This week, the Government published the new Border Operating Model which will take effect from 1 January 2021.
This document follows the announcement on 12 June that rather than putting in place full border controls on EU movements, the UK will introduce a revised three stage approach. This approach is intended to stagger the customs documentary and financial obligations placed on UK businesses over the first six months of 2021 by applying three key dates: 1 January, 1 April and 1 July.
The Border Operating Model (BOM) covers the broad three stage approach but it also drills down into a significant amount of detail which demonstrates that applying the new approach and the related protocols may not be as simple as businesses first assumed.
The BOM is based around a ‘core model’ for imports and a ‘core model’ for exports which will impact all movements of goods. It also outlines the additional customs requirements for a range of goods which will impact many business sectors within the UK.
The ‘core model’ assumes an Australia style future relationship with the EU which is an interesting premise, particularly as Australia does not have a trade agreement with the EU, only a 12-year-old 'partnership framework' agreement which aims to facilitate trade in industrial products by reducing technical barriers with no specific rules set for tariffs.
Is this another way of saying that the new provisions are based around a ‘no deal’ scenario, akin to WTO rules? You decide…
Some key changes which UK businesses will need to be aware of include:
There are other actions which UK businesses will need to adhere to for goods imported into the UK including applying for prior approval from HMRC to operate some customs procedures and measures. UK businesses will need to consider any lead in time to allow any associated applications to be considered by HMRC and to ensure these approvals are in place by 1 January 2021, as required.
For UK businesses which export to the EU, you will be required to submit a full export declaration and meet any additional customs requirements of the country of destination from 1 January 2021.
Further updates are anticipated and HMRC intend to write to some businesses with a high value of trade with the EU to discuss their business and what they need to do to prepare. Unfortunately, those businesses to be contacted will not extend to all of the estimated 145,000 VAT registered businesses in the UK who trade with the EU or the additional estimated 100,000 businesses who trade with the EU but are not UK VAT registered.
For businesses which have not considered any end-of-transition-period planning now is an appropriate juncture to consider the customs changes, how your business may be affected and use the next few months to prepare and to be proactive rather than reacting to repair a situation.
For businesses which have already planned what they intended to do, it would be prudent to revisit these plans to consider whether the recent government announcements will affect those plans and whether they need to be revised.
If you need any customs advice, help to navigate the impending changes or assistance with your end-of-transition-period planning, please contact Lucy Sutcliffe - National Customs Duty Director at firstname.lastname@example.org
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