What construction businesses need to know for no-deal planning

Businesses in the construction industry and related sectors will understandably have concerns about the impact of a ‘no deal’ Brexit on their business and projects. This guidance from BEIS helps members navigate the key issues, from EU labour to materials tariffs and importing, should a ‘no deal’ Brexit take place.

An update from the BEIS Infrastructure and Materials team. This covers information on the following: 

1. The UK’s import tariffs in a no-deal scenario;
2. Customs arrangements on the Irish border in a no-deal scenario;
3. New Prior Informed Consent (PIC) guidance for moving hazardous chemicals;
4. Providing Services to EU and EEA countries in a no-deal scenario;
5. New HMRC guidance on accounting for import VAT and how to get an EORI number;
6. Guidance for UK businesses from French customs authorities;
7. Trade remedies;
8. Preparing for Brexit Webinars on importing/exporting goods, business legal requirements and intellectual property; and
9. Links to updated guidance on the Construction Products Regulation, Intellectual Property and Government procurement.

1. UK import tariffs in a no-deal scenario - The Government has today published details of the UK’s temporary tariff regime for no deal, designed to minimise costs to business and consumers while protecting vulnerable industries. The regime would be temporary, and the Government would closely monitor the effects of the tariffs on the UK economy. It would apply for up to 12 months, while a full consultation and review on a permanent approach to tariffs is undertaken. Businesses would not pay customs duties on the majority of goods when importing in to the UK if we leave the EU without an agreement. MFN tariffs will remain in place for all products that have a trade remedy in place and are due to be transitioned over in the case of a no deal Exit (58 HS lines). Further detail can be found here and please do email or contact me on the number below if you have any questions on this.

1. Customs arrangements on the Irish border - In a no-deal scenario, the UK Government would temporarily hold off introducing any checks or controls on almost all goods crossing from Ireland to Northern Ireland, so there will be no need for customs declarations, nor the payment of duty.  The exceptions are:

• Businesses would still need to pay VAT and Excise on Irish goods that come into Northern Ireland and the UK.
• Small businesses trading across the border and not currently VAT registered would be able to report VAT online periodically without any new processes at the border.  This would not involve any infrastructure or checks at the border including in Northern Ireland.
• New requirements would have to be put in place include hazardous chemicals covered by the PIC regulation (see new guidance immediately below), ozone-depleting gases and f-gases - for each of these, checks will not take place at the border but electronic notifications will be required before bringing goods from Ireland to the UK, including Northern Ireland.

Further information about the changes at the Irish Border is available here.

1. New Prior Informed Consent (PIC) Guidance   - New PIC (Prior Informed Consent) guidance has been issued relating to exports to the EU. If you are intending to export a PIC listed chemical between 30^th March and 3^rd May, you are advised to contact [email protected] to request a UK PIC export notification form.  These are similar to the forms that are used under EU PIC. Please include the following in the subject line of your email: ‘UK PIC – 35-day transitional period – notification’.

ECHA has published some similar guidance for EU27 companies intending to export PIC chemicals to the UK after exit: https://echa.europa.eu/-/how-to-notify-pic-exports-to-the-uk-after-uk-s-withdrawal-from-the-eu.

1. Providing services to EU and EEA countries after EU Exit  - If the UK leaves the EU on 29 March 2019 with no deal, UK businesses will no longer operate under European Economic Area (EEA) regulations for the cross-border trade of services.  This means that UK businesses and professionals providing services in the EEA (including all EU Member States, plus Iceland, Liechtenstein and Norway) will be regarded as originating from a ‘third country’, which may result in additional legal, regulatory and administrative barriers. We would encourage you to read the Government’s country-specific guidance for each market you provide services in.  The guides contain information and links to help businesses navigate regulations, including cross-border trade in services, establishing or structuring a business, business travel and visa arrangements, recognition of professional qualifications and data protection.  All guidance would apply from 29 March in a no-deal scenario.  The guides are available here. 

1. Guidance on accounting for import VAT in a no-deal  - If you are a VAT-registered business, HMRC has published guidance on how to account for import VAT.  The guidance explains how you can pay when you submit your returns rather than as goods cross the border.  Businesses or individuals who are not VAT-registered in the UK will not be able to account for import VAT in this way and will need to pay import VAT up front as goods cross the border, with the exception of imports from Ireland across the land border as outlined above.

How to obtain an EORI number - If the UK leaves the EU without a deal, UK businesses looking to import or export goods with the EU will need to apply here for a UK Economic Operator Registration and Identification (EORI) number.  This is a twelve-digit number that starts with the prefix GB.  If you already have an EU EORI number that starts with a different country prefix, you do not need to register for a UK EORI number yet as HMRC will continue to recognise your EU EORI number for a temporary period.  You can contact HMRC’s EORI team on 0300 322 7067 (Monday to Friday, 8am to 6pm).

1. Guidance from French customs authorities for UK businesses in the event of a no deal Brexit - The French Customs and Excise authority has published customs guidance to help businesses that move goods between the UK and France to prepare for new customs procedures in the event of a no-deal Brexit. In practical terms, this means border controls will resume and the free movement of capital, goods, services and people (workers, students and travellers) will cease.  In order to benefit from the automated border crossing from 30 March, you must prepare your customs declarations before checking-in your goods at the ports of Calais, Dunkirk or at the Channel Tunnel.  This can be done through UK or French computer systems.  The barcode provided by the French authorities following receipt of a customs declaration will allow your goods to cross the border as smoothly as possible.

1. Trade remedies - The UK now has its own fully-functioning trade remedies system with the establishment on 6 March of the Trade Remedies Investigation Directorate (TRID).  TRID will conduct the necessary preparatory work to ensure that the UK is ready from 29 March to commence investigations in to unfair trade practices or injury caused by unforeseen surges of imports.  This temporary directorate will administer the UK’s trade remedies functions until the Trade Remedies Authority (TRA) is legally established with the passing of the Trade Bill.  Further information can be found here and here.  The Government also laid the relevant secondary legislation to enable these developments – the Trade Remedies (Dumping and Subsidisation) (EU Exit) Regulations 2019 and the Trade Remedies (Increase in Imports Causing Serious Injury to UK Producers) (EU Exit) Regulations 2019.

1. Preparing for Brexit Webinars - The British Library is hosting a series of webinars on various topics to help businesses prepare in the event of leaving the EU on Friday 29 March without a deal.  If you wish to register to join, please click the link and follow the instructions.

• Importing and Exporting – 1:00pm-2:00pm on 18 March 2019, covering customs procedures, VAT and excise

https://www.bl.uk/events/webinar-preparing-for-brexit-importing-and-exporting-mar19

• Business Legal Requirements – 12:00pm – 1:00pm on 19 March 2019, covering operating legally in the EU, cross-border mergers and accounting/auditing requirements

https://www.bl.uk/events/webinar-preparing-for-brexit-business-legal-requirements-mar19

• Intellectual Property – 11:00pm-12:00pm on 20 March 2019, covering registered and unregistered design rights, trademarks, copyrights, patents and exhaustion

https://www.bl.uk/events/webinar-preparing-for-brexit-intellectual-property-mar19

1. Latest GOV.UK Updates and Changes

• HMRC Partnership Pack Most sector-specific pages for partners have been replaced with links to user guidance that partners can share with customers, clients and members; and the Communications resources section now includes links to a range of quick video guides, and a set of information leaflets for use by businesses and stakeholders.
• Construction Products Regulation if there is no Brexit deal from Ministry of Housing, Communities & Local Government has been updated to include FAQs.
• Statutory Instruments relating to EU Exit Links to four new SIs have been included
• IP and Brexit: the facts Patent guidance and video under the Statutory legislation section has been added.
• Procurement Policy Note 02/19: Preparing for the UK leaving the EU was published on 7 March and provides further information on how the UK’s public procurement regulations will be affected in the event of either an agreed deal with the EU or a no deal exit from the EU.

The CBI will continue to work closely with the Department for Business, Energy and Industrial Strategy to ensure the construction sector is supported as the Brexit negotiations evolve.