Brexit and your business in the months ahead
The impact of Brexit on small businesses: What you need to look out for in the months ahead:
There’s already a lot going on for small businesses in 2021 in the UK. Many are facing huge hardships as they cope with the latest lockdown and continued restrictions. This comes not long after the Brexit deal was agreed.
The UK now operates a full external border with the EU as a sovereign nation. But that does not mean Brexit is over. There are specific terms which still need to be nutted out and deadlines that businesses need to be aware of.
Here is a closer look at the key details you need to be aware of: Upcoming dates:
March: Agreements on data sharing and financial services should be made – with a grace period of three months for certain suppliers/retailers
April: new movement of goods rules to come into force for products of animal origin
June: The EU Settlement Scheme deadline for registration is 30 June 2021.
July: New border controls come into force
July: End of the UK Border Operating Model and customs declarations will become permanent, with additional admin required
July: If a deal on data sharing is not reached by 1 July, the UK will be considered a third country for personal data transfers. This will create new legal requirements
Understanding the rules of origin and tariffs As part of the agreement, there will be no tariffs or quotas on the movement of goods between the UK and the EU. However, goods being moved between the two must comply with ‘rules of origin.’ These documents allow customs authorities to classify where an export has come from and determine what licenses and duties are necessary to allow them to enter the country. Businesses must now provide paperwork which shows where their goods were made, including where the constituent components came from, to determine whether they are subject to tariffs. Learn more about rules of origin at gov.uk.
Know your EORI number and commodity codes Any business trading with the EU needs an EORI number – a code starting with ‘GB’ which enables the business to import goods into England, Wales or Scotland. The government can provide your business with an EORI number in only 10 minutes.
Businesses must also provide a ‘Commodity Code’ when trading with the EU, otherwise they risk financial or criminal penalties. It is fairly straightforward to find commodity codes for any category of goods, and it should only take a few minutes.
If your business trades with Northern Ireland, your EORI number has to begin with ‘XI,’ and you need to register with the TSS Trader Support Service.
Think about your employees EU citizens no longer have the automatic right to work in the UK. There won’t be any changes to right to work checks until 30 June 2021. Up-and-till then, you do not need to impose checks. But after then the process will change. In the meantime, all you need to do is encourage employees to obtain settled status (which can be done here). How qualifications are viewed is also changing. UK bodies now need to negotiate recognition agreements with their counterparts in individual EU member states. This is significant when thinking about the professional qualifications required for a job.
VAT is changing Getting your trading information in order should only take a few minutes – but VAT is a little more complicated. Businesses now need to pay VAT at the point of sale instead of the point of importation. This affects different products differently, and businesses should use the government’s Brexit Checker to determine what this means for them. Apply for postponed VAT accounting if you haven’t already. This enables you to defer paying so you can pay imports on your normal VAT return. We will be hosting a webinar about this on February 10. Sign up here if you are a customer. Businesses can also apply for a Duty Deferment Account which allows them to pay import duty (and other duties) once a month instead of every time they import goods. HMRC has temporarily waived the need to pay a Customs Comprehensive Guarantee.
To keep on top of these changes, it’s worth bringing a trusted accountant on board if you haven’t done so already as they will be the most up to date with VAT changes. Purple Accounts can help with this and be able to offer specific advice based on your business’s circumstances.
Call 01925 268753 or email firstname.lastname@example.org
Some of this information has been taken directly from Gov.uk and is subject to change. Please look out for future updates from the Government.