Preparing and Planning for Brexit?
Firstly, I know that Brexit has been looming for what feels like an eternity, but the final date is approaching. So, do you need to be concerned?
Well, Brexit will only affect your business if:
- You sell goods or supply services to the EU
- You buy goods or receive services from the EU
Does it affect you? Well in the post below I will go through the three main factors that will impact your business and what you should do next to prepare yourself.
Customs after Brexit
Customs is responsible for collecting tariffs and for controlling the flow of goods, including animals, transports, personal, and hazardous items, into and out of a country.
What formalities are there? All non-EU goods brought into the EU must be presented to customs immediately upon their arrival. Once submitted, goods may be stored in temporary storage for a maximum of 90 days while waiting for their customs declaration.
Also, goods brought into the EU from the UK are subject to Common Customs Tariff. Therefore, this means that relevant customs duties will apply to your products.
Indirect Taxation (VAT and Excise Duties) after Brexit
Taxes will apply to goods entering the EU from the United Kingdom, and vice versa, without preferences.
What are Customs Duties? As soon as you buy a product outside the UK, then effectively you become an importer and become liable to Customs, Excise Duty and VAT payments.
A company established in the UK carrying out taxable activities in a Member State of the EU may be required by that Member State to designate a tax representative as the person liable for payment of the VAT following the VAT Directive.
Goods which enter the EU from the UK, or vice versa, will respectively be treated as importation or exportation of goods following the ‘VAT Directive’. Therefore, this implies charging VAT on imports, while exports are exempt from VAT.
Those who supply telecommunications services, broadcasting services or electronic services to non-taxable persons in the EU will have to register for the MOSS (Mini One-Stop-Shop) in a Member State of the EU, such as Malta.
Import and Export Licences after Brexit
Import and export licences issued by the UK will no longer be valid in the EU. Therefore, this means that if you will have to obtain new permits under the new legislation.
- Export agricultural machinery
- Export animal bones, protein and other by-products
- Export animal semen, ova and embryos
- Export art, antiques and cultural goods: special rules
- Export chemicals: licences and special rules
- Export rough diamonds: special rules
- Export drugs and medicines: special rules
- Export food, drink and agricultural products
- Export food for animals
- Export horses and ponies: special rules
- Export live animals
- Export of fish and shellfish products
- Export luxury goods to North Korea or Syria: special rules
- Export medical devices
- Export military or dual use goods, services or technology: special rules
- Export ozone-depleting substances and F-gases: special rules
- Export plants, seeds, bulbs and wood
- Export products made from endangered animals: special rules
For more information check out Gov.uk here: https://www.gov.uk/topic/business-tax/import-export
What Should You Do Next?
All businesses must prepare, make all necessary decisions, and complete all administrative actions as soon as possible, to avoid disruption.
Firstly, ASSESS whether your business trades with the EU or moves goods through the EU. You can answer this simple quiz here if you’re unsure – https://www.gov.uk/business-uk-leaving-eu.
If it does:
- Make sure your business and your importer have an EORI (Economic Operator Registration and Identification). Your number must start with GB. Get it here if you do not have one.
- Decide who will make the export declarations. Do it yourself, check here. Hire someone, check here AND Decide if you want to use the Common Transit Convention (CTC). Find out if you can use the CTC.
- Check the rate of tax and duty for your goods.
- Check what you need to do for the type of goods you export such as export licences (see above).
- Find out how changes to VAT will affect you:
– Find out how you’ll claim VAT refunds from EU countries
– Find out how you’ll pay VAT if you sell digital services to EU customers
- Decide who will transport your goods outside the UK.
- Make sure your business has an EORI (Economic Operator Registration and Identification) starting with GB.
- Get it here if you do not have one.
- Decide who will make the import declarations. If you want to do this by yourself, check here. To hire someone check here.
- Apply to make importing easier. Register here for “transitional simplified procedures” AND set up a duty deferment account if you import regularly. Set up a duty deferment account here.
- Check the rate of tax and duty you’ll need to pay. Check here.
- Check what you need to do for the type of goods you import. Check it out here.
If you or any of your associates need help or guidance regarding Brexit, fill out the simple form below. We can help you navigate VAT laws, international taxation or even helping you set up a new business in the EU. We will discuss solutions and alternatives that you help prepare you and your business during this uncertain time.
We look forward to hearing from you.