EU exit – time to take action

From 1 January 2021 the way we do business in the UK will change, regardless of whether a trade agreement is reached. Businesses should prepare now to avoid interruption to operations and understand the opportunities presented.

How we can help

We can support you to make necessary changes during this period of uncertainty. Our dedicated team of experts can help whatever stage of your planning journey. So whether you’re reviewing your process for importing or exporting goods, hiring people from the EU or want to know more about providing services in EU markets, we welcome you to get in touch .

What to consider now

Below is a high-level checklist of points to consider: 

Goods

  • EORI number - If you expect to sell goods to, or purchase goods from, EU member states post 1 January 2021 (exports and imports respectively) have you confirmed that you hold a valid GB issued Economic Operator Registration and Identification (EORI) number?
  • Customs duties / Import VAT – have you reviewed your customs declaration procedures and the risks your business may face when your goods are valued at the UK/EU customs border including any potential additional customs duties?
  • Payment of import VAT and duty - have you looked into how you will settle customs duties and import VAT payments that arise, to clear imported goods (e.g. setting up duty deferment accounts and/or using postponed VAT accounting)? Have you considered the possibility of a “guarantee waiver” of the bank guarantee requirement for existing and new duty deferment accounts?
  • Agent - related to the above, are you in the process of appointing an import/export agent to handle your declarations etc? Have you considered whether representation will be direct, or indirect?
  • Distance sales – if you sell goods to private individuals in EU member states from the UK, have you considered any VAT registration requirements based on the location of your customers?
  • Triangulation – have you reviewed alternative arrangements if part of your supply chain involves the EU VAT triangulation simplification structure?
  • Inward/outward processing reliefs – have you considered these reliefs in respect of goods re-imported or temporary import and export arrangements? e.g. goods transported from the UK to an EU Member state where they are processed and re-imported to the UK or vice versa.
  • Commercial arrangements / contracts – have you engaged with your supply chain and reviewed your commercial contracts including default legal positions, contractual obligations (e.g. Incoterms) that you currently have with your suppliers and customers to determine which party  will be the importer of record and be responsible for any import duties and import VAT?
  • Northern Ireland – are you prepared for the changes affecting goods moved between the UK mainland and Northern Ireland. Have you considered the proposed arrangements including potential amendments for GB/NI trade?
  • Goods under £135 value – have you considered the new VAT registration arrangements for importers selling to UK private customers where the value is under £135?

Doing business

  • VAT Mini One Stop Shop (MOSS) scheme – Have you considered how you will account for VAT if you sell digital services to private customers (B2C) in the EU and currently account for the VAT in the UK using the union MOSS scheme? Are you prepared for a transition to the non-union MOSS scheme or considered whether additional VAT registration may be required?
  • Provision of financial services to EEA customers – If you are a financial services firm providing services to EEA customers have you checked you have the correct regulatory permissions?
  • Providers of travel, medical and motor insurance covering travel to the EU – Have you checked your policy wordings to ensure appropriate changes have been made in relation to the validity of the European Health Insurance Card and the need to obtain a Green Card in relation to motor insurance?
  • Use of outsourced service providers located in the UK in financial services – If you have set up an EEA presence have you considered whether any group outsourcing arrangements to the UK meet local regulatory requirements? 

People

  • Recruiting and retaining employees who are not UK national - From a workforce planning perspective, you will need to understand which of your critical or high-volume roles are filled by EU nationals within the UK, or UK nationals in the EU.
  • Have you considered the immigration implications of moving EU / UK nationals. Will your employees qualify for the relevant visas, and are your entities set up for sponsorship of those individuals?
  • Social security for internationally mobile employees – Employers should consider the impact of a hard Brexit on social security coverage and benefit provision for their employees who travel between the UK and EU (including EEA & EFTA countries and Switzerland)
  • Cost management – There will be additional costs to comply with new regulations, putting pressure on employee pay and reward. You should therefore review your reward strategy, salary sacrifice arrangements and employment related securities.

Reporting

  • Accounting and financial reporting – Have you considered how best to communicate the operational changes to the finance team to ensure the changes are incorporated into the accounting records and factored into preparing and disclosing the required information within the financial statements?

Get in touch

To find our more, please email us or speak to one of our contacts below: