Helping your business stay compliant and up-to-date in a post-Brexit world
It’s possible that you didn’t realise the significance of 1 January 2021 with everything else that was happening in the world. On 1 January 2021 the UK officially left the EU. After being discussed and deliberated since 23 June 2016, Brexit finally happened.
Despite it happening at the start of the year, we are only now starting to receive clear details and information about what this means for businesses.
We’re sure that there will be further tweaks to the new rules and procedures as time goes on and trade agreements are agreed.
We’ve taken it upon ourselves to comb through all the information and put it in one place, to help you understand what you need to do now.
Understanding what rules apply to you and what steps you need to take can be daunting. Our Brexit hub is designed with you in mind. Telling you what you need to know and do to stay compliant and up-to-date post-Brexit.
Take a look at what specifics you need to be aware of with our tailored information:
For Employers (and non-UK Company Directors)
If you employ non-UK citizens then Brexit means you need to be asking two main questions. With the changes already in place it’s key you find out whether these apply to you sooner rather than later!
Are your employees still eligible to work in the UK?
This needs to be done urgently if you employ any EU citizens with non-UK citizenship to prevent disruption with their work, as it came into force on the 1 January 2021.
Most EU citizens will be eligible to apply for settled and pre-settled status allowing them to remain in the UK, to continue to work and to keep their rights after the 1 January 2021.
Do your employees need work permits?
Frontier Work permits allow individuals to work in the UK while living elsewhere. There are certain conditions that need to be met for a person to be eligible.
Being from the EU, Switzerland, Norway, Iceland or Liechtenstein
Living outside of the UK
Having worked in the UK by 31 December 2020
Having worked in the UK at least once every 12 months since they started working here
If you think this might apply to your employees read more about how to apply.
For Businesses Selling Services
If you sell services across the EU then the big development for you is that from 1 January 2021 UK businesses no longer assume operation under the European Economic Area (EEA) regulations for trading services across borders. Now there are different rules for specific countries.
Anyone who provides digital services to EU customers may need to register for VAT MOSS in a EU-member state. Remember, the UK’s VAT Mini One Stop Shop (MOSS) is no longer available for you to use to declare sales.
Businesses Selling Services to the EU
The most important place to start for any business that sells services to the EU is determining which country’s VAT rules now apply - is it the place of supply or the place of consumption?
Post-Brexit the General Rule applies to most services but there are Special Rules related to certain B2C supplies.
What is the General Rule?
This applies to B2B services provided in the customer’s resident country. The ‘General Rule’ means that it’s outside the scope of UK VAT so is zero-rated. The customer then reverse charges to show the VAT in their return. You need to provide evidence that your customer is outside of the UK, this can be a valid VAT ID number for the country of residence.
It’s no longer a requirement for UK businesses to complete an EC Sales List when services are supplied to businesses based in the EU.
B2C services provided in the suppliers resident country would need the UK company to charge UK VAT to their customer.
The services that come under the Special Rule fall within use and enjoyment rules.
It’s also worth having a read of the changes for VAT registered businesses.
For Businesses Selling Goods
If you’re selling goods there are 4 steps you need to follow to make sure your business is compliant with post-Brexit changes. Let’s take a look at them.
The changes for VAT registered businesses may also apply so make sure you take a look at them too - see here..
Step 1: Check if you need a licence to import or export goods
From the 1 January 2021 certain goods may need a licence or certificate to be moved across borders. This typically applies to animal, plants, food and agricultural products - these need labelling correctly, or to drugs, waste and chemicals. It’s worth checking if you’ll need to pay an inspection fee before the goods are allowed into the UK as some goods require this.
The GOV.UK website has all the information on import and export and is worth a read if this applies to your business.
Step 3: Understand how to make a customs declaration
If you currently move goods between Great Britain and the rest of the world/non-EU states then the same rules now apply to moving goods between EU-member States and the UK.
For those less familiar with the rules, from 1 January 2021 you have to make a customs declaration when moving goods between Great Britain and EU-member states. This is something that you can always outsource to an external agent or freight forwarder to ensure compliance and save resource within your business.
Customs Freight Simplified Procedures (CFSP) apply to controlled goods (alcohol, tobacco and certain oils).
Step 2: Make sure you have an up-to-date EORI number
Your EORI number needs to start with GB from 1 January 2021.
Applying for your EORI takes approximately 10 minutes on GOV.UK and in most cases you’ll receive your number immediately.
To apply you might need your Government Gateway ID along with your company information such as your VAT number.
This is essential if you are moving goods between Great Britain and other countries.
Step 4: Check how much tax and duty you need to pay when importing
The quickest and easiest way to check how much tax and duty you’ll need to pay, is to take a look at the UK Global tariff for the goods you’re looking to move.
All goods imported into the UK, apart from goods imported from countries with separate trade agreements with the UK or coming from a developing country, are subject to UK Global Tariffs.
For VAT Registered Businesses
On 31 December 2020 the UK left the EU customs union. For the business community that meant from the 1 January 2021 rules around VAT along with import and export have changed.
UK businesses now need to get to grips with the rule changes and understand the impact for them. With responsibility for customs declarations and paying import VAT, there are some basic but critical changes to become familiar with. What is critical is that you understand how the rules directly apply to your business and that you are using the correct VAT rate.
To help you unpick what this means for you it’s worth taking some time to read through our detailed guide.
Quick advice for all businesses
Regardless of any other specific circumstances there are two points that all businesses should check to protect themselves and their operations.
Check any legal contracts
Review all contracts you have in place from 1 January 2021, especially if you are dealing with EU suppliers and customers. Make sure that you check the terms and, if necessary, reach out to ensure that they are also compliant and can continue working with you.
Double check GDPR compliance
GDPR is being incorporated into UK law in its existing form. Further amendments or trade agreements could see additional steps put in place when moving personal data between the EU and the UK. The Information Commissioner’s Officer has an end of transition guide that’s a great resource to stay up-to-date with any changes.
How we can help
The new rules and procedures can cause confusion. If you’re still unsure about what steps your business should be taking in the post-Brexit world send us a message and we’ll help you to understand what’s relevant to your business.
This information on this page has been prepared for general guidance on matters of interest only, and does not constitute professional advice. It is kept up-to-date as far as possible, but the information is changing rapidly.
You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Effective Accounting (Effective Accounting Solutions Limited), employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.