GOVERNMENT PUBLISH THEIR ‘NO-DEAL’ BREXIT ADVICE - The BESA
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Friday, August 24, 2018

GOVERNMENT PUBLISH THEIR ‘NO-DEAL’ BREXIT ADVICE

Alexi Ozioro, Public Affairs and Policy Manager

Yesterday Brexit Secretary Dominic Raab set out what he calls the Government’s “practical and proportionate” advice in the event of the UK leaving the European Union without a deal. A number of Ministers are on record saying that a deal is the most likely outcome of negotiations, but “short-term disruption” might be possible without one.

The Government’s published guidance notes include instructions for businesses that might come into additional paperwork at borders, the contingency plans for medicine shortages and the issues organic food growers might face in exporting their produce. There does not appear to be a construction industry document, although there were only a handful of papers released yesterday. With more to be released in batches over the coming weeks, here are a few key points that BESA members may find interesting from the 25 documents published yesterday:

MONEY AND TAX - VAT for businesses if there's no Brexit deal

If there is a no deal Government will implement postponed accounting for import VAT on inbound goods. One of the most praised points of the Government announcements yesterday, Government have been quick to point out they are “listening to the views of businesses and looking to mitigate any cash-flow impacts” by keeping VAT processes as close as possible to what they are now.

Dominic Raab says that more guidance on accounting and recordkeeping will be issued soon. Low-Value Consignment Relief (LVCR) won’t be extended to goods coming from the EU however. This means that all goods entering the UK as parcels, sent by overseas businesses, will be liable for VAT. That is unless they are already VAT exempt like, for example, zero-rated children’s clothing.

For parcels valued up to and including £135, a technology-based solution will allow VAT to be collected from the overseas business selling goods into the UK. Overseas businesses will charge VAT at the point of purchase and will be expected to register with an HM Revenue & Customs (HMRC) digital service and account for VAT due.

IMPORTING AND EXPORTING - Trade remedies if there's no Brexit deal

Government will establish an independent trade remedies system by the time the UK exits the EU, operated by the UK Trade Remedies Authority (TRA). This is a new body to investigate complaints of unfair trading practices and unforeseen surges in imports, which could cause injury to UK industry.

Trading with the EU if there's no Brexit deal

Business will need to fill out declarations when goods enter and leave the UK. This is essentially just an import/export declaration, but a separate safety and security declaration will have to be made by carriers of the goods. So if you are a haulier, airline or shipping business, or you are using one, there might be a slightly slower transit than usual and maybe some extra admin costs.

Business will need a UK Economic Operator Registration and Identification (EORI) number, so they can declare goods for onward movement and ensure their contracts and International Terms and Conditions of Service (INCOTERMS) show they are now an exporter. While this may not be too impactful for BESA members, with concerns around rising material costs we will be hoping for as smooth a transition as possible for any imports bound for construction projects.

Classifying goods in the UK Trade Tariff if there's no Brexit deal

The UK will go from EU Common Customs Tariffs (CCT) to World Trade Organisation (WTO) tariffs. Government hope to be able to offer good trade terms and tariffs to potential new trade partners after Brexit, and so will seek to transition all EU Free Trade Agreements to ensure continuity for both goods imported and exported from the UK.

As part of this the UK will not instantly change the classification of goods in a no deal scenario, neither will it change commodity codes. The idea here is that it makes transitioning simpler, and doesn’t require new potential trade partners to alter any existing systems. This will come in the form of all rules and regulations being set out in new UK law rather than EU law.

WORKERS’ RIGHTS - Workplace rights if there’s no Brexit deal

In a no deal scenario Government say there are no expected financial burdens or impacts for citizens or businesses regarding workplace rights. This has been a particular point of contention between the Government and Opposition, with Labour warning of a ‘bonfire of right’ and the Conservatives readily stating that rights will simply be transposed from EU law to UK law.

Government have said that domestic legislation already exceeds the level of employment protection provided under EU law anyway. Dominic Raab said yesterday “The technical notice on workplace rights explains the steps we are taking to transfer all EU legislation into UK law in time for exit, so workers will continue to be entitled to the rights they have now, such as flexible working or parental leave. In many areas we already go much further than the EU.”

MORE TO COME

With the Summer Recess almost over and Party Conference season fast approaching, there will no doubt be more news to report on Brexit. Westminster is full of rumours over a Conservative rebellion against the Chequers Deal, a Labour Party rebellion over opposing Brexit and a Second Referendum, a leadership challenge to the PM and all manner of political intrigue.

The papers that have already been published are rather short and do not go into extreme levels of detail at the moment. However, the Government have said they will be publishing additional details (such as changes to existing legislation) after the summer.

A list of the proposed no deal technical documents was leaked last week, drawn together from departments across Whitehall. The leak outlined 84 topics and focus areas, which included animal breeding, firearms, vehicle standards and the timber trade. However, a forthcoming construction industry paper does not appear to be on the cards; at least not as part of the leaked list. The announcement yesterday saw 25 of these documents formally published.

We will monitor for any further developments, political and Brexit, and make sure that BESA members are aware of these when they come to light.

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