Multiple deadline extensions for introducing full import control measures for goods being imported from the EU to the UK have meant businesses have put customs compliance “on the backburner” leaving many unprepared as the deadline nears.
“We’re seeing businesses failing to prepare because they seem to think everything’s going to be delayed,” says Nicola Haynes, customs tax specialist at Grant Thornton. “Brexit was delayed, we’ve had Covid, all the issues with freight delays, shortage of drivers, and all sorts of things.”
“It’s kind of just kept going on the back burner and maybe [some companies are] optimistic that these [changes] will be further delayed.”
On Wednesday, Brexit Minister David Frost announced goods imported from Northern Ireland and Republic of Ireland would not be included in the upcoming deadline.
“The Government has decided […] to extend, on a temporary basis, the current arrangements for moving goods from the island of Ireland to Great Britain for as long as discussions on the Protocol are ongoing,” he said.
However, the current easements on full customs controls still apply to the rest of the EU and will end as of January 1, meaning companies importing goods will need to have the correct paperwork in place at the point of entry.
According to a recent survey by Grant Thornton, 27 percent of mid-market businesses are not aware of the full border implementation deadline, while out of those that do, 18 percent said they were not yet prepared for the changes.
Gerry Myton, partner at HW Fisher, points out the mixed messaging has not helped smaller businesses who have been struggling with the added pressures from the pandemic.
“The main issue here is for smaller businesses who have been watching the government stall in terms of full border control on imports and spending money without certainty is difficult when combined with the pandemic and its impact on business.”
Many businesses had already put in place contingency plans to minimise the impact of the Brexit transition period end on January 1, 2021.
Those who have, are now looking to review plans and “make more sensible choices”, says Haynes. “They prioritised getting the goods to the customers and that did incur a lot of costs to businesses.
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“What we’re seeing now is a little bit of a trend of people coming and revisiting those Brexit plans [and asking] are they still fit for purpose? Is there a better way of doing this? And what can we do to take out unnecessary costs in that process.”
Those businesses left unprepared with the upcoming deadline will have rippling impacts on the rest of the supply chain, adds Myton. “Goods will sit in port and remain uncleared until the correct import procedures are followed.”
Similarly, businesses may need to ensure they have the right documentation from the start of the import journey as operators look to reduce transportation delays, says Haynes.
“The ferry, train and channel tunnel operators are [making sure they] have the customs declaration. There is nowhere for them to wait [and] nowhere for them to stop. So, they’re doing prevention activity on the embarkation side.”
Further requirement changes are scheduled for July 1, 2022, when phytosanitary certificates and physical checks on sanitary and phytosanitary goods will be introduced at specific border control posts.
Haynes highlights that firms will need to ensure communication is strong to minimise complications on the supply chain.
“Communicate between the finance teams, logistics teams, buying teams, haulage firms and intermediaries you’re using. They all need to coordinate together to make sure everybody’s on the same page and have all the information, so the goods don’t get delayed.”