With Brexit almost here, businesses may think that they have run out of time to achieve Authorised Economic Operator (‘AEO’) accreditation. But, regardless of the future EU/UK trade relationship, AEO accreditation is likely to remain a ‘must have’ for many businesses.

1. AUTHORISED
ECONOMIC
OPERATOR (‘AEO’)
With Brexit almost here, businesses may think that they have run out of time to achieve Authorised
Economic Operator (‘AEO’) accreditation. But, regardless of the future EU/UK trade relationship,
AEO accreditation is likely to remain a ‘must have’ for many businesses.
Authorised Economic Operator (‘AEO’) – what
is it?
AEO is a voluntary, globally-recognised supply
chain ‘gold mark’ accreditation granted to UK
importers and exporters by HMRC. It offers
financial and supply chain benefits for
companies, the main ones being:
 Fast-tracking of goods through Customs
borders
 Reduction in level of financial guarantee
levels for a company’s Customs Duty and
import VAT liabilities
 Faster application process for Customs Duty
reliefs and simplifications.
‘No deal’ Brexit
 Under this scenario, UK-EU trade will be on a
third-country basis.
 We will see the introduction of tariffs on
goods moving between the EU and UK and
border controls and Customs declaration
requirements at UK and EU ports
 The potential for companies to operate
deferred import VAT accounting will be
introduced
 Finally, in addition to encouragement from
the UK government for companies to obtain
AEO, we are also seeing global businesses
requiring all companies in their supply chain
to become AEO-accredited.
Potential UK-EU future trade relationship
 We may still see border controls and Customs
declaration requirements at ports and the
introduction of tariffs on UK-EU movements
 Possible future arrangements could be based
on a UK/EU Free Trade Agreement (‘FTA’)
and new FTAs with third countries (eg with
Switzerland and Australia).
No Brexit
Under this scenario, AEO will still be critical for
companies who have a global supply chain and
who want to minimise/manage current
and future Customs Duty/import VAT costs
through the use of:
 Customs Duty reliefs, eg Inward Processing,
Customs Warehousing, etc
 Reductions in financial guarantee levels for
Customs Duty deferment accounts
Under proposed EU VAT legislation, many
companies wishing to continue to use the current
EU VAT ‘reverse-charge mechanism’ will need to
be a Certified Taxable Person (‘CTP’). AEO-
accredited companies automatically qualify as a
CTP.
AEO benefits
 Fast track clearance at ports, minimising the
risk of supply chain delays
 Faster application process for Customs Duty
reliefs and simplifications which could
mitigate against ‘double Duty hits’, ie
imports into an EU country followed by a
movement to the UK or vice versa
 Simplified Importing VAT Accounting – SIVA
 Reduction/waiver in in financial guarantee
levels for Customs Duty reliefs
 Mutual recognition benefits with third
countries, such as the USA, leading to cost
savings at export
 Automatically being able to continue to use
the VAT reverse charge mechanism for intra-
EU goods movements in future.
Authorised
Economic
Operator
(‘AEO’)
No Brexit
No deal Brexit
Potential
future trade
relationship

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As part of its wider Brexit offering, BDO provides AEO
application support, which is tailored to our clients’
specific needs. Clients can chose whether to have light
touch assistance or more detailed support. Our specific
areas of assistance can include the following:
Project kick off workshop
We prepare for, and lead, an AEO project workshop with
the key client stakeholders. In this workshop we:
 Confirm potential benefits to client of obtaining AEO
 Confirm which AEO certificate C or S is required (or
both)
 Outline the AEO application process
 Discuss the scope and level of detail of required
supporting documentation (processes, procedures and
controls).
 Share good practice based on our experience and
knowledge of HMRC policy
 Suggest project plan, roles and responsibilities
Gap analysis review
 Following on from the workshop, we undertake a gap
analysis review of existing documented
customs/supply chain processes, procedures and
controls and, if applicable, identify gaps/areas of
weakness.
Draft documented procedures, processes and controls
 Upon completion of the gap analysis review, draft
new processes, procedures and controls to address
the identified gaps/areas of weakness
 If necessary, improve existing processes, procedures
and controls to meet HMRC requirements
 Alternatively, where the client has chosen to draft
new (or amend existing) processes, procedures and
controls, we review these to ensure they are fit for
purpose.
Compile AEO application(s)
 Compile the AEO application(s) on behalf of the client
for submission to HMRC, including gathering all
required supporting documentation/information
 Alternatively, where the client has chosen to compile
the AEO application, we can review this to ensure
that it is fit for purpose, prior to submission to HMRC.
AEO – HOW BDO CAN HELP
Career background: Chantal previously worked as
an internal auditor and now works solely on AEO
projects bringing to bear her skills relating to
reviewing and drafting internal processes and
controls.
0121 352 6423
chantal.tanner@bdo.co.uk
CHANTAL TANNER
SENIOR TAX ASSOCIATE
Career background: Nick is a Manager in BDO’s
regional Customs Duty practice and will be
supporting Juliet in this project. He has
previously worked as a Customs and
International Trade Tax Specialist in HMRC’s
Large Business Service team and so can review
AEO applications from a HMRC perspective.
0121 352 6366
nick.newton@bdo.co.uk
NICK NEWTON
MANAGER
Career background: Juliet is a Director in BDO’s
regional Customs Duty practice and will be
leading this project. She has over 18 years’
experience in customs, excise and international
trade matters. She has previously worked in both
the UK and the Far East for Big 4 firms, dealing
with trade compliance and cost savings.
Juliet has significant experience in supporting
clients with drafting robust customs processes,
procedures and controls, for AEO and other
customs compliance purposes, and liaising with
HMRC on these matters. She has experience of
several industry sectors including the industrial
manufacturing and automotive sector
businesses.
0121 352 6423
juliet.wallwork@bdo.co.uk
JULIET WALLWORK
CUSTOMS DIRECTOR