Further no deal guidance for UK businesses

Aug 27, 2018

In addition to the VAT proposals, the UK has set out "practical and proportionate" advice in the form of 25 papers in case the UK leaves the EU without a deal.  The papers are the first batch of the promised 80 guides with the remainder promised by the end of September.

During a speech on planning for a no deal Brexit, UK Brexit Secretary Dominic Raab said that while reaching a deal with the EU was the “overriding priority” and “by far the most likely outcome”, the UK “must be ready to consider the alternative possibility”.

The guidance, which spans to 25 documents, includes instructions for businesses in the areas of importing and exporting, farming, money and tax, medicine regulation, EU funding and work place rights.

Specifically on trade, the guidance says that in the event of a no deal Brexit, trade with the EU will be on World Trade Organisation terms and this would mean immediate changes to the customs procedures for UK businesses that trade with the EU.  The UK will publish its tariffs that will apply to goods imported into the UK from the EU before it leaves the EU and doesn’t envisage any immediate change to commodity codes. We examined trading under WTO rules in detail in Series 3 of Back to Brexit Basics.

The UK government is urging businesses to start analysing their supply chains to understand their interactions with other EU countries and get an understanding of the customs rules and tariffs that will apply after Brexit.  The rules that will apply are the rules that currently apply when the UK trades with countries outside the EU and with which the UK does not have a free trade agreement.  There will also be additional safety and security declarations required. 

Get registered for EORI

Traders are encouraged to register for a UK Economic Operator Registration and Identification (EORI) number (which is needed to lodge electronic customs declarations and to apply for Authorised Economic Operator (AEO) status) and should also consider whether it might be appropriate to engage a customs broker, freight forwarder or logistics provider.  Businesses should also establish whether any additional customs software would be required in the event of a no deal. All of this, the UK government acknowledges, will come at a cost to the trader.   

Common Transit Area

The UK has applied to re-join the Common Transit Convention when it leaves the EU (remember this in Series 6 of Back to Brexit Basics) which will allow cross-border movements of goods.

Northern Ireland

On Northern Ireland, the guidance states that the UK “must respect our unique relationship with Ireland” and that in the event of a no deal the UK would “stand ready to engage constructively to meet our commitments and act in the best interests of the people of Northern Ireland.” No solution was offered on how to avoid a hard border on the island.