Crunch time for Brexit, businesses must prepare

Crunch time for Brexit, businesses must prepare

BLOG · BY NICK BOULTON, HEAD OF TECHNICAL AND TRADE · 12 October

We are reaching crunch time when it comes to Brexit negotiations, with less than 12 weeks until the UK will have officially left the EU Single Market. The UK Government has previously warned they will walk away from the table if a deal is not in sight by next week, while the EU had given the end of this month as the deadline for reaching an agreement. Irrespective, some facts will remain the same.

The EUs stated position is that the UK will be treated as a third country from the end of the transition period 1 January 2021. This means wood and wood product exports, when received by your customers in any EU member state will be subject to the same customs processes and requirements that TTF members currently undertake for imports coming from outside the EU.

Logically, when exporting you should look to provide all the documentation and information that your suppliers from outside of the EU currently provide you. This will include EUTR due diligence information and UK export versions of any legal requirements such as plant health or CITES documentation.

In addition, as an exporter you will need to submit an export declaration via the UK National Export System – so you should register on this system if you have not already done so. In many cases this must be a full export declaration made before the goods arrive at the port of export, although it may be possible to use simplified declaration procedures for some categories of products. If the correct export declarations are not made in advance, goods are likely to be delayed or stopped at or before the port of export. More information and links on these mechanisms is available on Gov.UK, and we continue to update our own Brexit Hub whenever we receive new information.

We are also beginning to see some clarity on your questions. The Government has announced that from 1 January 2021, if your business is registered for VAT in the UK, you’ll be able to account for import VAT on your VAT Return for goods imported from anywhere in the world. This means you’ll declare and recover import VAT on the same VAT Return, rather than having to pay it upfront and recover it later. This is a significant positive change for members importing outside of the EU, as previously VAT was due at point of entry. More information on accounting for import VAT on your VAT Return can be found HERE.

The key area which could change this month is if a bilateral trade agreement is signed between the UK and the EU, then exports by TTF members will be duty free. If there is NO bilateral trade deal agreed between the UK and the EU then exports by members to the EU will be subject to the same levels of duty that are currently imposed when these goods arrive in the UK from outside of the EU. Fortunately most wood products will remain duty free, with wood-based panels being the main exception. You can find out more about what duties are payable under the UK General Tariff on our website.

For products subject to duty there is the future potential that duty will be paid when the goods arrive in the UK, and then further duty may be imposed if those goods are then re-exported to the EU. However, there are specific customs mechanisms (e.g. export warehousing, free zones, in transit recording, outward processing relief) which may help to prevent this duplication of duty and members undertaking export should ensure they are fully conversant with such processes or engaged with specialists who are.

We would once again recommend that members make use of the training grants available via the Government sponsored on-line customs academy in order to prepare staff in the practical procedures required for export https://www.ukcustomsacademy.co.uk/

Get ready for UKTR with our interactive PDF

Learn the new due diligence required under the UK Timber Regulations.

This will help your business get Brexit ready with our self-assessment questionnaire, priority map and steps you should take to position your company ahead of the upcoming obligations.

Click on the image to download the PDF.

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