Customs Connect recently met with a potential client, a UK-based automotive company with a turnover of over £1.4 billion. They were keen to obtain some preliminary information on the effect of the UK leaving the European Union and its impact on company operations and their bottom line.
We ran our Brexit Modelling Tool on the company’s import data, and made forecasts based on various assumptions, including the UK leaving both the Single Market and the EU Customs Union post-Brexit. In summary, here were our initial findings:
- On EU parts imports, Brexit could cost the company an additional £28m per annum
- If you include duty payable on cars exported to the EU the duty increases by a further £23m
However, we also highlighted ways in which the company could minimise this impact, and even make additional cost savings.
An immediate opportunity was the implementation of Inward Processing to create savings in the short term. These savings would multiply following Brexit, therefore mitigating the negative impact. An initial classification review also highlighted a potential opportunity of £70k – £100k in duty savings.
In the long term as Brexit develops, further opportunities were highlighted around Outward Processing Relief, achieving and maintaining Authorised Economic Operator Status, and Customs Warehousing options.
The automotive company now has a clearer idea of the potential impact of Brexit on their business, based on the scenarios we highlighted
The continuing relationship with Customs Connect will provide clarity as Brexit negotiations develop and the conditions of the Brexit deal are made public.
Find out how we can help with our Brexit Advisory Services.