Brexit - Driving business transformation | Deloitte UK has been saved
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Brexit has propelled businesses into a new world of customs and trade compliance, putting the spotlight at the executive level, on how these complex areas impact supply chain, commercial relationships and the bottom line.
With trade into and out of the EU accounting for over 50% of the UK’s overall international trade, the size and scale of customs and trade compliance, its cost, value, and strategic importance for businesses has grown considerably. With the North West boasting a large manufacturing, industrial, retail and consumer products base, for many, particularly those with closely integrated UK and EU supply chains, business leaders are still working through how they respond to and navigate significant impacts, such as:
The need to focus on customs compliance, and getting it right, is becoming even more important owing to UK customs, and tax recovery in general, being high on HMRC’s agenda. Overnight, from 1 January 2021, customs tariffs went from being a 25% to 100% revenue source for the UK. At a time when the UK is looking for ways to recover from COVID-19 and Brexit spend, which according to the Institute for Government is expected to be £148bn1 and £8.1bn2 respectively, customs is likely to become a revenue recovery focus area and, by proxy, a risk area for businesses that do not want to be hit with unexpected customs bills.
Against that backdrop, many business functions have seen an increase in the areas assumed to fall under their remit and are being asked to input more frequently on business strategies, particularly on production, procurement and distribution models. This comes at a time where input demands are increasing but departmental budgets especially in tax are flat or falling. In Deloitte’s recent Tax Transformation Trends Survey, tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) have to be prioritised if tax is to become more proactive at delivering strategic insights to the business – something that is quickly becoming critical for customs and global trade.
Whilst the above is problematic, there is a clear opportunity for department leaders to use Brexit to address some of these issues. We have seen an upward trend in Brexit being used to obtain executive level buy-in and budget for projects to roadmap new operational structures, in order to add much needed strategic value to customs operations, run more efficient supply chains and increase compliance in a smart way.
When working on customs and global trade operating model transformations, we embed three key factors into the approach:
By working through these stages a business should be well positioned to make impactful and optimal changes to customs and global trade operations that respond to current Brexit disruption and proactively deliver more strategic insights for growth and efficiencies, mitigate future impacts and increase compliance in a cost efficient way.
If you are interested to read more on Brexit, its impact and how it can define future plans, please go to our page Brexit: Define your future | Deloitte UK for more information. For more information on our NW practice, including insights into our global market activity please click here
Eleanor is one our Gobal Trade leaders, with a prominent Northern focus. She joined 7 years ago from HMRC’s Solicitor’s Office and hasn’t looked back since. In recent years, Eleanor has lived and breathed Brexit. She’s worked hand in hand with businesses through their planning stages and the immediate aftermath. In the wake of many businesses dealing with radically increased global trade landscapes, she is now spending a lot of her time helping businesses pioneer positive global trade management transformation, with a particular focus on operating model maturity, optimisation and risk mitigation. Eleanor is at her happiest working collaboratively, is incredibly hands on and likes to draw from her broader indirect tax, legal, commercial and HMRC experience to offer balanced and well rounded support. She otherwise spends her time with her husband and energetic toddler, travelling (when she can) and living the Manchester music scene.