Following Brexit, the UK’s departure from the European Union resulted in several years of upheaval for UK businesses needing to keep up with new customs regulations for UK-EU trade. With 2022 being a year of economic bad news, on top of developing trade deals and updated systems, there’s a lot for UK traders to be thinking about going into the new year.
This blog looks into some of the recent news regarding current attitudes to international trade and what the future looks like for UK businesses, including a slightly concerning update on the Customs Declaration Service (CDS) platform that was fully launched in October, plus information on how John K. Philips bonded warehousing could help UK importers in 2023.
International trade poll reveals uncertainty for UK traders
According to a poll by the Institute of Export & International Trade (IOE&IT), only 49% of businesses are confident in the new customs documentation rules. While 5% of these claimed to be very confident, 10% of other respondents reported feeling ‘not at all confident’.
With so much disruption to international trade, especially between the UK and EU, it’s unsurprising that many traders are uncertain about their understanding of the latest UK customs procedures.
When it comes to understanding UK trade deals, both current and future, 52% said they were not confident that they understood how to navigate these trade deals, with 48% not sure if their business was benefitting from the UK’s trade agreement with the EU.
Despite the confusion and doubt for many, another IOE&IT poll found that 52% of respondents were actually optimistic about their prospects for international trade in 2023.
However, 38% did express uncertainty over international markets. Around a third believed that post-Brexit policy changes for trading with the EU would be the biggest challenge for businesses in 2023, with complicated rules and administrative barriers being the most significant concerns.
Almost half of respondents to the first poll said that they wanted to learn more about special customs authorisations that can reduce duties and taxes when importing or exporting. One way of mitigating the impact of duties and taxes is to use a bonded warehouse, which suspends the requirement for payment while the goods are in storage.
Businesses using bonded warehouses only pay customs fees if and when their goods enter the market, allowing traders to get their financial planning in order – and bonded warehousing providers like ourselves even offer administrative assistance with the customs paperwork.
‘Alarming’ delays for Customs Declaration Service sign-ups
As we reported in our September blog on the Customs Declaration Service (CDS) deadline, international traders were due to switch completely to the digital platform for import declarations by 1st October. The new streamlined system is replacing the outdated Customs Handling of Import and Export Freight (CHIEF).
However, several weeks later, the business lobby group British Chambers of Commerce (BCC) says that delays in importers switching to the new service are at ‘alarming’ levels. While the CDS is now being used for 91% of import declarations, 1,000+ businesses still hadn’t signed up by the week starting from 7th November.
Many of these left-behind businesses could well be brokers for other companies, meaning the impact would be even larger if these businesses find themselves ‘cut adrift’ without access to CHIEF before having set up a CDS account.
The BCC is therefore urging HMRC to extend the deadline and allow more leniency for businesses still struggling to switch over, but there have been no updates from HMRC on what might happen next for businesses who missed the changeover date – meaning more uncertainty in this regard.
If you’re a trader expecting to continue importing goods into the UK, but aren’t using the CDS, it’s crucial to sign up now to minimise disruption to your business over the Christmas period. You can find more information about what you need to do on the government website.
Similarly, traders who are adjusting to the CDS switchover could also benefit from using bonded warehouses to store their imported goods. This gives you more time to adjust to using the new system before circulating your imports and paying duties.
Contact John K. Philips for bonded warehousing
If you have any enquiries about how a bonded warehouse could help your business as a UK trader and how we cooperate with the CDS, don’t hesitate to give John K. Philips a call on 01744 751 000, or fill out our contact form for a timely response.