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Party Opinion: The Brexit Factor

Mark Brett is the UK agent for both Boland Party and ITI (UK) and has years of party industry experience under his belt. In his latest blog, Mark takes a look what retailers need to be aware of when the new Brexit regulations come into play on 1 January, 2021.

“Over the last four years , I have tried as much as possible not to write about Brexit. However, from a purely practical point of view I have relented, in the hope I can inform in an apolitical way.

Unbiased (I keep biting my lip even when I only write those words), I am going to try and outline some facts which will hopefully inform traders who have been buying from suppliers within the EU on what they need to do.

So let’s start with some facts. There are 11,000 containers of UK Government PPE at Felixstowe docks. Ships coming into both Felixstowe and Harwich have been subject to delays for some time now. The Customs IT system is not fully tested yet. Every UK point of entry (ports and airports) runs different types of software for customs declarations. It is mooted there will be an all-singing, all-dancing single system by 2025.

Regardless of whether there is a deal or no deal on 1 January 2021, things will change big time. If you did not really understand the words ‘free movement of goods’ you will then!

What’s to do then ? If you import absolutely anything from the EU or intend to then the following two steps are essential.

  • Apply for an EORE
  • Apply for deferred custom declarations and VAT payment

You have to do the first before you can do the second and you can only apply for deferred declarations and VAT payment if you are not on the HMRC ‘naughty’ list.

The C1202 form is also important as it is a direct debit mandate for HMRC and without this you are unlikely to be approved (although it does have to be posted, which requires reliance on the postal service at an already extremely busy time of year…).

If your application for deferred status is confirmed it means two things:

  • From 1 January to 30 June you can defer making your customs declarations (you must keep a record of all your transactions during that period).
  • The agreement that all VAT transactions between states did not carry VAT on the invoice stops on 1 January. From then, there will be no VAT on an invoice from an EU supplier but you will have to record the VAT that would have been due on that same invoice in your VAT returns.

Without doubt I will have missed certain elements but these are the basics. If a deal is reached, I get the impression that declarations will still have to be made – what they may have to contain is another matter. One thing is for certain is that you will have to record the VATable amount as that will certainly be due on 1 July.

None of this helps with the importing from nations not in the EU but who have free trade agreements with the EU. We have made a couple of deals – notably Japan, Switzerland , Norway and Iceland – but there are a number of significant trading nations where we will no longer have a free trade deal, such as Mexico, Vietnam and Turkey.

And I am not so sure there is a lot of help available. There are grants for training on customs procedures and there are also many HMRC webinars, although having recently sat through one, I would not raise your hopes of celestial enlightenment. Maybe others are better…

I lied. At the start I said I was going to be apolitical. I have been but now I am not. The UK Government has been floundering about in very deep waters dealing with Covid and no matter what your political beliefs, no Government would have got it right. It is one of life’s undeterminables and will continue to be so. The Government has a duty to preserve and protect the lives of its citizens. Where there are definitive actions that could be taken they should take them.

Which brings me back to Brexit. I am a remain voter accepting of the UK decision to leave. What I cannot agree with is reckless political ideology that increases the risk to both health and wealth. Even Brexiteers agreed that the first months of Brexit would be very hard on the economy, and that was pre-Covid. But how could they expect hundreds and thousands of businesses – currently dealing with more economic, financial and emotional hurdles than at any other time since the second world war – to prepare for this?

So please tell me why the UK Government has chosen not to doing anything about the one thing it did have control of  – the Brexit transition. Take back control, whatever that means, but at least wait to do so until you when can see the steering wheel.

This truncated article was taken from a blog post on Mark’s personal website which can be read in full here.

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