With the nation on the cusp of a no-deal Brexit, it’s not too late to make a plan, writes FIRA’s Suzie Radcliffe-Hart, the author of a new guide for the furniture industry.
Since the referendum in 2016, it could be said that the UK has effectively been working its way through the five stages of grief and loss – denial and isolation, anger, bargaining, depression and acceptance – albeit in a somewhat different order.
In April the UK and EU agreed to a flexible extension of Article 50 for six months to 31st October. This meant that there was no immediate risk of no-deal – however, the risk of a no-deal Brexit remained unless the Withdrawal Bill was approved by Parliament.
More recently, the European Union (Withdrawal) (No. 6) Bill (HL Bill 202) has been proposed in order to “Make further provision in connection with the period for negotiations for withdrawing from the EU”, effectively extending this period by a further three months to 31st January 2020. The sum of the bill is to force the PM to write to the EU 27 seeking another extension to the Article 50 withdrawal period – preferably to 31st January.
Interestingly, in the event that the EU agrees to a proposed extension, the bill requires the Prime Minister to agree to the exit date – whether this be to the proposed 31st January or any new exit date which may then be proposed by the EU. This last is, of course, subject to further approval in the House of Commons.
As we are still facing uncertainty, this article is written from the perspective of a no-deal scenario. To clarify, a no-deal scenario is one in which the UK leaves the EU and becomes a third country without a Withdrawal Agreement or framework for a future relationship with the EU. In a no-deal scenario there would therefore be no agreement to apply any of the elements of the tabled Withdrawal Agreement.
Whilst at the time there remained a cautious optimism, it has become increasingly clear from the change in tone of communications across the Government’s information platforms (in particular by the recent high-profile launch of the UK Government’s largest-ever public information campaign to prepare both businesses and the general public for Brexit) that the UK is expected to leave the EU on the 31st October with the focus being on a no-deal scenario.
Despite the earlier, well-publicised EU Exit campaign, the launch of the Partnership Pack and the dissemination of information through the UK’s various trade associations, the Government’s own research shows that 42% of small- to medium-sized businesses remain unsure of how they are able to prepare for Brexit.
Sources of information
For businesses who are yet to begin their preparations or are taking their initial steps, the sheer volume of information available via the campaign and .gov platforms may appear overwhelming. However, a useful Triage Tool is available. This was developed specifically to help UK businesses of all sizes and specialisms take the necessary steps to minimise the impact in the event that the UK leaves the EU without a deal. Based on the responses given to just seven questions, the search function aims to provide tailored information and results for your area of business.
For example, if we consider a business who manufactures and sells consumer goods such as furniture, who distributes their goods via road or rail, who imports from and exports to the EU/EEA and who benefits from protected designs or trademarks, the service will provide approximately 45 specific articles to explain what is changing and the actions that can be taken to keep goods and services moving.
If this still seems a little overwhelming, it may be worth starting with the range of specific sector primers that are available. Each primer collates the top 3-5 issues for a range of sectors, and includes information on importing and exporting, regulations and standards, employees and how to stay up-to-date with any further changes to information, providing links to relevant and more in-depth guidance and information.
Relevant sector primers include: www.gov.uk/guidance/the-retail-sector-and-preparing-for-eu-exit; www.gov.uk/guidance/the-consumer-goods-sector-and-preparing-for-eu-exit; and www.gov.uk/guidance/the-electronics-machinery-and-parts-sector-and-preparing-for-eu-exit.
Movement of goods
Figures from the latest annual FIRA Statistics Digest gave the value of imports from the European Community as £2.73b in 2017, an increase of +10.6% on the previous year (when it was £2.46b), whilst exports to the Irish Republic alone continued to grow YoY, reaching £0.24b in 2017 – an increase of +16.2% from 2016.
For businesses based in the UK, a key element to maintaining movement of goods both to and from the EU post-Brexit is an Economic Operator Registration and Identification, or EORI, number. Whilst around 72,000 companies are reported to have registered for an EORI number, concern was raised that a significant number of companies had not yet registered for this unique ID number and as such would not, in the event that the UK leaves the EU without a deal, be able to continue trading with EU Member States from the date of exit.
In response to this, in late August, HMRC announced that it would take action to ensure in excess of 88,000 UK VAT-registered companies would be automatically allocated an EORI number to maintain trade links with customers and suppliers in the EU post-Brexit.
However, those businesses that are not VAT registered will still need to apply for an EORI number in order to trade with the EU after UK exit, and can do so here.
Further details on importing goods from the EU, including information on customs declarations, transitional simplified procedures and rates of duty can be found here, while further details on exporting goods to the EU, including export declarations and how to check rates of duty and VAT changes, can be found here.
If the UK leaves the EU without a deal on 31st October 2019, there will be changes for every business and individual operating at the UK border.
If you or your business trade any goods or services with the EU, import or exports goods from or to the EU, transport goods by road into or through the EU, employ EU or EEA citizens, or travel regularly to the EU on business, you will need to ensure you are ready for Brexit.
Suzie Radcliffe-Hart, technical manager at FIRA International and secretary of the Furniture Industry Research Association, has compiled a 64-page guide entitled Brexit – the importance of planning ahead, which is freely available to all members of the Furniture Industry Research Association here.
