Uncertainty reigns as Brexit looks set to be pushed back

Brexit | | MIC Customs Solutions |

This week may see Britain's exit from the European Union delayed until at least April.

Uncertainty continues to reign over Brexit this month, with the original deadline now looking likely to be pushed back after ministers in the British parliament failed to agree on what kind of deal they would support.

On Monday (March 25th 2019), prime minister Theresa May was dealt a new blow after MPs voted to take control of the parliamentary timetable and defeated the government's motion by 27 votes.

Health secretary Matt Hancock told BBC Radio 4's Today programme that no-deal and a second referendum had been rejected in the Commons and urged the house to get behind Mrs May's proposed Brexit deal, warning that the options are now "narrowing".

Today (March 26th) had been scheduled as the possible day for a third meaningful vote on the proposed withdrawal deal, but Mrs May said earlier in the week that this now does not have enough support to get through the Commons as things stand.

MPs will now be able to vote on Wednesday to consider a number of options, including whether a 'softer' Brexit is the answer and the potential for a customs union with the EU.

Friday (March 29th) had been designated as the day Britain was supposed to leave the EU, but the prime minister has said she will pass legislation this week to postpone it.

Last week, both Britain and the EU agreed that Article 50 needs to be extended and Mrs May will now need to amend the EU Withdrawal Act 2018 so that it is in line with the European Council agreement.

If this goes ahead, the earliest likely deadline for Brexit will be April 12th 2019, although sceptics have suggested it may occur as late as July.

The ongoing uncertainty surrounding Brexit has undoubtedly been taking its toll on businesses that deal with the EU, as well as on the wider economy.

KPMG chief economist Yael Selfin said in the group's quarterly Economic Outlook report this week that business investment has continued to slump and is expected to decline by 0.2 per cent in 2019 as a whole as businesses opt to delay making plans for spending.

Meanwhile, the Confederation of British Industry went so far as to declare Brexit a "national emergency" as it revealed that financial optimism has fallen at its fastest rate since 2008.

Speaking last month, the British Chambers of Commerce (BCC) said its members are "hugely concerned" that the UK is not prepared for all eventualities of the Brexit process and warned that a number of key questions have still not been resolved.

It pointed out that the movement of skilled staff, trade deals, customs tariffs and various regulations are yet to be properly negotiated and also said the lack of clarity has stifled investment and growth.

"There is a very real risk that a lack of clear, actionable information from government will leave firms, their people and their communities hung out to dry. Businesses need answers they can base decisions on, no matter the outcome," said BCC director-general Adam Marshall.

HMRC has been attempting to keep businesses up to date on Brexit developments as they continue to unfold and last month published two YouTube videos on importing from the EU and exporting from the UK respectively in the event of a no-deal Brexit.

Last week, it also announced further details of measures to support businesses with new customs requirements if the UK leaves the EU without a deal, extending arrangements already announced for traders to use Transitional Simplified Procedures for importing.

Under the new measures are an extension of the date when the first supplementary customs declarations must be submitted and import duties paid to October 4th 2019, as well as the provision of TSP at all UK ports.

The organisation is urging all importers to make the necessary preparations for a no-deal Brexit.

However, the ongoing uncertainty is sure to leave businesses wondering how they can adequately prepare for trade after a divorce from the EU when those in charge cannot yet provide any concrete details on what will really happen.

You can find out more information on Brexit for businesses via the Gov.uk website. Please feel free to also contact MIC if you have any questions about customs and trade compliance.