6 steps to prepare your business for Brexit
Is your business prepared for Brexit? Business Start Smart is here to help you make sure that your business is well equipped to keep trading across the Channel as the end of the transition period draws near on the 31st of December 2020.
In the event that a new trade agreement is not approved by the above date and the transition period is not extended, all trade between the UK and the EU will be bound by the World Trade Organisation (WTO) rules as of the 1st of January 2021.
How can you make sure your business is ready?
Below are some steps you must take to prepare your business for Brexit including:
1. Register for an Economic Operator’s Registration and Identification (EORU) number – This number is required in the UK and the EU so you can continue to trade
2. Register for Value Added Tax – VAT registration in the country of clearance is important especially if you are importing anything as it makes your business liable for duty and import VAT when you deliver directly to your customers e.g. Incoterm Delivery Duty Paid. Shippers who sell goods valued at or below$135 into the UK will have to collect and pay UK VAT for these shipments as of the 1st of January 2021. This VAT amount must be collected at the point of sale and paid to HMRC through the UK VAT registration. In the case where goods sold into the UK valued above $135, importers must pay the UK VAT. Importers can pay via postponed VAT accounting or through the customs declaration
3. If the consignee is not the declarant you must appoint an Importer of Record (IOR) – The IOR is responsible for customs declarations. For businesses exporting to the EU this can either be an EU-based subsidiary if they are part of the transaction, or an EU-based customs broker. For businesses exporting to the UK the IOR has to have a UK identity
4. Familiarise yourself with the commercial invoice – A commercial invoice needs to be included as the basis of your customs declaration when shipping across a customs border. All shipments between the UK, the EU and worldwide destinations will have to adhere to this after December 31 2020. It is important to familiarize yourself with the requirements to make sure that the information you provide is accurate and complete. Make sure to also look out for harmonised tariff codes of your business’ products and the incoterms for your shipments
5. Electronically submit your commercial invoice – In order to enable clearance to begin before the goods arrive at the border you need to electronically submit your commercial invoice including other documents required by customs. You also need to enroll for PaperelessTM Invoice today
6. Reduce customs complications and costs with World Ease – If shipping multiple parcels across a customs border to many recipients, we suggest that you use World Ease. This service combines your parcels into a single shipment so that they can clear customs in one single transaction. The consolidated clearance can save you time, money and paper as compared to single clearances. Contact Business Start Smart for more information
It is very important that you use the latest version of WorldShip which is a free shipping software to ensure that systems are compatible with PaperlessTM Invoice and World Ease solutions and download WorldShip 2020.
Stay Informed with Business Start Smart. A lot still remains undecided about the future trading relationship but it is clear that when the transition period ends, the cost, effort and time of moving goods between the EU and the UK will increase.