It’s been four years since the UK officially left the European Union (EU), yet the much spoken of demise of UK PLC has not materialised. Exports of goods to the EU have fallen by circa 12% whilst the cost of doing business has risen.
As we head into 2024, Gerry Myton, Head of Indirect Tax at HW Fisher explains how the shadow of Brexit never strays too far away and shares two updates that businesses need to be aware of.
New Brexit checks
The 31st of January 2024 brought the first stage in border controls on the import of plants, animals and food into the UK from the European Union under what is called the Border Target Operating Model (BTOM). The BTOM classifies plant and animal products into three risk categories: high, medium and low. For example:
In addition, anyone exporting meat/dairy products will require a vet in the country of origin to certify that the products are disease free by completing a 7-page form whilst plant products will need similar from a plant health inspector.
It has been estimated that this aspect of BTOM will add £200m to import costs which invariably will lead to higher prices with a potential knock-on impact to inflation and could influence the Bank of England regarding the pace of any interest rate reductions. It’s no wonder that this measure was delayed five times whilst exporters to the EU faced these issues from the first day of Brexit, back in 2020.
These changes are only the start. From the 30th of April 2024, physical checks at the border on medium/high risk goods come into force at specially designated border control facilities, and from October 2024, safety and security declarations will be introduced for medium and high-risk goods.
Northern Ireland
The Backstop, the Northern Ireland Protocol and the Windsor Framework all caused much debate, most ill-informed. It is hoped that the Safeguarding the Union document, published at the end of January 2024, might finally resolve the conundrum of Irish Sea Trade.
The creation of the UK Internal Market and the scrapping of paperwork will be welcomed by many, but the big question on the mind of businesses that are paying taxes to fund the £3bn plus package to Northern Ireland will once again be – why can’t we have the same advantages that Northern Ireland has with free access to the EU single market?
Instead UK businesses face increased costs from the aforementioned border controls implemented on 31 January that do not apply to importers of similar products located in Northern Ireland.
Overall, there is no doubt the latest legislation is an improvement on previous agreements as it seemed irrational that trade between parts of the same political union required customs declarations. It seems to me that the UK government is pushing at an open door when it comes to infrastructure on the Irish border and the EU amends agreements.
If your business has been impacted by Brexit and you’d like to discuss your options with Gerry, you can get in touch with him here.
We’d love to hear from you. To book an appointment or to find out more about our services:
