As the UK readies itself for exiting the EU—“Brexit”—a transition period incorporating customs issues may be needed so that authorities and businesses can make adequate preparations. Customs authorities may need to prepare for an unprecedented burden on resources, but the costs ultimately could be expected to fall on business.
Without a transition period (assuming the UK exit), a customs "default process" would apply for businesses moving goods across UK-EU border.
Outside the EU customs union, the default process for anyone wanting to move goods across UK-EU borders would apply to everything from correctly classifying consignments and submitting about 25 data elements, to determining that all regulatory documents have been completed and paying the correct amount of customs duties and taxes. Moving from the current “frictionless trade” process with the EU to this default process could result in a significant new burden for business.
In order to help reduce friction and avoid delays in a manual border clearance system, it would be important for the process to be simplified using automation. The UK official in charge of the office responsible for the UK exiting the EU has advocated “technical ways” of reducing possible friction at borders, citing examples such as recognition of truck license plate numbers, tagging of containers, and “trusted trader schemes.” The UK official has stated the goal is to have a transition period of one to two years.
Read a 2017 report prepared by the KPMG member firm in the UK
Read also an August 2017 report [PDF 1.7 MB]
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.