How can a business work out costs of different scenarios?
The cost scenarios are difficult to calculate for the customs partnership. It will vary depending on a number of factors including the complexity of the supply chain, the current processes, level of understanding of customs processes and where in the organisation the responsibly lies. The complexity of the required tracking of goods throughout the supply chain and the potential duty reclaim process will also impact costs.
Our Brexit Indirect Tax Impact Analysis (BITIA) data analytics platform is able calculate the potential costs of a number of potential outcomes to the Brexit negotiations, including a hard Brexit. Built into the tool is an estimate for additional costs for customs declarations (at an estimate of £35) which is in line with the anticipated cost used by HMRC. Utilising BITIA will provide insights to businesses of the potential increase to their costs post-Brexit.
What else can a business do now to prepare for customs changes?
Regardless of the eventual outcome of the Brexit negotiations, there are number of ‘no regrets’ steps businesses can build into their Brexit contingency plans. These include:
- Reviewing current customs processes, to ensure that they are up to date and in line with current business requirements including rules or origin, customs valuation rules and tariff classifications
- Obtain binding tariff rulings, as well as binding origin rulings if relevant, for goods traded to provide certainty of the information being declared to customs.
- Utilising customs reliefs that are beneficial
- Apply for AEO status, which will not only reduce customs delays, but will provide comfort that HMRC have audited your customs processes and approved them. In a Max Fac scenario, where mutual recognition of AEO is obtained, business obtaining AEO approval now will be able to benefit from mutual recognition without delay.
- If you haven’t had to deal with customs declarations before and need to develop customs management skills in your business, you could use apprenticeship levy funding to train someone as an international freight forwarding specialist1.
Get in touch with Louise Scholey to discuss the impact of customs models on your business.