9 Out of 10 UK Companies Unprepared For Brexit Crimson Tape – 14 June 2019



Brexit Red TapeOne of many promoting factors of Brexit was that it could allow the UK to “minimize EU crimson tape”, releasing UK companies from an pointless administrative burden. Proponents of a “bonfire of crimson tape” by no means mentioned what measures they wished to see completed away with, in fact. It was at all times an illusory promise. When buying and selling with a non-EU firm, the executive necessities are set by WTO and authorities, in order that received’t change. The entire level of the only market inside the EU is that it facilitates commerce inside the bloc comparable to buying and selling between members turns into as straightforward, as “frictionless” as doing enterprise with one other firm domestically. Clearly, leaving the EU will disrupt this method, rising the burden of crimson tape, moderately than relieving it.

As an example this level, Her Majesty’s Customized and Income (HMRC) launched a scheme, the Transitional Simplified Procedures scheme (TPS) in February (baring in thoughts that Brexit ought to have gone forward on the finish of the next month!) which was designed to facilitate necessities for corporations importing items to the UK from the EU. TPS must obviate the necessity for companies to make declarations on the border for imported items and defer obligation on the great for 12 months. Nevertheless, by the tip of final month, lower than 10% of the 240000 companies who have to register had completed so, simply 17800 registrations.

As a pre-requisite for TPS, companies have to receive an “Financial Operator Registration Identification” (EORI) quantity from HMRC – this was not required for companies that traded solely inside the EU earlier than, in fact. Solely 69000 of the 240000 companies that may want an EORI quantity presently have one. While HMRC programs can address 11000 registrations per day and the method itself solely requires 10 minutes, it exhibits that a lot of British enterprise isn’t ready for Brexit. That is even supposing HMRC wrote to 145000 VAT-registered companies (from September 2018 onwards) that commerce solely inside the EU advising them that they would want an EORI quantity. Some 95000 non-VAT-registered companies will even want an EORI quantity, taking the whole involved to 24000.

Within the occasion of a “no deal” Brexit, there can be no transitional interval and if, as Boris Johnson, the favorite to win the Conservative management race, claims, the UK will depart the EU with or with no deal on 31st October, these necessities will come into drive on 1st November 2019.