Considering that the UK left the European Union on 31 January 2020 and formally informed the EU that it did not want to invoke its right to request for an extension of the transition period, the transition period which started on 1 February of this year will come to an end on 31 December 2020.
During the current Brexit transition period, goods can still be shipped tariff free and without import and export formalities from mainland EU to the UK and vice versa. After the transition period, scheduled for 1 January 2021, trade between the EU and the UK will qualify as import and export transactions.
As such, the transition period was meant for the UK and the EU to secure their future trading relationship. Despite eight EU/UK negotiation rounds, no agreement has been reached to date. Both sides are clear that a deal must be agreed by October, but with neither side appearing to be ready to concede, the mood music is increasingly pessimistic.
To further urge companies to take action, HMRC has sent a letter informing them on what is changing and which action companies should take to be prepared to trade with the EU as from 1 January 2021, including clarification on the import processes for non-controlled goods that will be introduced in three stages. To read the full communication, please click here.
Also the Belgian Customs and Excise administration recently published further guidelines on their website (for information purposes only) to prepare the administration, ports and companies for a no-deal Brexit (including comments on the transit procedure and on inward / outward processing relief). To read the full guidance on their website, please click here.
Should you have questions or concerns about this topic or Brexit in general, please feel free to contact our multidisciplinary Brexit Core team at PwC. We would be happy to work with you to determine and implement the Brexit strategy that’s customised for your unique business in order to mitigate risk and minimise the interruption of business.