A recent study by Newsnight suggests that very few UK firms are prepared for a No Deal Brexit situation even though the threat seems to be looming as members of parliament have not yet reached a consensus about the proposal presented by Prime Minister May. This became obvious when Transitional Simplified Process (TSP), which was launched by HMRC during February this year to ease imports in case Britain left the customs union abruptly, received less than 10 % of estimated applications. The HRMC is planning to ready as many traders as possible through this scheme.
The TSP will allow British firms to import products from European mainland after Brexit without filling new declaration at the border before crossing over. Even UK business firms would be given the facility of postponing payment of import duties for another year. But despite these facilities given to corporate sector only 17800 firms have applied to the govt. for TSP. This figure is below 10 % of the actual 240000 firms who should submit the status details by October end. This date is just before expiry date of UK’s Article 50 extension that ends on 31st Oct.
A cabinet note has already warned ministers that it will take minimum four to five months to make traders ready for new border checks as they have to first apply for Economic Operator and Registration Identification (EORI) number from HMRC before registering from TSP. Till date only 69000 firms in UK have signed up for EORI status which is less than one third of 240000 firms that trade within UK. Financial secretary has therefore urged business to make necessary arrangements and not leave things till last minute and HMRC has been sending reminders once in every 2-3 month to 145000 VAT registered firms that trade within EU to apply for an EORI number.