“Brexit” is the word at the tip of everyone’s tongue in 2018. The word that meant absolutely nothing a few years ago and means almost everything now; particularly to importers and exporters. All UK businesses that trade internationally are currently being forced to sit on their hands and wait for a Brexit deal to pass so they can start figuring out what adjustments they’ll need to make to stay afloat.
However, many businesses have decided that waiting around for the sky to fall is not helping anyone, and have instead decided to take some initiative by preparing for the worst.
Brexit may not happen…
The UK government recently published its first batch of 24 technical notices, which go some way towards revealing what a no-deal Brexit would look like for import and export businesses. The businesses that know the value in preparing for the worst would do well to study these notices thoroughly. They paint a picture of a much more laborious process, with British companies forced to make customs and safety/security declarations and duty-free trading ending entirely.
With the EU counting for 43% of UK export business, it goes without saying that all exporters will be hit heavily by a no-deal Brexit. There’s no way around it, and we can’t say with any exact certainty exactly how individual traders will be affected, as it will depend on what goods their business relies on. However, regardless of your circumstances, if you’re a UK exporter, there are a number of safeguards that could help soften the blow:-
A no-deal Brexit will mean that all exporters will need to register for a UK EORI number in order to continue trading. All businesses are advised to sign up to the government’s Brexit email alert system, which will inform them as soon as registration is open. Depending on the type of goods your business exports, you might also have to apply for an export license.
The UK will be implementing a new electronic customs declaration system in Match 2019. Make sure that your business can integrate with this system or arrange a broker to do it for you.
Foreign exchange will always have a massive impact on the bottom line of any businesses, but with exporters, the impact is even more profound. With the pound in perpetual flux and set to get worse before it gets better, many businesses are utilising the services of forex solutions companies such as OANDA to keep an accurate and concise account of their international finances.
If your business applies for Authorised Economic Operator status, it could become part of an international scheme that simplifies certain customs procedures. The application process can take up to a year, so make sure you apply as soon as possible.
After Brexit (particularly a no-deal Brexit) some contracts will almost certainly need to be renegotiated to meet the new trade terms (whatever they might be). International trade paperwork can be daunting, so make sure you get out in front of it and prepare now!
Whilst the UK might be able to continue operating to European product standards, it’s not a given. This could be a severe blow even more damaging to an exporter’s business than trade tariffs, as product compliance might be completely technically different on an international level. Prepare by making sure your products comply to international technical specifications sooner, rather than later.
Finally, and perhaps most crucially, map your supply chains so you’re prepared for WTO rules. If you already export to non-EU countries you should already be familiar with the details, so applying them to your EU imports and exports is a simple (though probably time-consuming) task that could save you a small fortune once the 29th of March, 2018 rolls around.