At 11am on 31 December 2020 the UK completed the transition from the EU. A trade deal was reached at the last minute, with some compromises, but an agreement at least gives some clarity on the way forward for businesses.
Now we will see the practical effects of leaving the EU to be felt by businesses and consumers.
The deal avoids tariffs and quotas with the UKs largest trading partner. However, this is conditional on Rules of Origin requirements being confirmed when shipping. To qualify for preferential treatment (zero tariff) at the time of import, the customs declaration in the EU or the UK must include a proof of origin statement/document.
All importers and exporters must have an EORI number to allow trading in either direction and have accurate commodity codes for their products.
Whether a business has the expertise in house or has external support to complete these requirements, these additional requirements will increase costs.
Businesses also need to ensure the supply chain has the ability to provide the appropriate declarations to minimise disruption, as any delays can impact production and distribution arrangements and ultimately further increase costs.
For both importers and exporters it is critical they review the implications of slower movement of goods in and out of the UK on their business and cashflow.
As with any change, there will be challenges as we adjust to new ways of doing business and there are plenty of ‘unknowns’ that will only become clear over time so it is important to review your funding strategy as different types of funding may be required to not just help with increased costs but enabling your business to take opportunities to grow.