UHY Hacker Young | Chartered Accountants

Help for businesses importing goods from the EU

25 February 2019

It seems increasingly likely that the UK will leave the EU in a few weeks’ time with no withdrawal agreement in place. The Government is taking steps to assist businesses that import goods from Europe by introducing Transitional Simplified Procedures and offering grants towards relevant staff training and appropriate software.  

More friction

Even after two years of negotiations and having reached agreement with the 27 countries of the EU last November, it is quite possible that on or shortly after 29 March this country will leave the EU without a deal. If this occurs the 21 month transition period, during which a comprehensive trade agreement is intended to be established, will not come into force, and therefore the UK will immediately become an external trading partner. In the absence of any other intervention importers and exporters will need to complete the same kind of documentation and pay similar import duties as they currently do when trading with non-EU countries. Border checks will be required and these will lead inevitably to delays. For businesses that rely on just-in-time supply chains or import perishable goods, the consequences could be very damaging, and unpopular with the public. For this reason, HMRC has introduced Transitional Simplified Procedures (TSP).

Just as an aside, it should be mentioned that even if a withdrawal deal is in place by 29 March, this will merely introduce a transitional period and postpone the problem until 31 December 2021, giving time, it is hoped, not only to reach a free-trade agreement but to find some way of replicating the current system of “frictionless trade”.

Sign up for the Transitional Simplified Procedure

HMRC has advised 145,000 businesses of the need to prepare for no-deal by registering for TSP. The arrangement aims to reduce delays at ports by deferring the requirement to make customs declarations (normally made at the time of entry) until after the goods have been imported, and delaying the payment of any duties until the month after the date of import. This arrangement will last one year initially.

To be eligible to register for TSP businesses need to:

  • Have an Economic Operator Registration and Identification (EORI) number
  • Be established in the UK
  • Import goods from the EU

The first step is to obtain an EORI number, if you don’t already have one. This can be done online via the Government’s website, provided that your business is already VAT registered. If you haven’t received the Governments advice letter click on this link. To register for TSP (if you already have the EORI) click here.

Grants are available

Surveys reveal that most businesses are not in favour of leaving the EU without a deal, one of the reasons being the cost of the additional bureaucracy attached to importing and exporting. The Government has responded to these concerns by setting aside £8 million for staff training and dedicated software. Of this £5 million is being offered to companies by way of grants.

Training grants are available for companies that complete customs declarations or import or export from/to the EU, or intend to do so in future. They are also available to organisations that complete customs declarations on behalf of others. Small businesses with fewer than 50 employees and a turnover of less than £10 million can receive amounts of up to 70% of the costs of training each employee with skills to complete customs declarations, facilitate other businesses to use import and export procedures, and carry out the technical processes of customs procedures. The maximum grant per employee is £1,050. (Different limits apply to larger businesses.)

IT improvement grants are to meet the costs of software that will help your business to complete customs declarations more efficiently, but it must be a ready-made solution – you cannot use the funding to commission bespoke software. More information, and a link to the application form can be found here.

This is a challenging time for UK businesses, especially those involved in trade with the EU. If you would like advice on planning for the changes ahead please don’t hesitate to contact me a.hulse@uhy-uk.com or complete our contact form.