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On time, or not, that is the question
In many ways, logistics is like a theatre show, particularly when we think about operational and transport planning. Paddy MacBrant explains why.
With many businesses still reeling from the impact of COVID 19 on their supply chains and their business, there’s another major wave coming on the horizon – Brexit.
Production planning and lead times mean many businesses can’t afford to take chances – importers and exporters need to take action now to prepare for the worst say Simon Dixon, Founder & CEO of supply chain and logistics advisors, Hatmill, and Craig Poole, Managing Director of logistics provider, Cardinal.
This will mean ‘traders in the EU and GB will have to submit customs declarations and be liable to goods checks’. Do not underestimate what’s involved in terms of compliance and paperwork, or the knock-on impact this will have on your supply chain and stock management.
Pre-COVID the Government stated that any ‘policy easements’ for a potential no deal Brexit, such as extra time to pay VAT, will not be reintroduced as they believed businesses had adequate time to prepare. Who knows whether this will stick too, but our advice is assume that it will.
So, the message is clear, if you’re an importer or exporter, then you must take immediate action to continue trading after 31 December 2020, and prepare for the impact on your supply chain. Here we explain what’s going to happen, the action you need to take, and the impact this may have on your business.
Instead of trying to navigate the unknown and deal with the additional volume of administration, businesses can outsource their customs procedures to a 3rd party Customs Bureau like Cardinal, that has CFSP accreditation from HMRC and can handle and facilitate import/export declarations to/from Europe.
We know that there are going to be knock-on impacts, so you need to plan now and minimise disruption to your supply chain.
The controls, checks, processes and procedures that take effect after the 31 December 2020 are likely to add at least a day, and potentially more than a week, onto lead times, so it’s time to think about how you’ll build in extra flexibility so your business can cope with the disruption and additional lead-time as a new norm
Another key consideration is your pricing policy. New import controls might increase your administration and warehousing costs, but it’s essential to get advice and plan now for how duty imposed on imports might affect the end-price of your product. And this is not as simple as it sounds.
You’ll need a commodity code for your product to make your customs declaration when you bring goods in or send goods out of the UK or EU. This includes goods dispatched to you from abroad.
To do this you’ll need to classify your goods correctly to know what rate of duty and import VAT you should pay. So, let’s say you’re importing bicycles. There’s not one code for a bicycle. Instead, there’s a code for each part, e.g. rubber inner tubes, another one for rubber tyres. So, one product is a collection of codes that you’ll need to find on the gov.uk website – one product could be 6 or 7 different codes, or more. Based on this, HMRC will tell you what the duty is.
Cardinal provides a wide range of services including:
Please email craig.poole@cardinal.co.uk or visit cardinal.co.uk
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