UK Government issues step-by-step guide to a no-deal Brexit – meanwhile early adopters are already on the move
Coming with the caveat that: ”you do not need to take any of these steps at this time. We will let you know when the time is right for you to take a course of action” the 10-step guide to Brexit has just been published by UK Government. Their advice dovetails into the advice given to governments and businesses across the 27 remaining nations issued by the European Commission.
Meanwhile, many companies are already implementing contingency plans – a much lower risk and cost option than being caught out on day 1 of a cliff-edge no-deal Brexit (Insight Nov 11, 2018).
Scroll down for a quick scan of how businesses are responding
The 10 step process - also available as a flow-chart:
Step 1: register for a UK Economic Operator Registration and Identification number
Step 2: find out the commodity code of your goods
Step 3: determine the value of your goods
Step 4: check whether your goods are prohibited or restricted
Step 5: establish the origin of the goods
Step 6: consider whether you are eligible to use any facilitations
Step 7: choose the correct customs procedure code for your goods
Step 8: declare your imports to customs
Step 9: pay duty on goods
Step 10: keeping records
Contact us at: firstname.lastname@example.org for guidance on the requirements for future trading. Our partner ecosystem includes some of the most experienced organisations in trade facilitation under WTO regulations – set to become the likely framework and conditions that will apply to UK-EU trading at Brexit.
Things you need to consider:
Excise duty. Goods are not normally released by HMRC until you’ve paid all the charges due. This normally relates to any VAT or import duty that may be due. Some goods may be liable to excise duty which is chargeable in addition to any customs duty which may be due.
VAT treatment for imports. A ‘no deal’ scenario will introduce postponed accounting for import VAT on goods brought into the UK. This means that UK VAT registered businesses importing goods to the UK will be able to account for import VAT on their VAT return, rather than paying import VAT on or soon after the time that the goods arrive at the UK border. This will apply both to imports from the EU and non-EU countries.
Authorised Economic Operator (AEO). AEO status is an internationally recognised quality mark indicating that your role in the international supply chain is secure, and that your customs controls and procedures are efficient and compliant. You can apply for AEO status for customs simplification (AEOC), AEO status for security and safety (AEOS) or both.
Brexit Bites: Publicly announced responses to Brexit - as at November 2018
Pfizer. $100 million invested in Brexit preparations: "Pfizer’s preparations are well advanced to make the changes necessary to meet EU legal requirements after the U.K. is no longer a member state, especially in the regulatory, manufacturing and supply chain areas."
AstraZenica estimates its Brexit-related costs at £40 million for duplicate drug testing requirements, and building up product stockpiles.
8 health providers have warned of medicine shortages in the event of a no-deal Brexit: "we do not believe that the current medicine supply plans will suffice, and we will have widespread shortages if we do not respond urgently."
Steris PLC - a company with $2.6 billion in annual revenue - is planning to move from the UK to Ireland due to Brexit. As an Irish company, the Irish tax authorities and not HMRC will receive its taxes going forward.
Chubb (world's largest publicly traded property and casualty insurance company) is moving from the UK to France. It has already completed registration with the French regulator - and aims to complete its move on 1 January 2019.
Columbia Threadneedle switched £6.2 billion worth of assets from UK domiciled funds to Luxembourg.
Barclays is moving €250 billion of business to Dublin ahead of Brexit, making it Ireland's largest bank. It has already bought a new office building there in preparation.
Liberty Specialty Markets is redomiciling its insurance company from the UK to Luxembourg.
Admiral Group is planning to move some of its UK business from Admiral Insurance Company Limited to Spain. Admiral Europe Compañía de Seguros, S.A, was set on 20 December 2017.
A ferry company has brought in 2 new ships, including the "Brexit Buster" ship Celine (600 truck capacity, world's largest short sea roll-on roll-off ferry). This is in line with European Commission ideas for contingency planning to avoid delays and paperwork when transiting via the UK - sending freight directly from Ireland to Belgium and Spain.
SwissQuote cancelled its expansion plans in London after the Brexit vote - and bought a bank in Luxembourg instead.
STM Life moving part of its business from Gibraltar to Malta to guard against the effects of Brexit.
JPMorgan – amongst other leading US banks - are preparing to shift over 250 billion euro in assets from London to Frankfurt.
Dutch plan growers are forecasting an increase the price to UK buyers of 50% - due to customs delays, additional safety tests and red tape. There are no alternatives in the short -term as 90% of shoots come from abroad.
XL Insurance Company SE (a company writing over £2 billion/year in insurance premiums) is moving from the UK to Ireland in January 2019 due to Brexit. The move is explicitly described as due to Brexit in its annual accounts.
Bank of America has spent between $300 and $400 million preparing for Brexit, including establishing new subsidiaries in Paris and Dublin and relocating personnel.
Tesco and other supermarkets have announced that they will be stockpiling supplies and food against the disruption of Brexit. Note that one cold storage company is now completely booked to capacity.
Funding for UK tech firms through the European Investment Fund (EIF) fell by 91 per cent during 2017 to €61.1m (£53m) - compared with €708.8m the previous year.
The UK Government Department for Brexit (DEXEU) has spent an estimated £100 million on staffing costs since the referendum
UK Government has spent £5.5 million keeping Manston Airport open – just in case it's needed as additional overflow lorry parking after Brexit.
Sales of sterling-denominated bonds have slumped 34% this year, as companies put off investing in the UK due to Brexit uncertainty.
Royal & Sun Alliance Insurance plc is moving approximately 6% of its insurance and reinsurance business to a new legal entity in Luxembourg - with the intention that the move be effective 1 January 2019.
AIG operates in Europe through a single legal entity established in the UK (with branches across Europe). Brexit has meant restructuring and moving all non-UK business to a Luxembourg entity (planned by December 2018).
500 jobs across French banks are moving out of London due to Brexit.
The Government has 7000 civil servants working on Brexit – and HM Treasury has approved funding for 9000 more. Over 1000 of these are in Border Control and Immigration Agencies (Commons Home Affairs Committee on 5 November 2018).
GSK Brexit estimate Brexit costs at: "up to £70 million over the next two to three years - with subsequent ongoing additional costs of approximately £50 million per year."
Financial firm, CME Group's BrokerTec, is leaving London for Amsterdam because of Brexit, taking its $240 billion/day repo market with it.
Tokio Marine Group is using a "Part VII transfer" to transfer business from two UK-based subsidiaries (Tokio Marine Kiln Insurance Limited, and HCC International Insurance Company Plc) to a Luxembourg entity.
Hiscox are transferring some aspects of their business to Luxembourg, and expect the Part VII transfer to complete by 1 January 2019. "The Transfer will move £421.5m of liabilities (and the corresponding assets) from HIC to HSA."
QBE Limited is also reorganising affairs across several of its group companies, using the Part VII mechanism.
Credit Suisse is moving 250 jobs to Germany, Madrid and elsewhere in the EU27, including Luxembourg.
Schaeffler, a car parts company, is closing two UK factories, in Llanelli, Wales, and Plymouth (affecting 570 jobs) because of Brexit.
Scotland Yard is to spend £2.4 million on setting up a no-deal Brexit "safety net unit" as a contingency against loss of open access to Europol and other security related data.
Home Office trial of its new “EU citizen registration” system was able to process 1,053 applicants in 2 weeks. Full system will need to handle over 3 million people within 2 years (equivalent to a steady rate of 30,000 per week).
And finally, the UK Government has spent £4.2 billion pounds on Brexit preparations - £2.2 billion in previous Budgets - plus an additional £2 billion announced last month.
Contact us for a Brexit Impact Assessment on your business – or for guidance on Brexit contingency planning.
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