Business after Brexit: auditing your supply chain
On the 1st January 2021, the Brexit transition period ends and the changes coming for retailers, whether they trade with the EU or not, are big, they’re complicated, and they’ll take longer than you think to address. If you haven’t already started preparing, the clock’s running down fast and despite all of this coinciding with the Christmas peak sales rush, you need to act now to protect your business.
At ResilienceHelp.com, we recommend you start by looking at your end-to-end supply chain. Consider the import / export flow of your goods and do an audit for each product asking yourself either who handles it, or who adds value to it each step of the way.
Most large organisations that you deal with along the way - marketplaces, banks or shipping services for instance - will already have prepared and will be able to support you. You should draw heavily from the guidance they offer, so if you haven’t already, visit their websites, contact your account managers and watch for any information bulletins they send you.
If you have any small or medium sized organisations in your supply chain - perhaps a niche local labelling or packaging supplier - you will need to do the due diligence yourself. Contact them to find out if they have audited their own supply chains to ensure they’re robust enough too. This will help you anticipate any problems they might have that will have knock on effects.
You may find at this stage that you need to plan for a variety of contingencies. If your business relies on products that are manufactured abroad, you might want to look around to see if you can find alternative local suppliers. If that’s not an option, you will need to have an idea of how long your current stock levels will last and expect restocking to take longer than usual in the new year.
All the information that is currently available suggests that there will be delays due to the new customs procedures simply because everything will now have to pass through customs checks.
Business after Brexit in the fashion sector
Many fashion businesses import products from the EU and elsewhere. It is essential that you understand the new customs processes for import. You will also need to ensure you understand whether something is a special good such as leather, or other products of animal origin, that may require import licences. You should also be mindful for the need of an EU and UK trade mark or design going forward (your current EU mark stays the same and you will need to get a UK version of your existing trade marks and designs).
Finances and legal considerations
All businesses will need to consider the impact of the additional costs such as VAT and tariffs and the impact they will have on your finances which may already be under strain due to COVID-19.
Amongst other requirements, you will require both a UK EORI number (issued by your tax office) in addition to a clear understanding of your HS codes (8-digit commodity codes) and compliance with EU product rules. Your importer in the EU needs an EU EORI number.
Review your contracts, particularly for INCOTERMS (International Terms and Conditions of Service) that are advised to use for EU-UK trade. Also review any regulations that might affect your company, such as company rules, consumer rights, information security requirements and rules on intellectual property rights such as trademarks. Also, check sector or product-specific regulations, such as for cosmetic products.
There’s one other important thing you should consider. If you employ EU nationals or plan to do so before the end of 2020, you may want to ask if they intend to remain in the UK and if so, if they have applied for settled status in order to retain their rights to stay here. You may wish to support your employees with the process and can find a UK government toolkit to assist you here. If you are planning to recruit EU nationals in 2021, make sure you can afford the time and costs to sponsor them under the new points-based immigration system. Be mindful of the difference between those EU nationals already in the UK before December 2020 versus those EU nationals planning to arrive in the UK in 2021.
With so little time left, every day counts and even with the Christmas rush happening, your preparation really can’t wait any longer. Find out how ResilienceHelp.com can support you here.
ResilienceHelp.com are a business resilience consultancy. We offer businesses one-2-one advisory services as well as bespoke open registration classes on a variety of Brexit related topics including online selling (Amazon), and EU trade and regulations. We also work with a variety of public sector clients providing EU Exit training to SMEs on behalf of Local Authorities and Growth Hubs and local Economic Development offices. Last year we provided Brexit preparation support to 1,500 businesses in London through the London Growth Hub.
Discover more Brexit guidance here:
- Business after Brexit: 5 things you need to know about new import rules
- Business after Brexit: applying for an EORI number
- Business after Brexit: understanding tax and tariffs