Monday, February 4, 2019

HMRC Writes to 145,000 Businesses Deferring Customs Clearance and Duty Payments After Brexit

New TSP Customs Procedures Announced in the Event of No Deal with the EU
Shipping News Feature
UK – EUROPE – There will be a major change in UK policy should the Brexit negotiations end in the 'no-deal' scenario so hated by the majority of the country's shipping and logistics businesses. Whereas it had seemed to be inevitable, should the result of the ongoing talks end in stalemate, that full customs checks and the immediate application of duty would be mandatory HMRC, in cooperation with the Treasury, has now revealed another possibility.

In order to facilitate a normal level of trade and avoid bottlenecks at the country’s ports whilst arrangements are finalised, the customs authority, as it has been reported in the national press, has agreed to waive the anticipated procedures and allow the bulk of goods emanating from the European Union to enter the country unencumbered by red tape.

The truth of the matter is somewhat different. In fact HMRC has now written to 145,000 VAT-registered businesses trading with the EU about simplified importing procedures, and also updated them on the actions that they need to take to prepare. This Transitional Simplified Procedure (TSP) is designed to ease the problems for these companies by allowing faster importation with a subsequent settlement of duties arising.

This situation will nominally exist for a year with a review of the simplified procedures within three to six months and an undertaking that any proposed changes to this regime will be notified to businesses affected with a one year notice period. This arrangement would avoid the need to trade under the way normal WTO rules would demand within which all imported goods would be subject to customs control prior to their release. Announcing the scheme Treasury Minister, Mel Stride MP, the Financial Secretary to the Treasury, said:

”Leaving the EU with a deal remains the government’s top priority. This has not changed. However, a responsible government must plan for every eventuality, including a no deal scenario. Businesses and citizens should ensure they are similarly prepared for leaving the EU.

”HMRC is helping businesses get prepared and, amongst other significant communications, has written 3 times to affected businesses, each time stepping up the advice and encouraging them to take action. This latest letter, and new GOV.UK guidance, announces Transitional Simplified Procedures for EU trade which will ease the transition, especially for businesses new to the rules associated with importing.”

Importers will be able to defer giving a full declaration until after the goods have crossed the border, and payment for a month after that point. Companies wishing to apply for TSP who are importing goods from the EU can do so from February 7 and must be established within the UK and possess an Economic Operator Registration and Identification (EORI) number. Those not registered for EORI can do so here.

The government has issued over 100 pages of advice regarding likely changes post Brexit which can be downloaded here and announced £8 million in support for importers and customs brokers to prepare for the changes.

Photo: Mel Stride MP announced the changes.