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How should I prepare to trade with EU countries after Brexit?

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Get ready for change

Whatever the outcome of Brexit, the EU will continue to be a very important trading partner for Scottish companies. Whether you export or import there will be changes coming.

Negotiations on any future trading relationship between the EU and UK won’t start until after a Withdrawal Agreement is concluded. In the meantime, it's vital to make practical plans for continuing to trade with Europe.

Customs procedures

Businesses will need to follow customs procedures in the same way that businesses currently do when exporting goods to a non-EU country. In particular, this will mean completing customs declarations.

For companies who only export to EU countries at present this will be a new procedure to manage. All other exporters will need to use the new Customs Documentation Service processes rather than the existing CHIEF system.

How do I prepare?

Impact on free trade agreements

Brexit will also have an impact on international exporting and importing under EU free trade agreements (FTAs) with the EU.

The UK Government also intends to create new FTAs between the UK and other important markets.

These are likely to include agreements with the USA, Australia, NZ and the Trans Pacific Partnership.

Impact on trade tariffs

Brexit will also have an impact on trade tariffs. In the event of no deal we expect WTO tariffs to be introduced.

Typically these will be in the range of 3-5% but can be up to 40% in the case of some agricultural and food products.

A key benefit from agreeing a UK/EU FTA in the future will be is to avoid or reduce tariffs.

Impact on contracts

Contracts with clients and agreements with suppliers and agents will need to be reviewed to the reflect the changes that Brexit brings.

This is another area where businesses can begin to prepare now, by assessing which contracts will need reviewed.

How do I prepare?

Consider carrying out a business audit of your commercial arrangements with third parties. Factors such as your business’ location, regulatory environment, location of key customers and suppliers together with the make-up of your workforce should be considered.

Brexit may affect many issues, such as:

  • Tariffs on goods
  • Staff cross-border travel
  • Exchange rates
  • Customs checks
  • VAT
  • Changes to the framework of law relating to your business’ activities under its contracts

For example, do existing contracts contain territorial references to “the EU” and if so, how do these need to be updated?

In what currency must payments be made and who bears the risk of any change in exchange rates during the term of the contract?

Will Brexit result in changes to the tax treatment of payments under the contract, for example changes to the way VAT is applied?

You should consider seeking legal advice if you have any specific concerns.

 

Got a Brexit planning question?

Get in touch with our export advisers for full details of how we can help your business grow in EU markets and beyond.