This document provides guidance for manufacturers on preparing their supply chains for Brexit. It recommends immediate steps like registering with HMRC as an importer/exporter and applying for customs accounts. It also suggests longer term steps such as reviewing contracts, customs procedures, and supply chains to identify potential cost increases and mitigate these through duty reliefs and simplifications. Manufacturers should take action now to ensure compliance and avoid penalties when new regulations take effect.

1. This publication has been carefully prepared, but it has been written in general terms and should be seen as containing broad statements only.
This publication should not be used or relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained in this publication without obtaining
specific professional advice. Please contact BDO LLP to discuss these matters in the context of your particular circumstances. BDO LLP, its partners, employees and agents do not accept or assume any
responsibility or duty of care in respect of any use of or reliance on this publication, and will deny any liability for any loss arising from any action taken or not taken or decision made by anyone in
reliance on this publication or any part of it. Any use of this publication or reliance on it for any purpose or in any context is therefore at your own risk, without any right of recourse against BDO LLP
or any of its partners, employees or agents.
BDO LLP, a UK limited liability partnership registered in England and Wales under number OC305127, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of
the international BDO network of independent member firms. A list of members' names is open to inspection at our registered office, 55 Baker Street, London W1U 7EU. BDO LLP is authorised and
regulated by the Financial Conduct Authority to conduct investment business.
BDO is the brand name of the BDO network and for each of the BDO member firms.
BDO Northern Ireland, a partnership formed in and under the laws of Northern Ireland, is licensed to operate within the international BDO network of independent member firms.
Copyright © January 2019 BDO LLP. All rights reserved. Published in the UK.
www.bdo.co.uk
BREXIT – TRADE AND
SUPPLY CHAIN
IMPLICATIONS FOR THE
MANUFACTURING SECTOR
Manufacturers should take steps to protect their supply chains against the potentially
adverse effects of Brexit
EU versus global supply chains – immediate steps
Brexit will impact all UK manufacturers, but some
more than others. Those with solely UK-EU supply
chains, or little direct experience of dealing with
imports/exports, will face a number of new regulatory
requirements and challenges. However, all businesses
should be taking steps now, as a priority, to ensure
that they are prepared for Brexit. These include:
 Registering with HMRC to act as an importer
from/exporter to the EU and obtain an EORI
number
 Applying to HMRC to operate a Customs Duty
deferment account to defer the payment of Duty
until the following month to obtain cash flow
benefits
 Confirm the level of Customs knowledge within the
business and determine if training is needed to
avoid financial penalties as a result of non-
compliance with legislation
 Review in-house systems, procedures and customs
data to ensure that they can meet the new
regulatory requirements.
Developing a Brexit strategy – longer terms steps
Medium to longer term, manufacturing firms should
consider taking the following steps:
 Review contractual arrangements with suppliers
and customers to identify responsibilities between
parties for cross border movement of goods. For
example, are you responsible for taking your goods
all the way to your EU customer’s site?
 Do you know what this means in practice for
your business, from a freight and clearance costs
perspective? Does this lead to VAT registration
requirements in other countries?
 Develop Customs procedures and controls to
ensure that your business is operating
compliantly and can take advantage of Duty
reliefs and potentially become accredited as an
Authorised Economic Operator (‘AEO’) to obtain
further supply chain and financial benefits
 Review your supply chain to identify potential
areas of increased costs/indirect tax liability
 Consider potential benefits of Duty reliefs and
simplifications (such as Customs Warehousing) to
minimise any potential cost increases.
Consider applying for AEO S accreditation which
offers holders the following benefits:
 Fast track clearance at borders
 Ability to continue to use the EU VAT reverse
charge mechanism in the future in a ‘no Brexit’
scenario
 Faster application process for Duty reliefs and
simplifications
 Mutual recognition for exports to other global
trade partners (such as the USA) resulting in
lower broker costs
 Reductions/waivers in financial guarantee levels
to cover duty/import VAT incurred.
BDO’s Customs and International Trade team: UK - Regions
MARK ELLIS
Partner
t: +44 (0) 781 362 9444
e: mark.l.ellis@bdo.co.uk
JULIET WALLWORK
Customs Duty Director
t: +44 (0)121 532 6423
e: juliet.wallwork@bdo.co.uk
NICK NEWTON
Customs Duty Manager
t: +44 (0)121 352 6366
e: nick.newton@bdo.co.uk
CHANTAL TANNER
AEO specialist
t: +44 (0)121 352 6312
e: chantal.tanner@bdo.co.uk