Less than 30 days to Brexit
There is less than 30 days before the Brexit transitional period ends on 31 December. It is still possible for a basic free trade deal to be agreed between the UK and the EU, with indications that the EU Parliament can convene as late as 28 December.
Even if there is a free trade deal for goods, problems are still likely in 2021 for trade between the UK and the EU in three key areas.
- Delays in moving goods by road especially at the Channel ports, caused by the need for import and export entries with associated supplementary documents. The car manufacturer Bentley, with a factory in Crewe has reportedly put five 747 cargo planes on standby to divert incoming parts away from Dover. It has also increased its stock of parts from the usual 2 days production to 14 days.
- It is still unclear precisely what customs documents will be required in 2021 to move goods from Scotland, England and Wales to Northern Ireland.
- The Customs Declaration Service (CDS) is due to replace the existing CHIEF online system used by freight agents to submit import and export entries to HMRC. CHIEF is over 25 years old and was due to be replaced by CDS in 2019 but it is still in use. There is concern whether the dual running of these two systems will cope with the expected 3 million additional entries for UK-EU trade in 2021.
The good news is that importers of goods into the UK from the Rest of the World will gain a significant cash flow benefit from 1 January 2021 with the introduction of postponed import VAT accounting.