Top Tips for Managing Overseas Suppliers Post-Brexit
Is managing overseas suppliers during and after Brexit a concern for you and your business? If the answer is yes, check out our top tips to help you manage your working relationships with your suppliers effectively.
Whether Brexit happens now or in the coming months, the need for businesses to plan ahead is paramount. Especially for small businesses who purchase stock from international suppliers. Changing your supply chain may not be the most cost-effective option as it’s often a lengthy and costly process and should only be a last resort.
To help protect your supply chain from ongoing uncertainty and unknown consequences, we’ve created a checklist to help you manage your overseas suppliers effectively post-Brexit:
Maintain a good relationship
- By maintaining good and open communication, you’ll continue to develop a strong, trustworthy relationship.
- From a supplier’s perspective, if you have a customer that goes that extra mile to build a good relationship and support your business, you’ll value working with them.
- Get to know your suppliers because they’ll be more inclined to offer better prices, meet your future needs and work with you to overcome any obstacles that Brexit might present.
Custom duties and custom checks
- As a current member of the EU, UK businesses don’t have to pay tariffs on trade within the EU customs union.
- If the UK departs the EU with a no-deal, these taxes will apply to UK-EU trade.
- UK’s trade with the rest of the world are currently subject to EU tariff rates.
- After Brexit, these tariffs will be determined by the trade agreements the UK has negotiated with each country, or on World Trade Organisation (WTO) rules.
- Make sure your business is also prepared for delays at borders.
Review principal contracts
- Set aside some time to review your business’s principal contracts and identify how they might be impacted by Brexit or different trading conditions.
- These should clarify the terms for trade across EU borders, including how VAT is dealt with.
- If a no-deal Brexit occurs, ensure your contracts and international terms and conditions of service state your business is an international importer.
Simplified import procedures
- Your business can register for import procedures.
- Designed to make importing easier.
- This enables goods to be transported into the UK without having to make a full customs declaration in advance.
- This can remove the need to settle VAT and customs and excise duties on imports immediately at port, helping the cash-flow.
- To do this, you need a duty deferment account.
- VAT registered businesses do not need a deferment account for import VAT if they’re accounting for it on VAT Return.
- If a no-deal, the UK would the leave customs union and single market overnight.
- This means that current rules for imports from non-EU countries will also apply to imports from the EU.
- The government has promised to introduce postponed accounting for import VAT on goods brought into the UK.
- This will allow UK VAT registered businesses that import goods to the UK to account for import VAT on their VAT return, instead of paying import VAT when the goods arrive at the UK border.
- This will apply to imports from the EU and non-EU countries.
- UK businesses will lose access to the EU VAT refunds system post-Brexit.
- Any claims should be made before the UK leaves the EU.
- The value of the pound has decreased during the prolonged Brexit process.
- The cost of importing goods to the UK has increased – bad news for businesses that purchase stock from overseas.
- GBP value may reduce further in event of a no-deal.
- Cross-border businesses should put measures in place to help mitigate risk.
For access to official government resources, click here.
How can Xendpay help?
Xendpay provide fair, fast and reliable low cost global money transfers. Our online service helps businesses to minimise their international transfer costs, helping you to save money during the post-Brexit period. Businesses can transfer up to £4K a year without paying any transfer fees on overseas transactions, with low-set fees once that amount is reached.
So whether you’re sending money to a supplier, paying invoices and employees abroad or importing and exporting to and from the EU, Xendpay can help you reduce costs before and after Brexit.
Create an account with us to send money abroad today!