The UK government is currently running an open consultation until April 2020 on the establishment of a number of Freeports in the UK after Brexit has happen. The government has seen the effect of Freeports in Jebel Ali and Shanghai and hopes that this can be repeated here, boosting trade,jobs and significantly private investment. One of the areas which has put its self forward is the humber region ports, consisting of Immingham, Grimsby and Hull which are operated by ABP. They are going to face stiff competition as every single port and inland terminal in the UK will be desperate to be awarded this status for the trade port. Southampton, London Gateway, Felixstowe and Liverpool are likely to be awarded the status by the amount of existing trade they already handle and having significant sway in the industry and government. If this does happen it then leaves a possible six other locations within the UK.
For the uninitiated a Freeport is a secure customs area either located at or nearby ports or based inland near a strategic resource which the Freeport can take advantage of. The Freeport is a place were business can be carried out within that countries borders but does not have to follow the normal customs rules. Usually goods which are imported into a Freeport are not subject to pay any import duties, taxes or import excise until they leave the Freeport area and officially enter the local domestic market. If the goods are re-exported nothing is payable. Often the customs declaration when import and exporting the goods is a more simplified version of the doing a full customs entry giving a cost saving in time and labour. This is not the main benefit however, with the ability to rework and manufacture goods within the zone. This means raw goods, or unassembled goods can be brought into the Freeport zone from various sources around the world without being tax. These goods can then be made into another product or assembled and then imported into the domestic market or re-exported to another market. In both cases the finished product can be declared as being from this country and may mean they attract an overall reduced level of duty than what their raw counterparts would have had, making the product final sale price much lower.
The UK government wants Freeports to appeal to the widest range of businesses so more than one industry sector can benefit. Taken directly from the consultation document put out by the government the objectives are:
As the government wants to encourage the Freeports to get the businesses which operate in the area to regenerate the area and view innovation as a positive rather than a negative they are going to have to solve the problem of who manages the Freeports. Which is one of the questions being asked in the consulting document. The issue is most of the larger companies who could manage these operations, are not only many years behind the current technology curve, they have very little interest in the requirements of SME businesses. These larger operators have limited understanding and/or willingness to adopt new cutting edge methods which modern SME businesses often are adopting meaning they are forced to use archaic methods which may need employing very expensive and highly skilled employees or consultants. This alone would severely limit or stop any innovation.
All business who work in the supply chain should have a look at the consultation document. Responses can be made directly through the UK consultation portal. They also accept postal responses directly to the International Trade Department. The address is given in the consultation document. The portal web address is https://www.gov.uk/government/consultations/freeports-consultation
Originally the UK government intended to reduce the majority of customs duties to zero. However the UK government is now consulting on replacing the current import tariffs with 4 bands to cover the majority of goods. The consultation will run from the 5th March 2020 and the government is wanting to hear from all business importing goods into the UK on how they feel the new tariff system should be implemented. Overall the UK government wishes to simplify the current complex tariff which it still shares with the EU until 31st December 2020.
The new import duties are expected to be consolidated around four bands.
As with the previous plan, certain products would be exempt and have their own custom import duty system. Currently there is no list available of what these products will be.
Today is brexit day. At 2300hrs the UK officially departs from the EU after 47 years. However we do not fully exit until 31st December 2020. For the next 11 months the UK will trade under all the same rules as before and there will be no change in the UK customs arrangements with the EU and the rest of the world. Between now and December the UK government will try and reach trade agreements with not just the EU all other countries in the world. The outcome of these agreements will define the UK relationship with its trading partners for the foreseeable future.
There will be changes in customs entries after the 31st December. Our website will be updated with information as new procedures are agreed and what action importers and exports will need to undertake. We have several pages dedicated to specific manufacturing sectors which will be updated as the UK government updates its exit plans.
With the Conservatives winning the UK election on 12th December 2020, they had no problems in getting Boris Johnsons Brexit deal passed on the 20th December 2019. If the European Parliament agrees to the deal the UK will officially leave on the 31st January 2020. As a deal has been done there will be a transitional period which will run until 31st December 2020. At this point technically all the trade deals and other related legislation will be in place with the EU and trade will then continue under these rules.
It is still possible for the UK to leave under a NO DEAL situation if the UK and EU are unable to agree final separation terms during the transitional period. In this case this would also happen on the 31st December 2020.
In order to make the BREXIT transition easier for organisations the UK government is introducing a transitional simplified procedure (TSP) when import goods. Traders registered for TSP will not need to make a full customs declaration at the border and will also be able to defer paying their customs duties.
Organisations which wish to use the TSP systems will have meet the following requirements:
There trader must then follow a set procedure either directly or through their appointed freight forwarder or customs broker on declaring the goods. More information can be found on the TSP page in our BREXIT guidance section.
If you are part of a VAT group then you will need to check to see what your EORI number is. You may need to make a new application for your own EORI number.
Non VAT registered sole traders and organisations will still need to apply through the HM Customs website for an EORI number. You will need one if you are buying or selling from the EU once BREXIT happens.