Brexit …..aaargh….Jan 1 …brrr…Customs… aaargh !

Over the last four years , I have tried as much as possible not to post about Brexit. However, from a purely practical point of view I have relented, in the hope I can inform in an apolitical way.

Unbiased (I keep biting my lip even when I only write those words), I am going to try and put some of facts down which will hopefully inform traders who have been buying from suppliers within the EU, on what they need to do. I would like write about exporting to the EU , but that is even less clear and to be honest my interest is in stuff coming from the EU.

So lets start with some facts. There are 11,000 containers of UK Government PPE at Felixstowe docks. Ships coming into both Felixstowe and Harwich have been subject to delays for some time now. The Customs IT systems are not fully tested yet. Every UK point of entry ie ports & airports invariably run different types of software for customs declarations . It is muted there will be all singing, all dancing single system by 2025 . No matter whether there is a deal or no deal on Jan1 2021 things will change big time. If you did not really understand the words ‘free movement of goods’ you will then .

What’s to do then ? If you import absolutely anything from the EU or intend to then the following 2 steps are essential.

  1. Apply for an EORE ( pronounced by HMRC as EOREE. Well at least someone has a sense of humour or irony) .
  2. Apply for deferred Custom Declarations and Vat payment
Eoree -Amused me !

You have to do No 1 before you No 2 (that may chime with some- schoolboy humour). You can only apply for 2 if you have not been a naughty person with HMRC. If you are having difficulty loading the HMRC site to download this form, it maybe the browser, as it only works on certain browsers. But HMRC Help Line doesn’t seem to know that. It also doesn’t explain the forms you may or may not need. The one that you probably do is called C1202 as it is a direct debit mandate for HMRC. Without this you are unlikely to get approved . Here’s a good ‘un, you have to complete the form online but then you have to print and post it. This implies that they could have anywhere between 100-200,000 postal applications between now and Christmas, which they will then have to handle manually. Having just had two weeks locally of no postal service, the signs are pretty ominous.

If your application for deferred status is confirmed it allows you to do 2 things …

  1. From the Jan 1 to June 30th you can defer making your customs declarations. But you must keep a record of all your transactions during that period. I will itemise the data you need later.
  2. Whilst in the EU there was an agreement that all VAT transactions between states did not carry VAT on the invoice. This stops on Jan 1. From then on, there will be no VAT on an invoice from an EU supplier but you will have to record the VAT that would have been due on that same invoice in your VAT returns.

The Following list are the core items you will need to record for customs declarations :

Customs Procedure Code

Supplier

Date

Consignment no/ Invoice no

Product code

Description

Tariff code

Tariff Rate

Cost Price

Quantity

Total Due

Without doubt I will have missed certain elements but these are the basics. If a deal is reached, I get the impression that declarations will still have to be made as to what they contain is another matter . One thing is for certain is that you will have to record the Vatable amount as that will certainly be due on July 1. I cannot speak for the Northern Ireland Protocol, as that is another layer of political customs speak. Nor do I have any knowledge of specialised products such as plants , food, oil, gas, aero engines, airplane parts, chemicals, drugs………All of which I assume comes into the definition of oven ready deals.

None of this helps with the importing from nations not in the EU but have free trade agreements with the EU. There are fifty plus such nations . We have made a couple of deals notably Japan, Switzerland , Norway and Iceland but there are a number of significant trading nations where we will no longer have a free trade deal such as Mexico, Vietnam and Turkey. And I am not so sure there is a lot of help available. There are grants for training on customs procedures and there are also grants if you want to set yourself up as a Customs Agent ! I think that in itself tells a story. There are also many HMRC webinars . Having recently sat through one , I would not raise your hopes of celestial enlightenment . Maybe others are better .

I lied. At the start I said I was going to be apolitical . I have been . Now I am not. The UK Government has been floundering about in very deep waters dealing with Covid. So has every other National Government. No matter what shade of political belief , no Government would have got it right. It is one of life’s undeterminables. And it will continue to be so. The Government has a duty to preserve and protect the lives of its citizens. Where there are definitive actions that could be taken they should take them.

Which brings me back to Brexit. I am a remain voter accepting of the UK decision to leave. What I cannot agree with is reckless political ideology that puts our nation in harms way or at very least increases the risk to both health and wealth. One of the underlying principles of paying off the huge debts that have been incurred (quite rightly) is the returning to some form of economic growth. Even (at least most ) political Brexiteers agreed that the first months of Brexit would be very hard on the economy, and that was pre-covid. Consequently , I get very wound up by superficial ads with actors, apparently in large warehouses, saying we are ready are you? When they, the Government are very evidently not. Moreover, how would you expect hundreds and thousands of businesses that have currently got to deal with more economic, financial and emotional hurdles to deal with than at any other time since the 2nd world war .

So please tell me UK Government why you have chosen not to doing anything about the one thing you did have control of ie Brexit Transition you chose to stick with political ideology . That is to say you kept your snouts well and truly stuck in a political bucket . Take back control , whatever that means but do so when you when can at least see the steering wheel. As a consequence we can look to at very least six months of even more supressed if not depressed growth rates. Ta very much .

The Numbers that Never Add Up……

There are those who may read this and saying I am talking about Statistics not numbers. There are, of course those who will say I am talking utter tosh. They maybe right but if you start any conversation about statistics, the line would go dead (or it would have done when we telephoned each other with telephones) . Anyway what do you work with in statistics , err numbers…If they think I talk tosh i have no counter argument.

During a time when everyone is trying to seek the truth about anything (not that I think finding the truth is anymore difficult than any other time), there is a tendency to believe that if you are given a number in answer to any question then it must be true. 20 divided by 5 = 4. No argument, it is a truth of ‘sorts’ .

One late winter day in 1971, 50 pennies= approx. 20% of £1, the following day, 50 pennies = 50% of £1. What changed ? The numbers in £1(or decimalisation for those who don’t know or can’t remember). So the number 1 did not change but the bits of it did.

A situation oft related is if you take the average wage of those travelling on a particular bus is say £15000 , and then Bill Gates gets on the bus, the average earnings run into billions . So what sort of average is that when only 1 out of say 40 is anywhere close to the average? Now, before I get thumped by someone saying a statistician would always knock of the extremes in any data set, but most of us aren’t statisticians and even then they often have their own interpretations. But we will come back to that .

Blind conviction in decision making that is based on metrics and figures that don’t actually hold up are running rampant

Simon Dutton .Founder of specialist Data Science, Machine Learning & Analytics Development Company

I am not going to even think of using the Damn lies and statistics as it is cliched and not helpful. The reality is the number on its own is a truth . What you do with that number , in what context , how it is interpreted , how it is used and when it is used are only a few of the many variables that can make that number untrue so to speak. The purveyor of the number is the one who needs be questioned .

Playing Bingo, you can be pretty sure the number is what its says on the ball. If the caller says then umber 66 , then that is exactly what it is a truth, you block out 66 on your card. 66 is deemed a ‘truth’.

For me a very simple everyday commercial example would be ……

That is all well and good my good Sir, but you are offering me a discount of 20%. I need a discount of 40% !

My reply

My very fine Customer, that can of course be arranged . But (whispering to myself) I will have to increase the starting price by 20%.

Here’s another….

Well tell me young man (yes some do address me like that), your 100 bestsellers ….

I am sorry no can do…100 bestsellers does not tell you anything . It only tells you what products we sold the most of , at any given time period, that does make them best sellers. There are loads of reason why we have sold a lot but none of may equal a ‘bestseller’ in the true ,meaning of the word

These maybe very simplistic (but true) , however in some different format or any other this type of discussion. it actually happens, a lot. The general answer is discount off what..Most consumers must be fed up to the back teeth of ‘Sales’ with up to 70% off. As far as best sellers are concerned the real numbers are the products that will sell well for the client to whom you are talking .

Off what ?

Everyday life revolves around numbers, our weight, our height,calories, how much we earn and spend , GDP, how much, how many, when, where, who, what , they involve a number somewhere. So you would think we should get them right but in so much of our lives decisions are made where the number is wrong or rather wrong in any one context.

Government Policy is underwritten by numbers (and of course political ideology) . This is directly from the Office for National Statistics(its that word again)

The average family size for women born in 1942 – for example – was 2.29 children per mother. In contrast, their daughters’ generation – represented by women born in 1969 – had on average 1.91 children per mother. Meanwhile, women born in 1984 had fewer children on average (1.02) by their 30th birthday than women born in 1969 – who had 1.12 children by the same age.

ONS 2019

How many women do you know had 1.12 Children ? Or even 1.02 ? In this context none of those numbers are actually real. If you have people in a room and their respective weights are 50kg,51kg,52.5kg,57.8kg,56.25gk, the average weight would be 53.51kg . Yet no one in that room would be the average weight. Within this simple example lies so many issues with health advice, BMI, Calorie intake, healthy weight and absolutely everything that is based upon an average. A male weighing 120kg and 6ft 2″ tall would be considered overweight and unhealthy but not if he plays in the back row for an International Rugby team.

Currently we are being swamped, daily, by numbers relating to Covid 19. More often than not they are used by politicians and journalists alike to make comparisons. Comparing ‘what’ with ‘what’. One set of data from one nation will be totally incomparable to another, as the way the data is sourced will be completely different from each and every nation. This is true of many national stats. Take GDP for example . Whose is the greater China or Luxembourg? Easy you may say….Luxembourg …well it is is if you evaluate it per head !

Simon Dutton .Founder of specialist Data Science, Machine Learning & Analytics Development Company

Single GDP comparisons are in themselves unprecise as mostly they are expressed in Dollars. Dollars like all currencies fluctuate in value. Therefore that value will change depending on what currency that is relevant to you. Example, if you took the UK GDP of the UK in dollars four weeks ago it would have shown one figure but if you translated it today that would have shown GDP growth because of the weakness of the dollar. Yes , I know we don’t measure it in dollars . But international analysts do. What I am trying to say that it is very easy to manipulate the numbers . Of course the numbers don’t manipulate themselves. Much like algorithms, that extraordinary word that implies data lead intelligence. As we are rapidly finding out these wonder ‘rithms‘ don’t create themselves, the data, that they are made up of, comes from us ‘umans . We decide on the numbers that will go into any algorithm, which is why they are often wrong as we discover on a pretty frequent basis.

10,000 steps a day has become the norm for a healthy body. Where did this number come from. It was entirely arbitrary . A Japanese Company company , on the back of the successful Tokyo Olympics, created the world’s first step counter Manpo-Kei , translated it means Ten Thousand Steps. This fabricated number, from a very successful marketing campaign, became the world’s (including the WHO) daily walking benchmark . It was never based on any science.

Advertisement for Manpo-Kei

The following two graphs (apologies for quality, tried but failed dismally to replicate them rather more professionally.) Show the same numbers in two very different ways. They measure the change in world climate from 1820-2015. The first one shows the temperature change (Fahrenheit) , as does the second (albeit in centigrade) . However, the second only show the change whereas the first is set against an entire temperature range making the changes appear much smaller. Or depending on your point of view the second illustrating it on a much smaller range !

Both illustrations come from the Book ‘The Number Bias’ by Sanne Blauw

Inflation is measured by all Developed Nation Governments , for a whole bunch of reasons, mainly to do with them , and they are all measured differently . In the UK were are really lucky as we have 2, CPI and RPI. What these both are and why both exist is an other story but essentially they are made from what are lightly called ‘baskets’ Probably there are created by ‘basket cases’ (English slang for stupid people) . These baskets are made up from lists of goods and services that we are all supposed to use regularly .

Some of the items are power drills, beers in night club, avocados, raspberries, 65″ TV , women’s gym wear, acoustic guitar, gym equipment and……. To some these may seem very representative of their life but to others will have no relevance what so ever. The inflation number is supposed to be a guide as to what is happening to prices. Yet if you are on the breadline and your rent has just gone up, the bus fare to work(if you have a job) has had a hike, then being told inflation number is only 1% , as fuel has plummeted, as has the price of 65″ TV , is going to mean diddly squat.

So next time a salesperson comes into your business telling you wow i’ve got some great numbers to show you, just be sure exactly who they are great for …

Perfect numbers like perfect men are very rare

René Descartes-Philosopher & Mathematician) (today he would have included women, I think (oh yes, I think, therefore I am….another of his -Descartes that is))