New UK premier, Boris Johnson, said last week that the UK must leave the EU by 31 October, “do or die, come what may”.
This means UK, EU27 and EEA companies now have less than 100 days to prepare for a UK No Deal Brexit. That’s less than 70 working days – and even less if you plan to take a holiday over the summer.
If the UK leaves without a deal, it will also leave the Single Market and the Customs Union. So everything will change overnight – 400 million Customs Declarations will likely be needed each year, plus compliance with Rules of Origin and thousands of other major/minor regulatory changes.
Of course, it is still just possible that the UK might change its mind. Or that the new UK government might persuade the EU27 to give up the so-called “Irish backstop”. This aims to avoid the need for border controls between Northern Ireland and the Republic of Ireland.
But neither outcome looks very likely today.
THE AUTO INDUSTRY IS ALREADY WARNING OF THE RISKS AHEAD
Businesses therefore now need to prepare for a No Deal Brexit on 31 October.
What does this mean? It means that companies have to assume there will be no transition period. Instead, the UK will operate under WTO rules. The UK car industry has highlighted the risks this creates in a letter to the new premier:
“We are highly integrated with Europe, and a no-deal Brexit would result in huge tariff costs and disruption that would threaten production, as well as further undermining international investors’ confidence in the UK. We need a deal with the EU that secures frictionless and tariff free trade.
“A no-deal Brexit presents an existential threat to our industry. Above all, we must ensure the sector continues to enjoy — without interruption — preferential trade with critical markets around the world, including the EU”.
The chart above highlights the potential impact on the Nissan car factory in NE England.
THE NEW UK GOVERNMENT IS NOW PREPARING A MAJOR COMMUNICATIONS CAMPAIGN
Cabinet Office minister, Michael Gove, has been put in charge of No Deal preparations. And the aim is to quickly launch a major communications campaign to help the public and businesses get ready for leaving the EU without an agreement. As Boris Johnson said last week:
“What we will do, is we will encourage people in a very positive way. From the get-go, we start saying, ‘Look, what do you need, what help do you need, what reassurances do you need?'”
This will add to the information already available by clicking on the Gov.uk website:
- Businesses can complete the 7-question triage tool, which will provide relevant documents
- They can download the ‘Prepare your business for leaving the EU‘ leaflet on preparing EU Exit
- UK-based businesses can download info on employing EU/EEA and Swiss citizens after Brexit
- They can also download the employer toolkit on the EU Settlement Scheme
- Manufacturing companies should make sure they have an UK EORI number
- Plus there is detail on ‘Data protection and Brexit‘ and you can sign up for email alerts
READY FOR BREXIT PROVIDES PLANNING AND AUDIT TOOLS, PLUS DETAILED LINKS
A No Deal Brexit will impact companies and supply chains. This is why I co-founded Ready for Brexit a year ago, with a number of highly-experienced industry colleagues. It is subscription-based, and features detailed Brexit checklists, a No Deal Brexit planning tool and a BrexSure audit tool to check your suppliers and customers are also fully prepared.
It focuses on the key areas for business, as our Brexit Directory above shows:
- Customs & Tariffs: Export/Import Registration, Labelling, Testing, VAT
- Finance: Payment Terms, Tax & VAT, Transfer Pricing
- Legal: Contracts, Free Trade Agreements, Intellectual Property
- Services & Employment: Banking, Insurance, Investment, Property
- Supply Chain: Documentation, Regulation, Transport
We can all hope that Johnson’s renegotiation with the EU27 is successful. But hope is not a strategy.
With the new government committed to the 31 October deadline, businesses really are taking an enormous risk if they don’t focus all their energies on planning for ‘No Deal’.