tariff free access.
Tariffs would still apply to 13% of goods imported into the UK. This includes:
- a mixture of tariffs and quotas on beef, lamb, pork, poultry and some dairy to support farmers and producers who have historically been protected through high EU tariffs
- retaining a number of tariffs on finished vehicles in order to support the automotive sector and in light of broader challenging market conditions. However, car makers relying on EU supply chains would not face additional tariffs on car parts imported from the EU to prevent disruption to supply chains
- in addition, there are a number of sectors where tariffs help provide support for UK producers against unfair global trading practices, such as dumping and state subsidies. Tariffs would be retained for these products, including certain ceramics, fertiliser and bioethanol
- to meet our long-standing commitment to reduce poverty through trade, the government currently offers preferential access to the UK market for developing countries. To ensure that access for developing countries is maintained, we would retain tariffs on a set of goods, including bananas, raw cane sugar, and certain kinds of fish
More information on the government website can be found here.
The government has published a series of 106 technical notices setting out information that allows businesses to understand what they would need to do in a no deal scenario so they can make informed plans and mitigate risk.
If there’s a no deal
The UK will continue to have a VAT system after it leaves the EU. The VAT rules relating to UK domestic transactions will continue to apply to businesses as they do now. If the UK leaves the EU without a deal, the government’s aim will be to keep VAT procedures as close as possible to what they are now. This will provide continuity and certainty for businesses. However, if the UK leaves the EU with no agreement, then there will be some specific changes to the VAT rules and procedures that apply to transactions between the UK and EU member states.
Accounting for import VAT on goods imported into the UK
If the UK leaves the EU without an agreement, the government will introduce postponed accounting for import VAT on goods brought into the UK. This means that UK VAT registered businesses importing goods to the UK will be able to account for import VAT on their VAT return, rather than paying import VAT on or soon after the time that the goods arrive at the UK border. This will apply both to imports from the EU and non-EU countries.
For more information visit the government website