Brexit Committee Update March 2019

Brexit Committee News Update – March Update

Brexit Committee News Update

As UK Parliament move towards a crucial series of votes, HMRC are still advising businesses to prepare for ‘No Deal’. Below sets out some key actions XMA are taking before 29th March to prepare for such an eventuality.
It is worth pointing out that should a deal be passed by parliament in the coming days, the resulting transitional period lasting to at least Dec 2020 would mean that business would continue to operate as they do today with free movement of goods between the EU and the UK and would give XMA and its partners further time to prepare for any changes we would face as part of the final withdrawal agreement. We may face exactly the same issues we currently face or even a different set of issues for which we may have little time to prepare for. However, it will allow the Government to prepare more robust customs procedures and processes as well as negotiate favourable trade deals with both the EU and other countries.

Inventory

As mentioned in previous updates, XMA have negotiated increased one-off stock holding deals with its main hardware and supplies partners. This will result in a significantly increased stock holding. Whilst naturally not a long-term solution, it should mitigate any immediate shortfalls as delays at ports build up. In addition, we are advising customers to ensure they order channel stock as opposed to product built to order in EU factories to ensure the best service to customers. XMA have stepped up its services capability to configure locally to ensure end-users are serviced well during this period of uncertainty.

Customs & Border Control

Customs declarations will be mandatory for imports and exports for trade between the EU and the UK. Through our parent company (Westcoast) we are well versed in managing such declarations and have been busy collecting standard (UK will continue to be consistent post-Brexit) commodity codes (HS codes) for all live SKUs in our portfolio to understand whether tariffs will be applied. This work is on-going and to date we have confirmed codes on over 73% of active products in Westcoast’s catalogue. Any tariffs levied by the UK on imports or the EU on exports will be passed on to customers in the cost of goods along with admin fees levied by our customs clearance partners. At this point, we have identified very few risk areas, yet we encourage you also to take proactive steps to identify whether SKUs you wish to purchase from us could attract additional tariffs. Westcoast will inform customers when tariffs – currently at WTO non-preferential rates – are levied.

Safety and security declarations will be mandatory for imports and exports and Westcoast have a strong partner that will handle any such declarations.
It is mandatory for delivery documentation for goods being exported to show cost prices in order to clear customs effectively. Customers should note that whilst you may feel this is not ideal for direct deliveries to your end users, XMA must comply with all necessary customs clearance requirements.
We are only expecting physical customs checks on a small fraction of consignments particularly as not all ports have Border Inspection Posts (including Calais, Ostend and Normandy). All have plans to build new facilities, but it is not known whether these will be ready and sufficiently staffed in time for 29th March. Whilst we are not anticipating delays to XMA shipments, it will be checks on other products that bear significant tariffs that will create delays as well as the five-fold increase in HMRC custom declaration workload.

Ireland

There are likely to be delays in delivering goods to Ireland from the UK. Through our parent company (Westcoast) Ireland’s warehouse in Tallaght, Dublin, XMA will be have the ability to manage roll-out projects and cross-stock only. Customers are advised to discuss their project deals with their account managers to ensure appropriate space can be allocated. Single pick items will still be delivered from the UK using Westcoast’s logistics partner although some delays may occur at ferry ports.

FAQ’s

EORI – Westcoast do have a UK EORI number which will be sufficient for all declarations.
AEO – Westcoast have not applied for this status as management consider this will not be effective in speeding up customs procedures.
TSP – Westcoast have applied for this accreditation and the application has been acknowledged as received by HMRC.
Warranty – no vendor has yet amended their warranty terms so we can anticipate that warranty procedures will be the same as currently available post-Brexit.
VAT – exports on goods shipped from the UK will not bear VAT from the UK as currently.
Tariffs – where they are imposed, they will be applied on the full price of the goods (i.e. before discounts).

For any questions or queries contact our XMA Brexit committee at approvals@xma.co.uk

Read previous Committee Update for January 2019