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Checklist advice for business on a no deal Brexit

Despite the continued uncertainty of Brexit, business should be preparing for the effects of a no deal Brexit and putting contingencies in place. Following Brexit’s latest update and Theresa May’s second crushing defeat a no deal Brexit is looking like the most likely outcome based on recent events.

Many of our clients have asked us for advice on what to consider and what steps they should take to proactively manage the situation and reduce Brexit impact. In preparation we have prepared the following document for you to download which outlines all the steps that your business needs to consider as 29 March draws closer.

Impact of a no deal Brexit on business

Should the UK exit the EU in a no deal Brexit scenario then the EU will immediately cease to have oversight in the UK. Following the effects of Brexit UK business will need to adapt which effects everything from importing and exporting to recruitment and product certification.

Businesses that buy and sell from the EU should have contingency plans in place which will need to be flexible to cope with a variety of possible outcomes.

Advice to business – start preparing now

In the event that the UK exits the EU without a deal, from 11pm GMT on 29 March 2019, many UK businesses will need to apply the same processes to EU trade that apply when trading with the rest of the world. Here are some of the areas you should consider, particularly if you import or export goods to the EU and haven’t had the need to complete the various forms before.

Checklist

Movement of GoodsReview
1. Register (unless you already have) for an Economic Operator Registration and Identification (EORI) number - https://www.gov.uk/eori
2. Consider an agent to help with completing import/export forms – www.export.org.uk or DIY the forms (see below).
3. Contact your haulage company to check whether additional information is needed so they can make safety and security declarations or whether you will DIY these –guidance can be found from HMRC: https://www.gov.uk/guidance/declaring-yourgoods-at-customs-if-the-uk-leaves-the-eu-with-no-deal
4. Export rules are specific by sector so review “Preparing your business for the UK leaving the EU” on the Gov.uk website: https://www.gov.uk/business-uk-leaving-eu
5. If you import goods then consider registering for “Transitional Simplified Procedures” (TSP) which enables registered importers to defer making customs declarations and paying duty. See: https://www.gov.uk/guidance/register-for-simplified-importprocedures-if-the-uk-leaves-the-eu-without-a-deal
6. Review guidance on how to prepare for the Customs Declaration service (CDS) which outlines what you need to do to get ready for the CDS. This depends on whether your business currently uses the “Customs Handling of Import and Export Freight” (CHIEF): https://www.gov.uk/guidance/how-hmrc-will-introduce-the-customsdeclaration-service
7. Review HMRC videos, webinars and consider registering for email alerts – Choose EU Exit: https://www.gov.uk/government/collections/hmrc-webinars-email-alertsand-videos?utm_source=referrer&utm_campaign=card-transactionprogramme&utm_medium=1-to-many-letter&utm_content=educational
8. You may choose to register for “Authorised Economic Operator (AEO) status which enables “Trusted” businesses simplified customs procedures. Application does take time and is complex. See: https://www.gov.uk/guidance/authorised-economicoperator-certification
9. HMRC have acknowledged that a “no deal” scenario may affect the working capital of many businesses and are reintroducing postponed accounting for duty and VAT which will be settled on VAT returns and not at the port. See: https://www.gov.uk/government/publications/vat-for-businesses-if-theres-no-brexitdeal/vat-for-businesses-if-theres-no-brexit-deal for further guidance.
10. If you trade in goods with the EU and keep stock in the EU for supply to EU customers you will need local VAT registration. You could also be asked to appoint a fiscal representative (and should have bank guarantees as they will be jointly liable for VAT you owe). See: https://www.gov.uk/government/publications/partnershippack-preparing-for-a-no-deal-eu-exit
11. If your business currently uses the UK VAT Mini One Stop Shop (MOSS Union scheme) which allows you to account for VAT - normally due in multiple EU countries, you can continue to use the MOSS system after 29th March, but must register for the VAT MOSS non-Union scheme in an EU member state: https://www.gov.uk/guidance/vat-it-system-rules-and-processes-if-the-uk-leaves-theeu-without-a-deal
12. Consider forming a company in the EU.
Supply Chain AnalysisReview
1. In the event of "no deal" all exports and imports to the EU will be subject to tariffs under the rules of the World Trade Organisation (WTO). You will need to identify where “inputs” come from and which categories of product they fall into so you can work out the tariffs that will apply.
- Identify the countries you will trade with (EU and non-EU) and the value they represent.
- Identify EU and International standards your business is currently required to comply with.
- Identify cross border services provided.
- For further guidance see: https://www.brexittoolkit.co.uk/tools/ourblog/post/13635/brexit-preparation-guide-supply-chain-mapping
2. Review WTO and EU rates online and check the tariff data for your business. See: https://www.wto.org/english/tratop_e/tariffs_e/tariff_data_e.htm and http://madb.europa.eu/madb/euTariffs.htm
Contracts with EU CompaniesReview
1. If you currently have business agreements with EU companies these may need to be redrafted to cover off areas such as customs arrangements, import duties, how VAT is accounted for, definitions such as “Territory”, dispute resolution and unanticipated administration as a result of Brexit. Consult your lawyer for advice to avoid any potential issues sooner rather than later. See also: https://www.gov.uk/guidance/international-trade-paperwork-the-basics
EU Employees in the UK and Post Brexit PlanningReview
1. Review all EU employees currently working in your business and ascertain whether they are applying for “Settled status” by 31 December 2020. See: https://www.gov.uk/government/publications/eu-settlement-scheme-employer-toolkit
2. EU citizens who wish to stay for longer than 36 months will need to apply and qualify under the terms of the UK’s new skills-based immigration system, which will begin from 1 January 2021.
3. Your UK employees working in the EU may need to apply for similar status.
4. Do a plan of your aims hopes and ambitions (strategy) for your business and examine the need for further employees from the EU and whether you should talk to a lawyer regarding immigration compliance post Brexit. See: https://www.employment-studies.co.uk for guidance.
Other MattersReview
1. If your business has a “.EU” domain name you should check the eligibility to hold such a domain here: https://www.gov.uk/government/publications/guidance-on-eutop-level-domain-name-registrations-in-the-event-of-a-no-deal-eu-exit/guidance-oneu-top-level-domain-name-registrations-in-the-event-of-a-no-deal-eu-exit
2. If you are involved in eCommerce then read the Governments EU exit guidance: https://www.gov.uk/government/publications/ecommerce-eu-exit-guidance
3. Data Protection – you may need to comply with new license requirements and changes in regulation. The Information Commissioner’s Office (ICO) has published a six step checklist to prepare for data compliance: https://ico.org.uk/media/fororganisations/documents/2614365/leaving-the-eu-6-steps-to-take-final.pdf
4. Copyrights, Intellectual Property (IP) and trademarks - at this point in time it is not clear if EU trademarks would be applicable in the UK post Brexit. If you own intellectual property rights contact your lawyer on protecting your IP post Brexit. For Copyrights see: https://www.gov.uk/government/publications/copyright-if-theres-nobrexit-deal and for IP see: https://www.gov.uk/government/publications/exhaustionof-intellectual-property-rights-if-theres-no-brexit-deal and for trademarks see: https://www.gov.uk/government/publications/trade-marks-and-designs-if-theres-nobrexit-deal
5. Management of currency risk. There has been a downward trend in the pound to Euro rate post the vote in 2016. Volatility may occur post Brexit and you should talk to your currency adviser about managing your currency risk leading up to the 29th March and beyond.
References and Further ResourcesReview
1. Prepare for EU exit: https://euexit.campaign.gov.uk/
2. British Chamber of Commerce: https://www.britishchambers.org.uk/page/brexit/business-brexitchecklist
3. ICAEW: https://www.icaew.com/technical/economy/brexit
4. EEF (The Manufacturers’ Organisation): https://www.brexittoolkit.co.uk/tools/ourblog/post/13635/brexit-preparation-guide-supply-chain-mapping
5. European Union: https://europa.eu/youreurope/index.htm#en

Advice on what to do now to prepare for Brexit

Following the above advice we have provided on the outcome of a no deal Brexit, we would suggest that you start speaking with suppliers, customers, couriers, freight forwarders and logistics suppliers and work with them on realistic expectations.

We would advise that depending on your business sector you may wish to seek additional professional advice. For any business who wish to discuss their individual situation and seek further professional advice please contact your normal contact at HWB or Michaela Johns on 023 8046 1256.

Download your PDF checklist advice for business on a no deal Brexit.

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