When the UK’s transition period comes to an end in 2021 it will mean a huge change in the workload for the British and European companies who trade goods across the EU-UK borders. Learn more about how the trade will be affected by the UK’s post-Brexit border operation plan right here.
Deal or no deal. That’s not just an American game show where you can win money if you choose the right suitcase. It is also the uncertainty many people and companies have been living with since the UK left the European Union on the 31st of January 2020.
Because Brexit affects many people – and many aspects of life on the European continent. Everything from immigration, security, and aviation, to access to fishing waters and, of course, trade.
Uncertainties are pretty much ingrained in Brexit and still is to this day. Because so far, there is no deal between the UK and the EU.
So firstly, let us get a quick overview of where we stand today with Brexit. If you already are up to speed on that – you can jump down and read more about the rules and regulations the UK government will implement when Big Ben is done chiming on New Year’s Eve and we officially step into the year of 2021.
Not much has been straight forward since the UK stepped out of the EU on the 31st of January 2020. Since then the two parties have been in discussion, trying to come up with a deal that will satisfy them both.
Since the UK left the EU, the country has been in a transition period. This means, that the UK – even though it isn’t a member of the EU anymore – still follows EU regulations. Forming a transition from being an EU member state to not being a member anymore. A period that should give the UK time to adjust to the new reality and for the country to make a deal with the EU. A deal that would also cover the new regulations for EU based companies trading with the UK.
As it currently stands, the UK and the EU haven’t reached an agreement. A fact, that is leaving companies around Europe in the unknown about how they will be able to do business across the UK border. The EU has declared that it will require a full customs check of all goods entering the EU from the UK in case of no agreement.
The transition period ends on January 1st, 2021. If there is no deal by then, the post-Brexit border operation plan will be put into force by the UK government. What exactly will that mean for importing and exporting across the border? Find out below 👇
No deal post-Brexit
200,000,000. That’s how many new pieces of paperwork it is estimated to be produced at the UK borders with the new customs procedures with the EU after January 1st, 2021. An amount of paper and new procedures that will require British companies to hire around 50,000 new customs agents so they will be able to get through the customs jungle.
With a no-deal Brexit, the UK’s post-Brexit border operation plan will be put to use. However, it will be implemented in three stages. Let’s have a look at those and see what they entail.
Stage 1: Standard goods
Stage 1 will be put into force from January 2021.
Standard goods is the keyword in this first stage. Everything from clothes to electronics goes under the term ‘standard goods’. When this stage 1 is implemented, all companies that import standard goods into the UK must be ready to deal with some basic customs requirements. For instance, you would have to make sure that you keep sufficient records of the cargo you import.
If you’re importing cargo into the UK from January, you will also have to pay VAT – Value Added Tax. You can pay the tax immediately, but you also have another possibility.
In this first stage, as an importer, you have six months to fill out the customs declarations that are needed. You can choose to do the payments – such as paying the VAT – when you fill out these customs papers.
Other goods, other rules
On other imported goods the customs papers can’t wait for the six months. That goes for:
- Controlled goods
- Excise goods
That can be goods such as alcohol and tobacco.
With this kind of cargo, standard customs declarations must be in place when crossing the border.
If you, on the other hand, export products out of the UK you will need to have export declarations and the UK Safety and Security declarations ready regardless of what goods you’re transporting.
Stage 2: Meat, honey, eggs
The second stage in the post-Brexit border operation model will start in April 2021.
In this stage, the focus is on another type of cargo. If you trade any animal products such as meat, honey, milk, and egg products you need to pre-notify the customs and make sure to have all health documentation in order. The same rules apply if you trade regulated plants or plant products.
If any physical checks happen, they will happen at the destination of the products until July 2021.
Stage 3: All in
This is the final stage in implementing the post-Brexit border operation model. It will be put into action from July 2021.
All companies moving goods over the UK border will have to make full customs declarations. Paper that must be ready when the import happens. You will also have to pay the tariffs – there’s no waiting for six months any longer.
The checks on animal and plant products will from now on take place at the border of Great Britain. No longer at the final destination of the shipment.
You can read the entire 206 pages about the UK’s border operation model here.
What it will mean for you
If the post-Brexit border operation model is put into force it will mean vast changes for EU based companies trading with UK companies and vice versa. With the three stages, all goods entering the UK from EU countries will be subject to a full customs check. Bringing with it a great deal more work compared to today.
One of the things highlighted in the 206 pages paper, is how important customs intermediaries will be. They help you find your way in the jungle of customs declarations and make sure the papers are submitted. However, pulling 50,000 customs intermediaries out of the hat is a problem that is causing knitted eyebrows amongst traders.
So does the tight time-frame given to adjust to the changes, with the first new regulations stepping into force in five months. Road Haulage Association, Chief executive, Richard Burnett, said to Lloydsloadinglist:
“Firms still don’t know what forms will be required, how they should be completed, who should complete which forms, or where they will need to be sent. This is vital information that needs to have as soon as possible and should already have received if they’re to have enough time to prepare for the new trading arrangements with the EU.”
Until the end of the transition period on 31st of December 2020, we can’t know if the EU and the UK will come to an agreement and offer other solutions for the trade crossing the borders.