HMRC

Transitional Simplified Procedures

HM Revenue and Customs (HMRC) has written to 145,000 VAT-registered businesses trading with the EU about simplified importing procedures and also updated them on the actions that they need to take to prepare.

Transitional Simplified Procedures (TSP) for customs will make importing easier for an initial period of one year, should we leave the EU without a deal, to allow businesses time to prepare for usual import processes.

Once businesses are registered for TSP, they will be able to transport goods from the EU into the UK without having to make a full customs declaration at the border, and will be able to postpone paying any import duties.

Treasury Minister, Mel Stride MP, the Financial Secretary to the Treasury, said:

Leaving the EU with a deal remains the government’s top priority. This has not changed. However, a responsible government must plan for every eventuality, including a no deal scenario. Businesses and citizens should ensure they are similarly prepared for leaving the EU.

HMRC is helping businesses get prepared and, amongst other significant communications, has written 3 times to affected businesses, each time stepping up the advice and encouraging them to take action.

This latest letter, and new GOV.UK guidance, announces Transitional Simplified Procedures for EU trade which will ease the transition, especially for businesses new to the rules associated with importing.

The new procedures reduce the amount of information importers need to give in an import declaration when the goods are crossing the border. They do this by allowing importers to defer:

  • giving a full declaration until after the goods have crossed the border
  • paying any duty until the month after import

If tariffs apply to the goods that they import, and they want to use transitional simplified procedures, they will need to defer paying any import duties by setting up a direct debit.

HMRC is also reminding businesses to get an Economic Operator Registration and Identification (EORI) number if they do not already have one. This number is crucial to be able to trade after we leave the EU (if we leave without a deal). It’s free and takes just 10 minutes to register online.

TSP will remain in place for more than a year to give businesses time to prepare to use the full customs processes that already apply to imports from non-EU countries.

The policy will be reviewed within 3 to 6 months after it’s introduced on 29 March 2019 to see how it’s working.

HMRC will consult with businesses and give them at least a 12-month notice period before withdrawing the easements in TSP and applying the usual customs processes to imports from the EU. This will give businesses enough time to prepare.

Businesses can register for TSP from 7 February 2019.

Businesses can register for TSP if they:

  • have an EORI number
  • are established in the UK
  • are importing goods from the EU into the UK

Read the full guidance on registering for simplified import procedures if the UK leaves the EU without a deal.

You can see the letter sent to 145,000 VAT registered businesses that trade with the EU, and previous letters on GOV.UK.

 

low tariffs after brexit

HMRC outlines phased approach for Entry Summary Declarations

The government has announced plans to phase in for EU imports the pre-arrival forms known as Entry Summary Declarations, if the UK leaves the EU without a deal.

Officials on Monday held a series of meetings with organisations who represent the haulage industry and handle a significant portion of the UK’s cross border trade, to confirm that from 29 March, the status quo will be temporarily maintained as they will not need to submit Entry Summary Declarations on imports for a period of six months.

Currently Entry Summary Declarations are not required when importing goods from the EU. They will continue to apply for trade from the rest of the world.

The measure is designed to give business more time to prepare for changes to EU-UK trade arrangements in the event that the UK leaves without a deal. This builds on the plans that Transitional Simplified Procedures (TSP) can be used for at least 15 months for customs declarations.

Financial Secretary to the Treasury Mel Stride MP said:

We’ve listened to businesses and are responding to their concerns.

We have been adamant that in the event of no deal, trade must continue at our borders, and we will continue to make our borders secure.

Maintaining continuity with the current system for the first six months and phasing Entry Summary Declarations in will ensure we deliver on that promise.

The new rules only apply to goods coming from the EU, and will maintain the status quo for carriers. Importers will still be required to submit import declarations for customs purposes – which are not the same as Entry Summary Declarations. HMRC announced ways of making these import declarations easier, through Transitional Simplified Procedures on 4 February 2019.

After the six-month transitional period, carriers will be legally responsible for ensuring Entry Summary Declarations are submitted pre-arrival to HMRC at the time specified by mode of transport.

The measure will not change the UK’s commitment to ensuring our borders remain secure in the event of a no deal and Border Force will continue to carry out intelligence-led checks. A Readiness Task Force in preparation for EU Exit is being recruited and Border Force is on track to increase staff headcount by 900 at the end of March 2019.

The UK’s approach to dangerous goods coming into the UK is not affected.

Pauline Bastidon, FTA’s Head of Global & European Policy, said:

“Today’s HMRC announcement on the temporary waiver of security and safety declarations for post-Brexit logistics movements is a great response to FTA’s campaigning over the past two years, and a positive step towards minimising disruptions on trade between the UK and EU and integrated supply chains after Brexit. However, it is imperative that the UK government maintains pressure on the EU to ensure that a similar waiver is adopted by the EU. To ensure that Britain can keep trading efficiently, it is vital that the European Commission and UK agree a longer term, more sustainable arrangement to remain in the same security zone, which would make safety and security declarations for UK-EU trade irrelevant.  Above all, it is vital that the UK’s supply chain remains as frictionless as possible – British business needs to be confident that goods and materials will continue to transit the nation’s borders as swiftly and efficiently as possible.

Sources: www.gov.uk / fta.co.uk

air freight

Air Freight Demand Ends Year Up 3.5%

The International Air Transport Association (IATA) released full-year 2018 data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs) grew by 3.5% compared to 2017.

This was significantly lower than the extraordinary 9.7% growth recorded in 2017. 

Freight capacity, measured in available freight tonne kilometers (AFTKs), rose by 5.4% in 2018, outpacing annual growth in demand. This exerted downward pressure on the load factor but yields proved resilient.

Air cargo’s performance in 2018 was sealed by a softening in demand in December. Year-on-year, December demand decreased by 0.5%. This was the worst performance since March 2016. Freight capacity, however, grew by 3.8%. This was the tenth month in a row that year-on-year capacity growth outstripped demand growth.

International e-commerce grew in 2018 which was a positive factor for the year. Yet, there was a softening of several key demand drivers:

  • The restocking cycle, during which businesses rapidly built up inventories to meet demand, ended in early 2018;
  • Global economic activity weakened;
  • The export order books of all major exporting nations, with the exception of the US, contracted in the second half of 2018;
  • Consumer confidence weakened compared to very high levels at the beginning of 2018.

“Air cargo demand lost momentum towards the end of 2018 in the face of weakening global trade, sagging consumer confidence and geopolitical headwinds. Still, demand grew by 3.5% compared to 2017. We are cautiously optimistic that demand will grow in the region of 3.7% in 2019. But with the persistence of trade tensions and protectionist actions by some governments there is significant downside risk. Keeping borders open to people and to trade is critical,” said Alexandre de Juniac, IATA’s Director General and CEO.

“To attract demand in new market segments, the air cargo industry must improve its value proposition. Enabling modern processes with digitalization will help build a stronger foothold in e-commerce and the transport of time- and temperature-sensitive goods such as pharmaceuticals and perishables,” said de Juniac.

DECEMBER 2018 (% YEAR-ON-YEAR) WORLD SHARE1 FTK ASTK FLF (%-PT)​2 FLF (LEVEL)​3
Total Market 100.0% -0.5% 3.8% -2.1​% 48.8%
Africa 1.7% -2.2% 4.9% ​-2.8% 38.1%
Asia Pacific 35.4% -4.5% 2.6% ​4.1% ​54.0%
Europe 23.3​% 1.9% 3.7% ​-1.0% 56.7%
Latin America 2.6% ​-0.1% 6.0% ​-1.8% ​29.1%
Middle East ​​13.3% 0.1% 4.5% ​-2.1% ​48.8%
North America 23.7% 2.9% 4.5% ​-0.6% 41.4%

Regional Performance

Airlines in all regions with the exception of Africa reported an annual increase in demand in 2018.

Asia-Pacific carriers posted the weakest growth of any region in December 2018 with a decrease in demand of 4.5% compared to the same period a year earlier. Capacity increased by 2.6%. The weaker performance in December contributed to growth in freight demand of only 1.7% in 2018 compared to 2017. Annual capacity increased 5.0%. The weaker performance of Asia-Pacific carriers in 2018 largely reflects a slowing in demand for exports from the region’s major exporters (China, Japan and Korea). Signs of a moderation in economic activity in China and an escalation of trade tensions continue to pose a downside risk to air cargo in Asia-Pacific.

North American airlines posted the fastest growth of any region for the seventh consecutive month in December 2018 with an increase in demand of 2.9% compared to the same period a year earlier. Capacity increased by 4.5%. This contributed to an annual growth in demand in 2018 of 6.8%, matching the rate of capacity increase. The strength of the US economy and consumer spending have helped support the demand for air cargo over the past year, benefiting US carriers.

European airlines posted a 1.9% year-on-year increase in freight demand in December 2018 and a capacity rise of 3.7%. The improved performance in December contributed to an annual growth in demand for air cargo of 3.2% in 2018. Capacity increased by 4.3% in the same year. Weaker manufacturing conditions for exporters, particularly in Germany, one of Europe’s key export markets, along with mixed economic indicators impacted demand in 2018.

Middle Eastern carriers’ freight volumes increased 0.1% year-on-year in December and capacity increased 4.5%. This contributed to an annual increase in demand of 3.9% in 2018 – the third fastest growth rate of all the regions. Annual capacity increased 6.2%. The region continues to be affected by geopolitical issues.

Latin American airlines experienced a decrease in year-on-year demand of 0.1% in December after three months of positive growth. Capacity increased by 6.0%. Despite a decrease in demand, it’s worth noting that the within South America market continues to perform strongly, with international demand up almost 20% year-on-year. Annual growth in freight demand among Latin America carriers in 2018 increased by 5.8% – the second fastest of all regions. Annual capacity increased 3.4% in 2018.

African carriers’ saw freight demand decrease by 2.2%, in December 2018, compared to the same month in 2017. This was significantly less than the 9.4% decrease the previous month. Capacity increased by 4.9% year-on-year. It’s worth noting that seasonally-adjusted international freight volumes, despite being 7.7% lower than their peak in mid-2017, are still 50% higher than their most recent trough in late-2015. Annual growth in freight demand among Africa carriers in 2018 decreased by 1.3% and capacity grew by 1%.

Source: IATA.org
heathrow

Christmas drone chaos shows an over reliance on southern airports and shaky infrastructure

The chaos at Gatwick last month emphasised the UK air freight sector’s over-reliance on the south-east region.

When Heathrow and Gatwick are working at full tilt – which is almost all the time – they can claim to be the most efficient airports in the world.

Between 19 and 21 December, thousands of flights were grounded and cancelled after drone sightings sparked safety concerns at Gatwick.

Although few cargo flights were affected then, the sighting at Heathrow caused major industry concern.

Last month, the government launched a 16-week consultation on its aviation strategy, outlined in the publication of Aviation 2050: The Future of UK Aviation.

Throughout the document, the government refers to supporting continued growth of the air freight sector by making best use of existing capacity at airports.

Head of cargo at Manchester Airport Group (MAG) Conan Busby, speaking to The Loadstar said “MAG has the third- and fourth-largest airports and the UK’s largest dedicated cargo aircraft operation, at East Midlands (EMA). All are perfectly positioned to continue to facilitate global trade for UK businesses and consumers.”

Mr Busby added there was “significant” transformation under way at EMA with its cargo operation, DHL having doubled its capacity while UPS is building its new UK air hub there.

“Also, beyond our boundary there is the East Midlands Gateway Rail Freight development under construction, which will further support UK logistics.”

Mr Busby said MAG was “not interested in a speculative approach to growth”, but some in the forwarding community believe this may be the best way forward.

Namely, if regional airports were serious about challenging Heathrow, they would “need to be less risk averse and use any options to attract more carriers providing cargo services”.

However, Mr Busby expected EMA to lead MAG’s cargo growth in the years to come, with both Manchester and Stansted in support. He added the group would be “pushing” to make best use of the runway capacity at both airports.

He added: “All three airports will play a key role in facilitating UK global trade especially as attention turns to understanding what trade deals might look like post-Brexit.”

Both airports are now reported to be investing in anti drone technology and have invested several million pounds in providing ourselves with the equipment and the technology that the armed forces deployed over Christmas,”

Source: The Loadstar / Independent.co.uk / Fin24.com