Brexit: HMRC issues warning of essential actions with 70 days to go

HMRC is writing to traders urging them to step up their preparations ready for departure from the European Single Market.

The letter comes in the same week as the Government announces a national lock-down and the extension of the Coronavirus Job Retention Scheme. Therefore, HMRC is especially keen that agents draw their clients’ attention to the advice in the letter.

Businesses need to act now

The key message is that businesses must act now. Not even a last-gasp free trade agreement will save companies from the extra processes required to continue trading with the EU.

“It’s really important that businesses act now – a free trade agreement will not remove any of these requirements. Unless you have all the correct processes, contracts and agreements in place you will not be able to trade with the EU from 1 January 2021,” the letter notes.

What’s changing?

From 1 January 2021, businesses that send goods from Great Britain to customers in the EU will be responsible for completing export declarations for those goods.

Businesses that import goods and have a good compliance record will have the option to defer customs declarations for up to 6 months, provided the goods are not on the controlled list. However, they must still keep records of everything they import, this is called an entry in declarant’s records.

Businesses that important items on the controlled list (such as animal products, alcohol or tobacco, or firearms) will have to make declarations from 1 January 2021.

Traders with a poor recent compliance history will not be able to defer declarations and will receive a separate letter explaining that they need to make full declarations.

Finding a customs advisor

HMRC strongly urges companies to enlist the help of a third party, such as a customs agent.

“Import and export declarations are complicated, requiring specialist skill, knowledge and IT, including government authorisations,” says the letter.

However, this may be easier said than done. Demand for customs advisors is rising sharply and there is already a serious skills shortage, but there are still organisations that can help.

Businesses should therefore make it a priority to find an advisor, and accountants should encourage them to make this a priority.

“Now is the time to speak to these companies so you have everything in place by 31 December 2020, and to ensure you can continue to trade with the EU,” says HMRC’s letter.

“The sooner you contact these organisations the more likely it is that you will secure the services you need.”

Further information

David Nunn is Content Manager at AAT.

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