The time left until a potential ‘no deal’ can now be measured in a matter of days and hours (one less when the clocks go forward this weekend). The extension agreement has given businesses a little more breathing space to sort out their affairs with 12 April 2019 being the new default end date if no way out of Parliament’s impasse is found. At time of writing, no one strategy commands a majority in the House of Commons leaving the ultimate terms of exit as unclear as at any point in the negotiations so far. In a week where the EU voted to initiate the scrapping of DST in Europe, time is rightly seen as a precious commodity – one which businesses should use to their advantage by informing themselves of the easements that would be available to them in the event of a no deal.
On 13 March HMRC launched a ‘No Deal’ tariff that they would implement for an as yet undefined temporary period.
The crux is that the vast majority of UK tariffs would be reduced to Nil. Most importantly, World Trade Organisations Rules will mean that these rates will apply to both European and Rest of the World Imports. This means that even businesses who have never purchased from Europe may find their customs liability disappear overnight.
The no deal tariff is still in draft form, however the temporary rates can be accessed here: https://www.gov.uk/government/publications/temporary-rates-of-customs-duty-on-imports-after-eu-exit
Where a good does not appear on HMRC’s reference spreadsheet, it will incur no duty. Businesses must however remember that this has been announced only as a temporary measure, meaning the rates should not be factored into long term business planning. Tariffs are a protectionist measure, so the government decision to remove them on this scale does carry a risk of leaving UK manufacturers exposed to international competition.
The other major recent change has been the extension to the provisions of HMRC’s time and cost saving border offering: Transitional Simplification Procedures (TSP).
The launch was originally covered in our previous 6 February blog https://www.pkf-francisclark.co.uk/blog/by-the-grace-of-hmrc-easements-in-a-no-deal-scenario/?service=42
The changes announced since February involve:
- Widening the scope of TSP to encompass all goods arriving at any port or airport –as long as they are being brought in from the EU.
- An extension to the date on which the first submission of supplementary customs declarations are made and any import duty paid to 4 October 2019.
- Extending the deadline by which a guarantee needs to be provided to 30 September.
All of these changes should be good news for businesses and further contribute to HMRC’s strategy of moving compliance away from the border.
In summary our overall guidance to businesses currently acquiring goods from the EU is to:
- Make sure you have an EORI Number
- Apply for Transitional Simplified Procedures – TSP
- Submit a duty deferment application if you do not have a deferment account or CCG
- Review the No Deal Tariff to establish your potential duty liability.
Daylight Savings may be continuing in the UK for the time being, but the means to real savings are also in place. All that is required is your time.