In addition to the VAT proposals, the UK has set out “practical and proportionate” advice in the form of 25 papers in case the UK leaves the EU without a deal. The papers are the first batch of the promised 80 guides with the remainder promised by the end of September.

During a speech on planning for a no deal Brexit, UK Brexit Secretary Dominic Raab said that while reaching a deal with the EU was the “overriding priority” and “by far the most likely outcome”, the UK “must be ready to consider the alternative possibility”.

The guidance, which spans to 25 documents, includes instructions for businesses in the areas of importing and exporting, farming, money and tax, medicine regulation, EU funding and work place rights.

Specifically on trade, the guidance says that in the event of a no deal Brexit, trade with the EU will be on World Trade Organisation terms and this would mean immediate changes to the customs procedures for UK businesses that trade with the EU. The UK will publish its tariffs that will apply to goods imported into the UK from the EU before it leaves the EU and doesn’t envisage any immediate change to commodity codes.

The UK government is urging businesses to start analysing their supply chains to understand their interactions with other EU countries and get an understanding of the customs rules and tariffs that will apply after Brexit. The rules that will apply are the rules that currently apply when the UK trades with countries outside the EU and with which the UK does not have a free trade agreement. There will also be additional safety and security declarations required.

Get registered for EORI

Traders are encouraged to register for a UK Economic Operator Registration and Identification (EORI) number (which is needed to lodge electronic customs declarations and to apply for Authorised Economic Operator (AEO) status) and should also consider whether it might be appropriate to engage a customs broker, freight forwarder or logistics provider. Businesses should also establish whether any additional customs software would be required in the event of a no deal. All of this, the UK government acknowledges, will come at a cost to the trader.

Back to Brexit Basics – Applying for AEO Status

In this month’s Back to Brexit Basics we examine how traders might go about applying for Authorised Economic Operator (AEO) status.

AEO status is a certified authorisation issued by customs authorities in the EU for traders involved in customs declarations. The status means that a trader can be recognised worldwide as a safe, secure and compliant trader in international trade.

While AEO is not mandatory, because it indicates that a trader’s customs controls and procedures are efficient and compliant, it does give faster access to certain simplified customs procedures and in some cases, shipments can be fast-tracked through customs procedures.

Who can apply?

Any trader established in the EU who is part of an international supply chain (that is trading with countries outside the EU) can apply to their country’s customs authority for AEO status (so the Revenue Commissioners for traders established in Ireland and the HMRC for traders in the UK).

For example, manufacturers, exporters, warehouse operators, clearance agents, importers or freight forwarders can all apply for AEO status. They just need an EORI number to do so. This should be obtained before applying for AEO status. It’s important to note that you need an EORI number anyway to trade goods with countries outside the EU.

Traders require AEO status if they wish to qualify for, among other things, moving goods in temporary storage between different member states without attracting multiple customs charges.

How to apply for AEO status in Ireland

1. Apply to Revenue for an EORI number (this can be done online).
2. The first step before applying for AEO status is to complete a self-assessment questionnaire. This will help you to evaluate your procedures and ensure they meet the criteria for AEO.
3. Revenue has prepared explanatory notes that will help you to complete this questionnaire.
4. If the AEO criteria are met, you should complete the application for AEO certificate.
5. The completed application and self-assessment questionnaire should then be sent to the Simplifications and Compliance Unit. Phone numbers, postal and email addresses are provided.
6. Revenue staff will then carry out an evaluation which will always involve a visit to the premises detailed in the application.

How to apply for AEO status in the UK

1. Apply to HMRC for an EORI number.
2. Complete the form C117 application form which requires basic information about the business.
3. Complete the form C118 which is a detailed questionnaire about your business activities.
4. Send both forms together to HMRC at AEOapplications@hmrc.gsi.gov.uk so the application can be accepted and processed.
5. Traders need to have evidence of processes and procedures to support your application and meet the AEO criteria. These should be retained and produced at the audit stage of the process or at the request of the auditor.
6. If you’re a group of companies, you have to submit separate applications for each legal entity. If you have common standards and customs procedures, only one questionnaire C118 is needed along with an application form for each legal entity. However, if you submit a separate C118 for each legal entity, you can speed up the application process.

Common Transit Area

The UK has applied to re-join the Common Transit Convention when it leaves the EU which will allow cross-border movements of goods.

Northern Ireland

On Northern Ireland, the guidance states that the UK “must respect our unique relationship with Ireland” and that in the event of a no deal the UK would “stand ready to engage constructively to meet our commitments and act in the best interests of the people of Northern Ireland.” No solution was offered on how to avoid a hard border on the island.

More information

Chartered Accountants Ireland and The Institute of Chartered Accountants of England and Wales have released a joint publication entitled Taking the Lead: Chartered Accountants & Brexit which gives practical details of AEO status and its benefits. Download your free copy on our website.