No-Deal Brexit Update – EORI Numbers, why they matter
Do you know what an Economic Operator Registration and Identification (“EORI”) number is?
If the answer is no and you buy from or sell to the EU, then this is a must read as you’ll not be able to trade with the EU in a No-Deal Brexit without an EORI number!
More detailed guidance can be found in our ‘Economic Operator Registration Guide‘.
On Wednesday 21 August 2019, the Chancellor announced more than 88,000 VAT registered companies across the UK will be auto allocated an EORI in order to keep trading with customers and suppliers in the EU after a No-deal Brexit.
Businesses auto allocated an EORI will be receiving letters from HMRC in the next two weeks.
Why is the government doing this?
The government had clearly hoped more businesses would have applied voluntarily for an EORI number (with only 72,000 companies having already registered for EORI numbers) given the fundamental importance of having an EORI number in a No-Deal Brexit scenario and that the aim was to get businesses ready for the original 29th March 2019 No-Deal Brexit timeline.
Although badged as an ‘acceleration’, auto allocation of EORI numbers is better categorised as a potentially overdue acknowledgement that a significant number of businesses and individuals have not taken even the most basic of No-Deal Brexit preparation steps the government had hoped for necessitating direct action by the Government.
This is a welcome development but a very limited development and does not scratch the surface of what businesses and individuals need to do to prepare for a No-Deal Brexit.
The current action by the Government only allocates “UK EORI” numbers which in the event of a No-Deal Brexit will not be valid in the EU. See our guide for the importance of the distinction between a “UK EORI” and an “EU EORI” in the event of a No-Deal Brexit
Every little helps- but not a lot
Practically, an application for a UK EORI number only takes around 5-10 minutes to do online (with businesses or individuals being allocated an EORI number straight away or within 5 working days if HMRC needs to make checks) so the move to auto allocate provides limited time savings.
The low number of UK EORI numbers being auto allocated is also very worrying as there will still be huge numbers of businesses and individuals that still need to apply for a UK EORI number or face not being able to trade goods with the EU from day one in the event of a No-Deal Brexit.
Our advice is if you have not already done so apply for a UK EORI now!
No-Deal Brexit Planning
Whilst absolutely essential, it can’t be stressed enough that getting a UK EORI number is only a very basic and limited introductory step in terms of what a business which buys from or sells to the EU needs to do to prepare for a No-Deal Brexit.
How prepared are you now?
- Do you have a No-Deal Brexit plan?
- Do you know the cost impact on your business of additional customs duties when trading with the EU?
- Are your supplier contracts inclusive of customs duties and therefore you bear the additional costs?
- Do you know how to practically get goods in and out of the UK in a No-Deal Brexit e.g. will you require new licenses?
- Have you evaluated the impact on your upstream and downstream supply chain?
- Have you assessed the impact of potential extended border delays for goods on your ability to trade?
For importing alone once you have a UK EORI the Government have listed 4 additional basic steps:
- Decide who will make the customs declaration (find out if your freight forwarder can make declaration on your behalf, hire an agent to make the declarations, or make the declarations yourself)
- Applying for ‘simplified Import Procedures’ and which other customs procedure may be beneficial
- Find out what Customs duties, Excise duties may apply
- Find out whether additional procedures apply to the good you are importing. For example, you might need to change the labelling on the packaging for your goods, or apply for licences.
With a No-Deal Brexit now the most likely outcome, businesses need to be ready for this now!
How we can help?
Our team can assist businesses prepare for a No-deal Brexit including evaluating the impact, assessing exposures and developing strategies for minimising the financial and practical impact.
For more information please contact Hydeam Sulton on 0191 285 0321 or email email@example.com