The UK Government has published its long awaited border operating model. It makes clear how the border with the EU will work – at least in most cases. But some important questions remain, and the cost to business, in customs administration work alone, will be substantial. The government has responded to some key demands from British Chambers of Commerce for measures to improve cash flow. But if there’s not a deal, the cost will be higher again – and key questions remain unanswered.
While businesses will welcome more detail on processes for trading goods overseas, some questions still remain unanswered, including on trade across the Northern Ireland border and the operation of the Goods Vehicle Management System. We will continue to look at the detail and how it affects businesses over the coming weeks.
The Border Operating Model provides clarity and certainty for the border industry and businesses, including technical detail on how the border with the EU will work after the transition period and the actions that traders, hauliers, ports and carriers need to take. It covers all of the processes and systems, across all government departments, that will be used at the border. It provides clarity on the end to end journey for moving goods across the border – with information about controlled goods and new government systems that will support trade.
To help businesses prepare for these changes and continue to trade, guides on how to import and export goods are available in the form of a ‘journey’ (see below). That’s important since so many UK based companies currently trade only with the EU. They need to clearly see every step they need to take to ensure that their goods are transported successfully.
This will cost businesses money. With full border controls in place at all ports from January 1st next year, regardless of any deal that is agreed with the EU, an estimated 200 million more customs declarations will need to be made by traders annually. At a cost of £20 to £45 per declaration the cost to business could be in the region of £4bn to £9bn.
The UK government has listened to the British Chamber network and reintroduced Postponed VAT Accounting, as well as allowing the deferment of duty and VAT on EU imports for at least 6 months from January 2020. And many businesses will appreciate the introduction of bond-free duty deferment accounts, which will provide much needed help to cashflow for businesses and reduce import costs.
Along with the European Commission’s Communication last week on preparing for the end of the transition period, it’s clear firms that import and export across the UK-EU border should take action now including the appointment of customs intermediaries and addressing approvals and certifications.
With its network of expert members and the backup of its UK chambers, Britcham is there to help you. If you have questions, contact us at BusinessContinuity@britishchamber.eu
Glenn Vaughan – Senior Adviser
Hyperlinks also below.
How to import and export goods between Great Britain and the EU from 1 January 2021: https://www.gov.uk/government/publications/how-to-import-and-export-goods-between-great-britain-and-the-eu-from-1-january-2021
European Commission – Getting ready for the end of the transition period: https://ec.europa.eu/info/european-union-and-united-kingdom-forging-new-partnership/future-partnership/getting-ready-end-transition-period_en