TTR Barnes

Last updated: 6 January 2021

The Brexit transition period has ended and there are some essential steps you need to take if your business has dealings with the EU. In this guide we’ll be explaining how to prepare your business for Brexit and the actions you need to take NOW to ensure you can continue your business operations uninterrupted.

What do we know so far about how to prepare your business for Brexit?

The UK has reached a deal with the EU. There are steps your business needs to take now if you:

• Import goods from the EU
• Export goods to the EU
• Move goods to or from Northern Ireland
• Travel to the EU

Buying or selling services in the EU

A consequence of Brexit is that UK businesses providing services in the EU, Switzerland, Norway, Iceland and Liechtenstein will no longer be treated as “local businesses”. This means that businesses may face additional legal, regulatory and administrative barriers.

Services will continue to be covered by VAT Notice 741A and general rules will apply in most circumstances. As a rule of thumb, for B2B transactions the VAT will be due where the customer is based, and for B2C transactions VAT will be due where the supplier is based. There are some exceptions to this, including land-related supplies, transport and admission to events.

There are separate rules for electronically supplied services. Please note from 1 January 2021 you will no longer be able to use the UK’s VAT Mini One Stop Shop (VAT MOSS) service to declare sales and pay VAT due in EU member states. You should no only submit returns including the period ending 31 December 2020 and your final return should be submitted by 20 January 2021.

For sales made from 1 January 2021, you’ll need to register for either:

• VAT MOSS in any EU member state
• VAT in each EU member state where you sell digital services to consumers

Please note you must register by the 10th day of the month following the first sale (e.g. if your first sale is in January 2021 you must register by 10th February 2021).

Things to check:

• Trade regulations for your service area
• VAT on digital services
• That any professional qualifications will still be valid
• Rules around GDPR and data transfer

Importing from the EU

From 1 January 2021 you’ll need to make a customs declaration if your business imports goods from the EU. You can make the declarations yourself, but most businesses use a courier, freight forwarder or customs agent.

You will also need an EORI number – without one you face increased costs and delays. If you already have an EORI number, you’ll need to double check it starts with ‘GB’ as this will allow you to move goods between Great Britain and other countries.

Remember, you’ll need to pay import VAT and duty on all imports over £135. You can pay this when the goods enter the UK, or alternatively you can set up a deferment account and pay the costs monthly

For imports under £135, the place of supply will change from the place of import to the place of sale and UK VAT will need to be accounted for either by the seller or online marketplace. Overseas sellers will be required to register for VAT in the UK and if a online marketplace is involved it will be deemed to be making the supply in the UK

Things to check:

• That you have a valid EORI number, or apply for one if you don’t
• Whether you need an import license/certificate
• Marking, labelling and marketing standards for food, plant seeds and manufactured goods
• Trade tariffs 

Exporting to the EU

The rules for exporting are similar to importing.

As with imports, you will need a GB EORI number. However, it’s also important you check your importer has an EU EORI number or you may not be able to trade. It can take up to seven days to receive your EORI number, so apply now to ensure you have it in plenty of time.

You will also need to make a customs declaration when exporting goods to the EU. See ‘Importing from the EU’ for more information and links on how to do this.

You will be able to charge 0% VAT (zero-rate) on most goods you export to the EU, however remember that the customer will probably be liable to pay import VAT and duty in the country of receipt.

Things to check:

• That you have a valid EORI number, or apply for one if you don’t
• The export licenses/certificates you may require
• If you can apply zero-rate VAT
• If you can use transit to speed up the export process

How to prepare your business for Brexit – business travel

If you’re a tourist, you will not need a visa for short trips to most EU countries, Iceland, Liechtenstein, Norway and Switzerland. You’ll be able to stay for up to 90 days in any 180-day period. However, there are extra requirements for business travel.

You will need to tell the EU if you will be working during your visit and it’s also important to make sure your company has the correct indemnity insurance in place to cover you for your trip.

Things to check:

• That your passport has at least six months left and is less than 10 years old
• You have appropriate travel insurance in place
• Entry requirements for the country you’re visiting
• You have a valid return or onward ticket you can show when entering EU countries
• You can demonstrate you have enough money to cover your stay
• If you need an International Driving Permit (IDP)
• If your mobile data plan covers the country you’re visiting
• Check you have the right documentation to bring any goods with you

What about Northern Ireland?

Cross-border supplies of goods between Northern Ireland and the EU will be treated in the same way as supplies made within the EU. If this proposal is accepted, this means that the sale of goods from Belfast to France will be treated differently to the sale of goods from London to France. This applies to goods only and services will be subject to UK VAT rules.

How to prepare your business for Brexit – checklist

Talk to the experts

For further support and guidance on how to prepare your business for Brexit, get in touch with our North East-based team.

All information correct at time of going to print/live and on the best knowledge and understanding of the author at the time. This article is for general information only and does not constitute financial advice or recommendations for individual circumstances. No responsibility is taken for any actions taken on the base of the information within this article.