Friday, October 18th, 2019
At Copia Wealth & Tax Limited, we have been following the Brexit discussions closely but found it difficult to advise clients on this area due to the ongoing uncertainty surrounding the whole process and the likely outcome.
Given the 31st October Brexit deadline is approaching fast and with the uncertainty that surrounds it, we thought it would be useful to set out a summary of the areas that businesses should be considering at this time to protect themselves should we exit the EU with “No Deal” at the end of the month.
Please note, that this is based on guidance provided by the UK Government and is especially prevalent to businesses that buy from and/or sell to the EU.
1. Make sure you have (or if you have not, apply for) an Economic Operator Registration and Identification (EORI) number – see https://www.gov.uk/eori
2. Ensure you have sufficient and able resources to complete import/export forms that will be required – help can be found at www.export.org.uk
3. Discuss whether additional information is needed by your haulage company to enable them to make safety and security declarations – guidance can be found at https://www.gov.uk/guidance/declaring-your-goods-at-customs-if-the-uk-leaves-the-eu-with-no-deal
4. If your business imports goods from the EU, then it is worth considering a registration for “Transitional Simplified Procedures” (TSP), enabling registered importers to defer making customs declarations and paying duty. Go to this link for guidance – https://www.gov.uk/guidance/register-for-simplified-import-procedures-if-the-uk-leaves-the-eu-without-a-deal
5. Review guidance on how to prepare for the Customs Declaration Service (CDS) – see https://www.gov.uk/guidance/how-hmrc-will-introduce-the-customs-declaration-service
6. As guidance is constantly being released, it is worth registering for Government webinars and e-mail alerts – go to https://www.gov.uk/government/collections/hmrc-webinars-email-alerts-and-videos?utm_source=referrer&utm_campaign=card-transaction-programme&utm_medium=1-to-many-letter&utm_content=educational
7. It may be worth registering for “Authorised Economic Operator” (AEO) status which enables “Trusted” businesses to use simplified customs procedures – see https://www.gov.uk/guidance/authorised-economic-operator-certification
8. For businesses trading in goods with the EU and who retain stock in the EU for supply to EU customers, local VAT registration and appointment of a fiscal representative may be required – see https://www.gov.uk/government/publications/partnership-pack-preparing-for-a-no-deal-eu-exit
9. For businesses using the UK VAT Mini One Stop Shop (MOSS Union scheme), it is possible to continue to use this as long as you register for the VAT MOSS non-Union scheme in an EU member state – refer to https://www.gov.uk/guidance/vat-it-system-rules-and-processes-if-the-uk-leaves-the-eu-without-a-deal
10. If no deal does happen it may be worth considering setting up a company within the EU.
In the event of “no deal” all exports and imports to the EU will be subject to tariffs under the rules of the World Trade Organisation (WTO). You will need to identify where “inputs” come from and which categories of product they fall into so you can work out the tariffs that will apply – see https://www.wto.org/english/tratop_e/tariffs_e/tariff_data_e.htm and http://madb.europa.eu/madb/euTariffs.htm
UK product standards and regulations will, of course, be aligned to the EU at the point of exit. In the event of “No Deal”, there is a risk that UK assessment and certification arrangements could cease to be recognised by the EU.
It is probably best to ensure your documentation on standards for all product lines is up to date and readily available in case this needs to be reviewed post-Brexit.
These may need to be amended to cover off areas such as customs arrangements, import duties, how VAT is accounted for, definitions such as “Territory”, dispute resolution and unanticipated administration as a result of Brexit and so it may be worth a conversation with your lawyer.
1. It is worthwhile reviewing EU employees currently working in your business and, in event of “No Deal”, suggest they apply for “Settled status” by 31 December 2020 – https://www.gov.uk/government/publications/eu-settlement-scheme-employer-toolkit
2. If you have UK employees working in the EU, then they may need to apply for similar status in their location.
1. For businesses involved in e-commerce, it is worth reading Government guidance – https://www.gov.uk/government/publications/ecommerce-eu-exit-guidance
2. Businesses may need to comply with new licence requirements relating to data protection and changes in regulation. There is an ICO checklist here – https://ico.org.uk/media/for-organisations/documents/2614365/leaving-the-eu-6-steps-to-take-final.pdf
3. It remains unclear if EU trademarks would be applicable in the UK post-Brexit. If you own intellectual property rights it may be worth contacting your lawyer for advice.
4. Sterling is currently volatile due to the uncertainty and this may continue in the short term, so currency risk needs to be carefully managed.
The above list is not exhaustive but indicates key areas for consideration – as some of these are not quick fixes it may be worth allocating some resources to them “just in case” but we appreciate it is difficult as the potential outcome seems to change on a daily basis.
As ever, the expert team at Copia Wealth & Tax are here to help – a quick call to 01902 783172 is all that is required, and with that in mind, we very much look forward to hearing from you.