In the midst of the pandemic, businesses owners have had to pivot their plans to ensure they are best positioned to overcome everything the last year has thrown at them. In the shuffle of everything else going on, for many people Brexit has taken a backseat.
Now with the UK officially no longer part of the European Union, and the transition period over, there’s the ever-present question: What does this mean for small and medium sized businesses?
Breaking down Brexit
The UK leaving the European Union means that they are no longer part of the EU’s single market and customs union. When a country is an EU member state, they are part of one shared trading area. There are lots of benefits to this, from free movement - which impacts travel and employment across the area, to trading logistics - including no tariffs, border checks, very little requirements for import/export documentation and a combined VAT system.
So, how will this change now the UK has left the EU?
Trade
The regulations around customs and VAT requirements have changed. The good news is, there are no tariff charges on goods, or quota limits on the amount that can be traded. However, from the 1st January there have been customs checks at the borders, and exporters from the UK and EU now need to make custom declarations when transporting goods.
Making a custom declaration can seem a bit overwhelming to start off with, and while you are can make the declaration yourself (you can find more information about that here), you also have the option to employ a third party to handle the details. Popular options are customs agents, freight forwarders or couriers. Regardless of who deals with the nitty gritty paperwork, you are liable for all documents and information submitted to HMRC, so you will need to keep hold of all the documentation. If incorrect information is given to HMRC you could be subject to an investigation and fines.
EORI Number
When any UK business is transporting goods from the mainland UK, they are required to have an Economic Operators Registration and Identification, or EORI, number. If you don’t have one already make sure to apply for it now. Without it your goods can get stuck in customs, which can lead to shipping delays and storage costs.
To apply you will need:
- Your Unique Taxpayer Reference (UTR)
- The start date of your business and Standard Industrial Classification (SIC) code. (You’ll be able to find this information through Companies House).
- Government Gateway user ID and password
- VAT number and effective date of registration (if you’re VAT registered)
- National Insurance number - if you’re an individual or a sole trader
Find the full trade and cooperation agreement here.
Financial Services
If you work with a UK financial business, you have probably been significantly impacted by Brexit. With the new legislation cutting off access to EU customers you will need to ensure you have set up subsidiaries within the EU in order to retain access to them.
This is not the case for EU businesses. Currently UK businesses have granted them temporary permission, enabling them to keep servicing UK customers.
Business Travel
One of the most notable changes centres around travel regulations and the new requirements in place for EU travel. If you need to travel to a European country for business meetings or conferences, you should not need a visa or work permit. This is in place for travellers who plan to be in the EU for less than 90 days over a period of 180 days.
Should you need to stay longer, you’ll need a visa, work permit or other documentation. The rules vary across countries so make sure to check the guidelines for your intended destination to avoid getting caught short!
Recruitment
The new rules differ slightly according to whether you are currently employed within the UK, or whether you are living outside the UK, in the EU, EEA and Switzerland, but are hoping to gain new employment here.
Current employees
If you’re from the EU, EEA and Switzerland and are currently employed within the UK, you have until the 30th June 2021 to apply to the EU Settlement Scheme. It’s a free process, and if you’re successful you will be granted settled or pre-settled status.
Prospective Employees
Non-UK citizens from the EU, EEA and Switzerland, who don’t already reside in the UK, will need to secure an employment offer from an approved employment sponsor. If you would like to employ people from the EU you will need to apply to become an approved sponsor, which will last for four years.
There is a Government Brexit checker to assist with the planning for business, family, and personal circumstances. It can help provide you with a personalised list of actions. You can also sign up for emails to get updates for what you need to do.
If you require any further information, feel free to get in touch. We are available on 01322 555 442 or happytohelp@bluerocketaccounting.com.
