What is the future of borders post Brexit?
September 22, 2017
Jo Bello, PwC’s global head of Indirect Tax And Customs, reflects here on her conversation on our recent podcast about the uncertain future of the border and what businesses can be doing now.
The purpose of a border is ultimately a “checking point” for both goods and people, and playing a vital role in security as well. But as we all know, how we manage the UK border is about to change quite radically. I recently sat down with two of my colleagues to explore some of the implications of this.
Andy Key, from PwC’s Government team, spoke with eloquence about some of the security considerations involved and Julia Onslow-Cole, our global head of immigration, had some excellent insights around the movement of people across borders. For my part, focused on trade and the movement of goods, I shared my thoughts on some of the parallels and key considerations for each of us in considering the future of the border.
It is heartening to see from recent government papers that the key trade challenges are recognised and the government is considering options. Leaping out from the borders paper is an opportunity to simplify requirements when goods move across borders; thus reducing time and costs related to customs administration for imports and exports, as well as reducing the pressure and risk of delays at ports and airports. I have no doubt this will be welcomed by businesses.
Despite the UK being ranked 5th worldwide in terms of efficiency of customs and borders clearance, there is still some scepticism as to whether we have the infrastructure currently in place to support a post-Brexit world. It is unclear what scenario we will face, whether there will be a transition phase, and what might be possible to negotiate. Even if we manage to negotiate a good outcome, there is still a large issue of capacity, as IT processing power, databases, people, systems are likely to require upscaling at an unprecedented level.
And what can businesses expect?
Although there is still much uncertainty, businesses would be wise to prepare now. It’s important to do the analysis to understand what the impacts of the mostly likely scenarios could be.
But enough of the ‘what ifs’. What can we do now?
Even with a transition period, there is very little time to put things in place. I can see a few key areas where businesses really can make inroads now.
- Data: It’s pretty apparent that technology will play a pivotal role at the future UK-EU border and that means data such as commodity code, import value and origin of the arriving goods will have to be accurate and current. In order to submit data through any technology-focused solutions, and avoid any delays or obstacles on day one, it will be critical that data is ready to go. Sorting out data is time-consuming so it’s definitely one to start now.
- Trusted trader accreditation: It looks likely that this is going to be key at the border, like having some sort of fast track ticket. So getting ready and applying for this accreditation now is no bad thing to be thinking about.
- Relationships with transporters: I really think businesses should be seriously considering their relationships with transporters and freight forwarders as these are going to be much more important post-Brexit. Make sure as a business you've got the right controls over these relationships, the right data flows and the information exchange, as these agents are often going to be managing a significantly increased value of customs duty risk for a business compared to today.
- Supply chains: Look at whether you need to change your supply chains. In view of the new borders what can you do to ensure you have goods in the right place at the right time and what data will ease that flow of traffic?
- Influence the future: Finally, do the analysis and have the evidence to support your discussions with government. Be ready with the data so you know how you want to influence and shape thinking - the government is asking companies for input, it’s the opportunity for businesses to respond. Have an opinion on what would help your business so you can contribute to how the future should be shaped.
Yes, there is uncertainty and we don’t yet have all the answers. But we can definitely lay the foundations for post-Brexit trading now; and we must.
Download and listen to our full discussion on the future of the border at https://www.pwc.co.uk/tradematters