For many businesses, tariffs will be one of the most visible signs of Brexit. The extent of them in the future will depend on whether the UK can secure a deal with the EU. Here’s what to think about now.
In EU countries there are no customs duties or tariffs on any imports or exports between them. But as the UK closes the door on the customs union at the end of this year, UK businesses will need to transition between this tariff-free zone and a new world where tariffs will need to be considered and, if applicable, paid.
In this series of bite-size ‘Brexit countdown’ articles, we focus on the commercial implications of Brexit 2.0 in certain key areas and set out a high-level overview of the sort of things you should be thinking about with your teams and customers, and what you should be doing to get yourself Brexit-ready.
Last time, we looked at licences, permits and consents. In this article we look at tariffs.
What sorts of things should you typically be thinking about?
Consider these key matters in particular:
- it is still unclear how the UK’s trading relationships with other EU countries and non-EU countries will be governed. Do you import and export goods? If so, is there someone in your team who is responsible for keeping an eye on developments in this area? Things are likely to move fast in the weeks to come
- new or increased tariffs may be payable on both imports and exports, whether of raw materials, components or finished goods which may affect the costs incurred by a supplier or the market into which a customer sells the finished goods. To what extent is your business ready to apply any new tariffs generally? Is it able to deal with any increase in paperwork?
- tariffs could be applied to goods and services provided to and from the EU following the end of the transition period. What are the likely consequences for your business if there is a deal with the EU or if, by the end of the transition period, no deal is agreed with the EU?
- to what extent is your business ready for any changes in tariff rates for trade with countries outside of the EU?
Of course, every business will need to consider its own particular circumstances based on factors such as, in particular:
- its location
- the nature of its goods and services
- the business, economic and regulatory environment in which it operates
- the location of its key customers and suppliers, and
- the make-up of its workforce.
There is no one-size-fits-all approach to the analysis you need to do but thinking about the commercial aspects above can help you decide what legal changes (if any) are necessary now and in the months to come.
At Shoosmiths, we have stayed close to Brexit developments. As always, we welcome any thoughts or comments from you and are ready to help you prepare for Brexit.
We are also producing briefings across all specialisms to keep you informed of legal changes anticipated in light of Brexit.
If you have any queries, do get in touch.
In the next article in this series, we’ll be looking at currency issues.