UK trade benefits greatly from membership of the EU, evidenced by huge investment into the UK infrastructure, in particular in the manufacturing industry. The UK exported around £220 billion GBP worth of products back to Europe in 2016.
Whilst the impact of the Brexit vote is still unclear, what is certain is that Brexit will happen. Access to the single market and to skilled labour are very important for UK Industry, therefore future trade deals are a concern, with uncertainty affecting current and short term potential investment.
Hard Brexit and import tarrifs
If the negotiations lead to a hard Brexit, the UK will be outside of the free trade agreement within the European Union, meaning that UK manufacturers must adapt their international supply chains to be more resilient, responsive and efficient.
Tariffs are a big concern, for example within the UK automotive Industry, 60% of all car components are imported from overseas. Over 75% of the cars made in the UK are exported back into the EU and the rest of the world, 70% of car sales in the UK, are imported.
In the future, components imported from the EU may be subject to duty, VAT and customs declarations, in the same way as components coming from outside of the EU are currently affected. If the components are processed and exported to the EU or the Rest of the World, the finished product will attract customs declarations and tariffs. What is posed could potentially mean a tariff on imported components, and tariffs on the exported finished product, a potential duplicate taxation.
Customs bonded warehousing
Grant Jones, Business Development Director, TVS Supply Chain Solutions comments, “TVS are currently providing services to a number of UK OE manufacturers and Tier 1 providers from around the world. We assist with bringing in goods from outside of the customs union by utilising our bonded warehouse. This defers VAT and duty payments on imported goods at port and unnecessary upfront costs, having a positive impact on cash flow and negating inventory liabilities. Goods manufacturers would then bring imported components into their Inbound Processing Relief ‘umbrella’ from a Customs Bonded warehouse. Manufacturers would process the components into finished goods and lodge the finished product into our bonded warehouse paying the tariffs only when the goods are exported. In this way the imported components are not subjected to duty and tariff cash disbursements twice.’’
TVS SCS is a global provider of world class, end-to-end supply chain services across a variety of sectors. We are specialists in providing revenue growth, inventory reduction and operating costs reduction. TVS SCS operates on a global scale with facilities in the UK & Europe, North America, the Indian Sub-Continent and the Asia Pacific region. TVS’ parent company TVS Logistics Services Limited has its global HQ in India and operates across Europe, Asia and the USA. TVS LSL is one of the world’s fastest growing supply chain specialists.
Get ready for Brexit
To find out how TVS can help your business get ready for Brexit, or for more information on Customs Bonding Service, contact us firstname.lastname@example.org or email@example.com.