Keeping the EU Referendum simple: Import and Export Administrative processes.
The squabbling, fear mongering and cloudy statistics game is over for politicians this Thursday 23rd June.
Thursday June 23rd is the date the UK collectively decides whether to stay or leave the EU.
Immigration, policing and security, work and pay, cost of membership, economics and consumer affairs, are just some of the personal considerations and impacts we have to consider.
The Remain and Leave campaigners have thrown a frenzy of statistics, guess work and debates at us.
Politicians, economists, sector leaders and the media have all contributed to the mass of confusion. Fear mongering has been the main form of attack, but only now are we starting to see some neutral facts or considerations from those that recognise the aforementioned are too busy battling with each others ego’s, to tell us what we really need to know or try to imagine.
Tax and Paperwork
This article is simple. At First European we are highlighting for the benefit of all manufacturers, warehouse operatives and those involved in booking transport of goods across Europe, some logistical issues facing the process of Import and Export logistics; mainly tax and administrative processes.
If you transport road freight across Europe, via freight forwarders, express or groupage services, you will be affected.
It’s important to understand the current process of road freight and transporting goods across European countries include free trade laws, licences and reasonably simple paperwork.
Remember, we have been in the EU since 1973. Whilst laws, tax and processes have changed over time, there are thousands of manufacturers, importers and exporters that only know how to trade under current conditions. Thousands of new businesses and SMEs have been incorporated on the basis they understood the costs and processes in place as an existing EU member country. When these trading terms change there are likely to be £mega-million shocks for many ‘gap in the market’ filling traders. Road freight, air freight and sea freight will never be the same again across the EU.
So what are some of the headline changes we will need to consider? Here’s a run down of the basics…
- There will be huge implications and changes to tax and paperwork for manufacturers that import components only, for manufacture and subsequent export to Europe of finished goods. The HM Treasury notes that Brexit would lead to ‘higher import prices (that) would put these UK businesses at a competitive disadvantage. This would make the UK a less attractive destination for international companies, lowering investment and employment.’
- When will VAT and customs transactions be made? At present there is no customs clearance process or duties that apply and VAT doesn’t have to be transacted before the goods can be moved from the receiving port. A ‘Brexit’ could only bring the assumption, there will be large delays in processing and administrative roles. Can your business handle the resource and knowledge of this, more over, can your cash-flow handle immediate payments alongside your existing domestic tax payments?
- What is our understanding of price implications of the WTO (World Trade Organisation; a global international organization dealing with the rules of trade between nations)? To remain compliant with WTO rules would require renegotiation with 161 member countries. This means the UK, while adding its own surcharges on British export, will also have to impose tariffs on imports from the 58 countries it currently shares free market access. Will that be as attractive to your current suppliers and customers?
The debate will continue in earnest until 23rd June. We’ll report back with more information to support our clients following the result.
For a quote or more information about Export and Importing to Europe through First European, please contact us on +44 (0)1282 839525