HMRC publishes five step guide to Brexit, but what comes next?
With a new Prime Minister in place, the Brexit tension is starting to tighten its grip once again. And with all eventualities still on the table, HMRC has published a step-by-step guide to international export in the event of no deal.
In the event of a no-deal Brexit, the UK would immediately leave the EU without, as the phrase suggests, an agreement. Under Theresa May’s doomed Chequers plan, for example, our EU exit would include a 21-month transition period.
Not so with a no-deal. As Jason Hunter, a former international trade negotiator and anti-Brexit campaigner, explained, our post-Brexit future would begin one second after the 31 October 2019 (or the government triggers a no-deal departure).
In this reality, trade would initially have to take place under World Trade Organisation (WTO) terms. These rules are, to say the least, substantially less lax than the current single market arrangement where goods, capital, services, and labour can move freely.
With the future up in the air, HMRC has put together a simple, easy-to-follow five-step guide to trade with the EU after a no-deal Brexit. The tax authority outlines the steps as follows:
Get a UK EORI number for your business: You’ll need a UK Economic Operator Registration and Identification (EORI) number to trade internationally, and you should already have one if you’ve traded with countries outside the EU.
Decide who will make the customs declarations: Contact the organisation that transports your goods out of the country to find out if they can make customs declarations for your goods. If they can’t, you can hire an agent to make the declarations, or make the declarations yourself.
Apply to make exporting easier: Transitional simplified procedures are simple measures to make importing as easy as possible for you. If you register for transitional simplified procedures, you’ll be able to transport your goods into the UK without having to make a full customs declaration in advance.
Check what your customers will need to pay: HMRC has a long list detailing how trade with different countries will be affected by a no-deal Brexit and the impact this will have on your customers.
Check what you need to do for the type of goods you export: Depending on what you're exporting, there might be other things you'll need to do to get your business ready. For example, you might need to change the labelling on the packaging for your goods or apply for licences.
Beyond risk mitigation
Risk mitigation is, somewhat understandably, a big focus for British businesses that export internationally. But, according to Duncan Levesley, who works with Grant Thornton’s Growth365 international team, Brexit is a chance to take a breath and reassess.
“The interesting thing about Brexit is it’s getting British firms to look wider for opportunities. Europe is clearly our biggest market as things stand and there are a number of reasons for that: it’s geographic proximity, regulatory alignment and stability.
“But Brexit has called these into question, and due to the uncertainty, it has led a lot of the businesses we work with to think more strategically about where across the world there might be an opportunity for their product or service.”
Europe is still the most popular destination, Levesley said, but the gap has been narrowed between it and North America and Asia. “Businesses need to take a deep breath and look at the global markets that have an appetite for their products,” he said. “Maybe it’s North America or a high-growth emerging market, it’s not necessarily Europe.
“When we speak to mid-size companies, there’s a tendency to be opportunity-driven. They follow the opportunity rather being strategic. So my advice would be to take a step back and think about what criteria make a great market for my business.
“Resources are finite, and there’s only so much you can do at one time. Rather than taking the obvious route, look at where the biggest bang for your buck is and focus your energies there.”