Navigating trade post-Brexit

There are growing concerns over the application of post-Brexit trade barriers and how these may impact on the resilience of supply chains. One of the ways to mitigate any friction is to move to more automated documentation processes.

Advocates of the Brexit trade deal argue it has preserved tariff and quota-free access to the EU single market. But fears are growing among British retailers, exporters and importers that the picture is not so straightforward. Some business leaders say they are already experiencing administrative barriers and more complexity when trying to move goods across borders.

The Road Haulage Association has warned of serious disruption to freight movements while Marks & Spencer has predicted rising export costs and some specialist online retailers in the EU have said they will no longer deliver to the UK.

At the same time, the department store chain John Lewis, luxury food brand Fortnum & Masons and parcels firm DPD have all taken the step of suspending some overseas delivery services.

Any friction or blockages in trading arrangements is of course bad news for the resilience of supply chains. While barriers exist, a key way to help safeguard smooth trading is to avoid the human errors that can typically accompany manual data entry.

How then can document processes be automated to mitigate Brexit-related barriers?

The list of new Customs Declarations requirements is long and affected not only trade with the EU but also between Great Britain and Northern Ireland.

There are ‘EORI’ numbers (standing for Economic Operators Registration and Identification), export and import declarations, commodity codes, and security and safety declarations.

Dual-use and controlled goods, including software and technology that can be used for military purposes and items subject to excise duty, will require additional special licences and certificates.

SPS checks (sanitary and phytosanitary) will apply to animals, animal products, plants and plant products.

Traders will have to demonstrate compliance with any conditions required for zero-rated VAT transactions.

Unless they are using a freight forwarder, they will also have to register with the National Export System in order to access HMRC’s electronic filing protocol, known as CHIEF, or Customs Handling Import Export Freight, and the accompanying Customs Declaration Service, CDS.

Currently being phased in with existing CHIEF users and new registrations, web-based CDS submissions are now required for all shipments of goods between Great Britain and Northern Ireland.

Some of the hurdles around documentation have come about because the trade deal envisaged that zero tariffs and quotas would only apply to goods that originate in the EU or UK. As a result, manufacturers will need to know the origin of the components, and the processes they have been subject to, in the finished goods. The reason for this is to protect the EU from the UK being used as a hub to import non-EU/UK goods tariff-free into the EU.

For many British companies operating in an inter-connected trading environment, this all adds up to a new and confusing additional workflow, especially if their only business beforehand was with the EU or Northern Ireland and they had not otherwise faced the need for Customs Declarations.

At Transalis, we spent much of 2020 extending the range of document categories on our portal precisely to help customers deal with Brexit. That meant enhancing our electronic data interchange (EDI) platform with a new series of ‘message types’.

Based on customer feedback and research during the transition period, we introduced the new categories to cover the most likely post-transition compliance checks that UK exporters and importers would need for customs declarations and communicating transit instructions.

We extended our range of message protocols from ‘business as usual’ information such as invoices, shipping notes and orders forms to include all foreseeable import and export customs procedures.

By Brexit-proofing our platform in advance, we wanted to give those manufacturers, retailers and suppliers who use our solutions the best chance of ready compliance with customs rules and required document formats as they seek to continue seamless trading of goods between the UK and EU.

Whatever the document category we aim to take pain out of the process.

That includes minimising the risk of human error in data entry so customer can avoid having to spend time carrying out corrections and delaying despatch times.

We provide the means of correctly formating and pre-validating customs declarations, and submitting them directly to HMRC, as part of our overall eInvoicing suite of options.

Our solutions enable customers to streamline and reduce the post-Brexit burden being placed on their in-house teams or external agents or brokers.

Adopting eInvoicing is a common sense decision as it complements the requirement for customs declarations where exports or imports are a key element of the business mix.

eInvoicing helps make it simpler to stay up to date with the changing landscape of trading partners, tax compliance and eInvoicing mandates around the world.

All of these factors differ depending on where you wish to trade. For example, some countries now require invoices to be sent via the customer’s own tax authority.

Our eInvoicing suite provides the technology platform and solution to digitally transform sales invoicing and or accounts payable administrative operations, freeing up valuable staff time to focus on priority tasks, to support the profitable growth of the business.

Digital invoicing reduces the costs of processing, print, postage, storage and archiving, so enhancing cashflow.

It means there are fewer human data entry errors that would have previously led to time-consuming delays in approving invoices, reconciling accounts, releasing payments and resolving disputes.

Our experience in enabling frictionless international trade was recognised in 2020 with us being invited to play an instrumental role in adopting new European standards for public procurement and supply chain invoicing.

We became one of just twelve providers in the world to fulfil the EU’s requirement for a common electronic invoicing standard.

The aim is to provide trading partners, customs departments and tax authorities with a solution to meet each party’s information requirements for safe and secure trade.

In so doing, we are helping to guarantee supply chain interoperability, not just within the EU, but around the world as more trade deals open up following Britain’s transition out of the EU.

Our cloud-based supply chain solutions help facilitate the exchange of around 40 million virtual documents a year, underpinning more than £4 billion of commercial trade in a myriad of business sectors across more than 30 primary trading countries.

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The contents of this publication are the sole responsibility of Transalis and do not necessarily reflect the opinion of the European Union.