Brexit is likely to have a major impact on goods supply chains, whether or not a trade deal can be reached with the EU. This checklist sets out the key issues that UK exporters need to consider.
If there is no trade deal with the EU, the following should be considered:
- Tariffs: do you know how much more the goods you export will cost if they were to be subject to tariffs (as is likely in the event of no deal)? Would this make your goods uncompetitive? Note that tariffs are usually paid by the importer – but you may be liable to pay them if, for example, you have agreed to export on the basis of the DDP Incoterm (see below). In the event of no deal, the EU will apply its existing tariffs on third country, which are publicly available; we can help you work out how much more would be payable than an present.
If there is a trade deal with the EU, the following should be considered:
- Proof of origin: will you be able to provide your customers with proof that your goods originated in the UK so that they can qualify for preferential tariff treatment? Click here for guidance.
All the issues listed below should be considered whether or not there is a trade deal with the EU:
- Exports to non-EU countries: is there a risk that higher tariffs could apply due to a failure to roll over EU-negotiated trade agreements? Click here for guidance.
- Changes to border processes: do you understand what changes UK businesses exporting goods to the EU will face from 1 January 2021? Click here for guidance.
- Risks of non-compliance: do you understand the risks of getting border-related paperwork wrong? Click here for guidance.
- Preparing for new border processes: are you ready to comply with new border processes? Note that EU border formalities for third country goods are expected to apply to UK exporters in full from 1 January 2021. Click here for guidance.
- Product conformity: do you understand what is required to prove that the goods you export meet relevant standards? Do you need to appoint an authorised representative in the EEA and/or obtain approval for your products from an EU notified body? Will your product labelling need to be amended? Click here for guidance.
- Risks of disruption and mitigation strategies: do you understand the risks of Brexit-related disruption at Channel ports in particular? Click here for guidance. Have you made contingency plans to mitigate these risks? Click here for guidance.
- Contracts (including Incoterms): have you reviewed your contracts with suppliers and customers? In particular, are you using the appropriate Incoterm and have you considered the impact on pricing and performance e.g. delivery deadlines? Click here for guidance.
- VAT: do you understand how to prove that goods you have exported will be zero-rated for VAT purposes? Do you also understand the implications of the VAT position for your contractual terms, especially if you plan to export using the EXW Incoterm? Do you know whether you will be required to register and account for VAT in EU countries where your customers are based? Click here for guidance.
- Record-keeping: have you amended your record-keeping processes, particularly in relation to the VAT position and (if there is a trade deal with the EU) proof of origin? Click here for guidance.
Finally, if you rely on goods imported from the EU to use in your manufacturing process, see our Brexit UK importer checklist.