Two thirds of UK exporters have not taken essential steps to prepare for ‘No Deal Brexit’, according to the latest records from HMRC. Only 70,000 out of 240,000 companies, who export into only the EU at present, have so far registered for an economic operator registration and identification (EORI) number. EORI numbers, which are based on a company’s VAT number, are required by companies in order to complete a Customs Declaration and to comply with other regulations for exporting.
Companies who only send goods into the EU have so far not needed an EORI number as such shipments have not been counted as exports, due to the freedom of movement of goods within the EU. However, if the UK does leave the EU without a deal, the movements of goods into the EU will be counted as exports and so customs declarations will be needed to be completed. The number of customs declarations that will need to be completed in the case of a No Deal Brexit could rise from 50 million to around 250 million.
The number of EORI-registered companies has risen by just 1,000 in the last two months, despite political developments in the UK making a No Deal more likely in that time. The companies who have not yet registered for EORI numbers represent 25% of total UK-EU trade by volume.
Steve Cock, director of KGH Customs Services, told Sky News:
“I think companies are aware of what they have to do but I think there’s still a limit on the number of companies that are actually doing anything about it unfortunately.
“Bigger companies we work with, a lot of big companies, they are well prepared. But equally you’d be surprised by some of the companies that approach you late in the day and say ‘well now we need to do something’ and it surprises us sometimes who they are really.
“There is still time for companies to get their house in order but they can’t leave it more than another month or so.”
The government is promising to launch a major public information campaign urging businesses and individuals to prepare for a No Deal Brexit.
HMRC has also agreed for companies to be able to use transitional arrangements, including ‘Transitional Simplified Procedures’ (TSPs), which allow for six months grace for making customs declarations and declaring VAT on shipments. This six-month period is designed to give HMRC time to develop systems that will handle the significant increase in shipments that are classified as exports. 17,000 companies have successfully applied for TSPs so far.
A spokesperson for HRMC said:
“We are doing everything we can to help businesses get ready for the UK leaving the EU on 31 October.
“Businesses who import or export goods need to take action, the first step of which is obtaining an EORI number [if they don’t already have one].
“It’s simple and free and can be done online at www.gov.uk/hmrc/get-eori.”