Businesses that have only ever traded inside the EU will need to register for an Economic Operator and Registration Identification (EORI) number, otherwise they will be unable to continue trading with the EU in the event of a no deal Brexit, HMRC has warned.
So far only 17% of the 240,000 or so businesses which may be affected have registered for an EORI number since October, HMRC says. It estimates that 145,000 VAT-registered companies trade with the EU but not the rest of the world, and that a further 95,000 businesses also trade with the EU but are not VAT-registered. All these businesses will need to take action.
Applying for a number "is free and takes less than 10 minutes" said financial secretary to the Treasury Mel Stride. In addition HMRC has confirmed it has capacity to sign up 11,000 businesses per day for EORI numbers. However, it usually takes up to three days to get an EORI number and could take longer if there are high volumes of applications, so HMRC advises businesses to apply now.
"Although it is tempting to delay in the hope that the UK does not leave the EU without a deal, businesses which do not take the steps advised by HMRC could face considerable disruption to their business as a result of not being able to import or export goods from and to the EU in the event of a no deal Brexit," said Catherine Robins, a tax expert at Pinsent Masons, the law firm behind Out-law.com.
Having an EORI number allows a business to trade goods into or out of the UK, submit declarations using software or have an agent to make declarations on its behalf. It also allows a business to apply to be authorised for certain customs simplifications and procedures.
HMRC advises that businesses will also need to work out how they are going to make the necessary customs declarations and may want to consider appointing a customs agent.
Businesses that import goods into the UK from the EU using roll on, roll off locations are also advised by HMRC to register for new Transitional Simplified Procedures (TSP). TSP will allow businesses to import without having to make a full customs declaration at the border, and postpone paying any import duties. However, for imports using other locations, and for exports, standard customs declarations will apply.
"Although HMRC is trying to simplify procedures for importing goods from the EU, a no-deal Brexit is still likely to be problematic for those exporting from the UK to the EU. We also do not know definitely what import tariffs the UK will put in place if there is no deal. It could decide to have zero tariffs on most items to facilitate trade, but that could have ramifications for UK producers who may then struggle to compete with cheap foreign imports," Catherine Robins said.