Brexit will change the terms of trade between both the UK and the EU.  

Details of the future framework between the UK and the EU are still emerging; we encourage businesses to follow public developments and seek more information if they have specific questions. The effect of these measures will likely vary by industry.  

There is also a possibility of a ‘no deal’ outcome – where the UK would leave the EU without any trade agreement in place and would revert to trading under a non-preferential World Trade Organisation basis. This outcome could have impacts for businesses from third countries such as New Zealand. If you think your business might be affected by this outcome, please get in touch. 

Borders - In this section you'll find more about challenges and delays you may experience, and the impact of a customs border on your imports and exports. 

Trade  - In this section, see how the Brexit trade negotiations may affect your company, and things to think about. 

Regulations - In this section, find out about potential changes in regulations under Brexit that could impact your business.

Tax (VAT) - Brexit will change what goods are charged VAT for import and export. Learn more in this section. 

Labelling - Things to think about if a 'no deal' Brexit changes rules around product labelling are in this section. 

Borders 

New Zealand companies that export goods to the UK, source products from the UK, or have pan-European supply chains, may face challenges at the border. There may be potential delays due to capacity and processing constraints, and increased administration costs and requirements from custom checks or tariffs.  

In the event of a no deal, the UK will be treated as a ‘third country’ from a customs perspective. As a ‘third country’, exports between the EU and the UK will require customs declarations, formalities and checks may be carried out, and any customs duties will need to be paid.  

It is important to understand the impact that a customs border may have on your business by analysing your company’s flows of imports and exports between the UK and the EU. 

If your company trades into the UK, or into the EU then across to the UK, you might want to consider: 

  • What is the volume and value of my trade between the UK and the EU? 
  • Is my trade time sensitive?  
  • What would be the cost of additional border delays in time, working capital and operational difficulties?  
  • What does a customs border mean for the shipment of my goods? 
  • What value would I declare to customs? 
  • What are the potential customs compliance reporting and costs? 
  • What proportion of my shipments is Roll-on, Roll-off, or plant or animal products or other items subject to regular customs inspection?
  • How do I submit customs declarations for EU trade in a ‘no deal’ scenario?
  • Should I engage the services of a customs broker, freight forwarder or logistics provider to help with any changes? 
  • Which ports do my goods enter into?  Do these ports primarily handle third country trade and are they set up to cope with additional business and checks?

The European Commission has also released guidance on customs and indirect taxation for trade between the EU and the UK if no deal is reached.

You should also consider how your EU or UK partners and customers may be impacted by customs delays. 

If border checks are introduced between the UK and the EU, there could be increased administrative cost and delays for third countries such as New Zealand. Companies should analyse the value and extent to which their business involves the supply or receipt of goods, parts or services between the UK and other EU countries.  

The UK Government has published guidance (technical notices) on trading with the EU if there is no Brexit deal reached.  

The UK Government’s Partnership Pack provides guidance on changes to customs, excise, VAT and regulations if there is no deal.

Trade

Along with the Withdrawal Agreement, the UK and the EU have agreed to a political declaration on their future relationship. Companies are encouraged to monitor the outcome of these negotiations and how this agreement might affect your company.  

In the event of a no deal, companies can scenario plan with WTO Most Favoured Nation (MFN) tariff rates on the WTO website. The UK government will publish a new UK MFN tariff schedule before they leave the EU. Information on the current tariff rates can be viewed on the UK Government’s website.  

Companies that carry out European trade may also utilise existing Free Trade Agreements that the EU has with other third countries. The UK is currently working to “roll over” those agreements and ensure the status quo continues.  

Companies should consider: 

  • If no deal is reached, what would the cost impact of the MFN tariff be to my company? 

It is recommended that New Zealand companies analyse what impact tariffs or non-tariff barriers may have on their business.  

The UK Government has released guidance on how to classify goods in the UK Trade tariff in the event of no deal.

Regulations

The EU sets its own guidelines for how imports from ‘third countries’ outside the single markets should be treated at the border. Depending on what form the future relationship between the UK and EU takes, it is possible that the UK would need to use these third country regulations to trade with the EU. 

This could create additional costs for companies (whether from New Zealand or otherwise) doing business in both the UK and in an EU member state, as they may need to comply with the different regulations.  

New Zealand exporters are encouraged to identify which European regulatory agencies they work with and which of their goods and services may be subject to any changed regulatory requirements. Companies should plan for any steps required to comply with separate regulation.  

The UK Government has released guidance on trading regulated goods if there is no Brexit deal.  

When reviewing the potential effect of changes in regulations, companies should consider: 

  • Is my company active in a highly regulated sector? 
  • Do I need to check my regulatory consents and licenses? 
  • Are my goods or services subject to EU regulations? 

Tax (VAT)

When the UK leaves the EU, sales of goods will become imports and exports for Value Added Tax (VAT) purposes. This means import VAT may be required for payment as goods cross the border each way.  

Companies are encouraged to review their supply chains to understand the possible effects of VAT changes on their systems, product costs and how this may affect product or service costs.  

The UK Government has published guidance on VAT for businesses if there is no Brexit deal.  

The European Commission has also released a technical notice on the rules on VAT for trade between the EU and the UK if no deal is reached.

Labelling

If no deal is reached, use of the term ‘EU’ in labelling may not be correct for food and ingredients from the UK.  

The UK Government has released guidance on producing and labelling food if there is no Brexit deal.

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