Due to working in International logistics for over 30 years in sales and operations manager, Paul Uglow speaks about how to prepare for a hard Brexit.
One of the earliest milestones memories was closing the port operations for the customs clearance at Portsmouth and Poole for my employer LEP International.
“Over the years I have specialised in the USA automotive-UK market, Far East to Europe retail imports and helping to design the transport element of the supply chain for high profile companies.
Currently my main effort is working with Meachers customers on preparation for the potential of a hard Brexit, part of that preparation due to not knowing yet what the HMRC Customs clearance solution will be.”
To counter this we have put together a shopping list of ‘to do’s’ for importers of exporters:
• Get a VAT and EORI number.
• Identify what the commodity (tariff)numbers are for the products you are moving
• Establish with your overseas supplier or customer what your terms of sale will be. (Incoterms)
• Understand how to declare value of goods. (Freight cost & goods value)
• Confirm origin of goods.
• Establish if you need a licence to export or import products to and from EU.
B. Import/ Export Procedure
There appears to be 3 methods of processing cargo through customs at the moment
- Customs will just open to boarder and allow importers to pay duty and VAT along the lines of what was the “Intrastat process”. This we do not expect to happen as the back log of work for HMRC will be horrendous and also lead to the opportunities for increased criminal activity.
- Proposed by HMRC, 2 weeks ago, Transitional Simplified Procedure TSP. Aimed at companies doing their own customs clearance, direct online with payment of duty and VAT taken from company accounts, this is not managed by customs broker.
To trade with TSP – companies must be EORI, VAT, account registered, must be established in UK, the procedure only applies to trucking, RORO ports, Channel Tunnel, Dover, ETC.
The TSP – declaration must be made prior to vehicle/truck boarding the ferry/train. Further declaration made within 4 working days of arrival of good in UK. Duty by direct debit 15th of month
- New computerised Transit system NCTS
• Import and export of cargo on the T1 Document
• Document raised prior to vehicle departure
• Shippers and consignee with AEO can move cargo without customs authority
• However non AEO companies will require customs authority to move cargo prior to shipping
The reason for the difference of customs procedure for the RoRo ports is due to the different nature of how cargo moves.
• Air and Sea freight arrives on vessels, unload into a warehouse or stack and can wait until the customs process is complete.
• A trailer has a driver and there is nowhere to wait for hours let alone potential days while the cargo clears customs.
What is essential is to account for movements.
• Keep full records on each movement or job, HMRC Customs need 6 years of records
• Ensure cargo is electronically customs entered despatch and arrival must be complete.
• We suggest a check list per job.
• Remember if a T1 form used to export is not discharged in Europe you are responsible for paying UK customs the VAT/Duty here:
You will need to keep the following
Shipping note/Airwaybill/bill of lading
• Commercial Invoice
• Packing list
• Customs entry
We recommend that businesses investigate alternative methods of Transport if Dover Congests.
• Air – via LHR/ LGW/ STN
• Sea – Containers and RoRo via seaports.
• The aircraft or vessels all move to and from Europe.
• Note – sea freight the internal width of sea containers is less than trailers, ie. approx 2.34m wide
• As additionally opposed to 2.4m for pallet wide trailers or rail containers so a 12m Euro pallet wide container can fit 24x120x100 pallet positions.
• 12m (40ft) sea containers can fit 22x120x100 pallets positions.
If you feel that your company needs some help with contingency plans to be developed or more information about how Brexit could affect your business, then please contact Paul Uglow on 023 8073 9999 or [email protected]