UK Businesses – Brexit is next! Are you prepared!
The day that has been four and a half years in the making is fast approaching. The United Kingdom is scheduled to leave the European Union on 31 December 2020, when the transitional period comes to an end. HMRC have already started writing to businesses with information on important changes from 1 January 2021. There will be new procedures in place that will need getting accustomed to, for businesses that wish to continue trade with the EU.
As expected, this move will have broad and far-reaching consequences for public administrations, businesses and citizens from1 January 2021. Considering these changes are mandatory and unavoidable, it is imperative for all stakeholders to ensure that they are ready to hit the ground running without business disruptions.
In this blog, we have tried to summarise some key aspects that are likely to undergo change and the new rules that are being suggested for the same.
1.Transporting goods through customs
Any firm which transports goods for their business from the UK, has to follow the customs procedures. They have to contact their UK trading partner and any customs representative and/or transporter to clearly divide the responsibilities. If a company has agreed to be responsible for the UK export declaration, they have to appoint a UK representative if they are a non-resident trader and do not have a registered office or a permanent location in UK. If a company has agreed to be responsible for moving the goods, they have to decide how to move them and also decide on what details are to be given to the transporter.
Also, they have to check with the custom authorities in their nation about the procedures to be followed and the EU import duties to be paid.
2.Import VAT on consignments
Firms have to pay import VAT, if their office is outside the UK and they sell materials whose value does not exceed £135, in consignments to UK firms.
If the value of materials exceeds £135then import VAT, Customs and Excise duty has to be borne by the UK firm and the collection is to be done by the transporter.
3.Changes to VAT IT systems
Companies will have to follow the new digital service available for inspecting UK VAT numbers. There will also be changes in paying VAT on digital services sold to UK buyers and in claiming VAT reimbursement on business expenses.
Companies which provide services, are planning a collaboration with a UK firm, have local partners or branches in UK, and are sending staff for services related businesses, have to be conversant with the rules, regulations applicable in UK and the professional qualifications for eligibility for their employees.
5.Transfering personal data
Companies have to alter the way they are sharing personal details with firms in the UK like customer locations, staff details in documents for outsourced tasks like HR, Accounts, Back office and transferring of customer details.
6.Selling manufactured goods
Companies have to check the rules for tagging, acceptance and trials for selling manufactured materials in the UK market.
7.Employing UK employees
Companies which are employing UK staff with professional degrees have to see that their qualifications are certified by the appropriate EU authority and also abide by the rules for UK staff laid down by the immigration officers.
8.Sending employees to UK
EU, EEA and Swiss citizens employed in UK can remain till Dec 2020 but after that they will have to get permission for European temporary leave to continue working in UK. This will not apply for Irish nationals who can continue to work and study in UK even after 31 December 2020.