Understanding customs duty has been saved
Understanding customs duty
Until recently, it is most likely that business leaders would have paid limited attention to how much their organisation pays in customs duty each year. However, Brexit has meant that this is now at the forefront of business activity as organisations look to determine the potential impact that Brexit may have.
To mitigate the potential effects and find efficiencies that could be implemented today, businesses need to take a more active approach to customs duty management.
We have engaged with organisations from a broad range of sectors to analyse and understand their customs landscape today and how that is likely to change post-Brexit. This includes a consideration of the potential duty costs in addition to the potential administrative costs that come with UK/EU movements within the single market becoming imports and exports. In working with clients over the last year including retailers, consumer product manufacturers, automotive and pharmaceutical companies we have found some businesses with high current duty bills will see minimal impact and others with very low current duty costs still face potential multi-million pounds in additional costs. Two businesses with virtually identical products can also have vastly different potential cost impacts based on where they currently source their products.
The Deloitte Customs Brexit Analytics (CBA) tool uses existing trade data for both intra-EU and rest of the world transactions and generates a bespoke dashboard highlighting the potential impact for both imports and exports to and from the EU and non EU countries post Brexit – it also takes into account goods that have been traded using preference and those that have benefited from EU preferential trade agreements. Assessing the current and potential future landscape provides a platform for businesses to develop a strategic plan for managing the future indirect tax impact on the business covering, for example, supply chains, people, technology and reporting strategy. It also enables the business to identify where better use could be made of Customs regimes. We are now engaging with clients in these projects where not only customs duty but wider supply chain issues and other taxes are also being considered.
Customs duty is a cost that can and should be managed today as well as post Brexit. Considering supply chains and the landscape today supports your organisation to plan for today and what may happen tomorrow.