Brexit is hittng the importation and exportation industry in the UK. There will be changes to commercial contracts and how we import and export goods from countries around the world.
Here are a few things to watch out for when importing and exporting for your business in 2021.
Preparing for EU tariffs
If you already trade with countries outside of the European Union, you will probably be familiar with tariffs. However, you need to make yourself aware of the new UK Global tariff, which will replace the current Common External Tariff.
Potential increase in demand for cheap UK goods
There has already been an increase in demand for UK products as the pound gets weaker and UK goods more attractive to international buyers. In fact, the Food and Drink Federation reported a record number of exports in their industry last year.
With change comes an opportunity to alter your pricing strategy and make the most out of the situation. Decreasing your price slightly could make your products a little more attractive to buyers, or increasing it could let buyers know your business is holding strong.
Import tax could potentially increase
As a business, you’re going to want to keep an eye on the forex market to see what currency pairs are doing well and how much the trading forex can impact trade. For example, currency pairs could go down, which means it’s cheaper to import goods.
Audit your procurement and supply chain
Brexit will have a huge and immediate impact on procurement. HMRC has already reported a staggering 400 million new Customs Declarations will be required each year. Make sure to contact each part of your supply and procurement chain to prepare for the impact of Brexit.
Tax, customs, duties and VAT
You will need to pay VAT on most goods. However, you might be able to meet certain conditions to charge customers zero-rate VAT when exporting outside of the UK. These conditions are dependent on whether you are shipping goods directly or indirectly.
Licenses, certificates and labelling
You will need a license or certificate to import and export certain goods. You may need to pay an inspection fee for some goods before you can bring them to the UK. For example, animal, plant and food-based products.
There will also be new regulations on the labelling of products. You need to market and label items in line with these new rules, depending on the type of products you are importing or exporting.