Businesses in Hampshire who trade overseas are being urged to prepare for ‘significantly more complex’ customs and tax procedures once the Brexit transition period ends.
Hampshire Chamber of Commerce says it is vital to take early action well before the new border operating environment comes into force at the start of 2021.
The advice follows the publication of the government’s post-Brexit ‘border operating model’ which sets out the technical details that traders, hauliers, ports and carriers need to observe regarding the movement of goods between the UK and the European Union.
“We can’t avoid change as we leave the single market,” said Ross McNally, Hampshire Chamber’s Chief Executive and Executive Chairman. “The trade agreements we have now will have to be replaced with others, and our border and customs arrangements will be different from the way they operate today.
“Businesses should anticipate and prepare for a higher level of customs declarations and associated administration. The government guidance candidly states that customs declarations will be significantly more complex.
“Whether you import, export or do both, there are only a few short months left to ensure your critical systems and processes are ready for the new administrative workload your business will face when clearing goods through UK ports.”
British Chambers of Commerce have estimated that the number of customs declarations made by traders nationally is likely to increase from 55 million a year to around 300 million. The extra cost to business is estimated at around £7 billion per annum.
Despite a six-month deferment plan for paying import taxes on ‘standard’ goods from the EU, everything from clothes to electronics, traders will still need to follow new customs paperwork, keep specific records and have correct approvals in place, from January.
At the same time, full customs requirements will apply to all ‘controlled’ goods – including military equipment, medicines and drugs, and excise goods such as alcohol and tobacco – whether they arrive from the EU or elsewhere.
A system of postponed VAT accounting will be available but, again, correct systems and processes will need to be ready first before companies can take advantage of approved payment delays.
Ross added: “There will be extra administrative costs for businesses getting to grips with the new operating model. Our message is to start upskilling now as time is running out.”