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Whether your business is importing or exporting goods, it’s important that you are ready for a so-called ‘hard Brexit’ scenario, in which the United Kingdom would leave the European Union without a trade deal in place.
Currently, the UK has access to the EU’s internal market which allows for the full freedom of movement of goods, services, people and capital. This means that the UK is able to trade with its EU partners without restrictive quotas and without having to pay import duty. The UK also benefits from the simplified customs procedures, which reduces the administrative burden for UK companies trading with the EU to an absolute minimum.
‘Most Favoured Nation’ status
If the UK left the EU on a hard Brexit decision, the failure to agree a free trade agreement and/or to leave the EU’s customs union (at the time of writing the Government has restated its commitment to doing the latter) would mean that the UK’s trading relations with the EU would revert to the ‘Most Favoured Nation’ status under the rules of the World Trade Organization.
Should that happen, the full rate of tariffs would then apply to all imports from the EU, potentially opening the door to an increase in tariffs being imposed on UK exports to the EU and EU imports into the UK. This, together with an increased administrative burden, is likely to increase the financial cost of trade between the UK and EU.
Preparing for hard Brexit
Although the future trading relationship with the EU remains uncertain, it is important that businesses start to plan for the worst-case scenario: a hard Brexit. If your business needs help preparing for the potential impact of Brexit, we would really like to hear from you.
Our team of lawyers is able to advise on the implications for your business if you were trading under the ‘Most Favoured Nation’ status and analyse the costs to your business in terms of potential tariffs and duties that would apply to your goods post-Brexit.
If you would like to learn more about the services our team can provide to help you ensure your business is protected against any final Brexit decision, you can get in touch with Paul Newbon, a senior solicitor in our Shipping and Transport department, by emailing firstname.lastname@example.org. Alternatively, you can speak to a member of the team today by calling 01482 325242.
The tariff information can be found at: https://www.trade-tariff.service.gov.uk/trade-tariff/sections