Remember Brexit? With coronavirus dominating headlines, it seems a distant memory. But the UK’s transition out of the EU ends on 31 December.
That means the UK will no longer be a part of the European Union from 1 January. You will have no doubt seen the adverts about the transition. So what what does it mean to you and your business?
Many business owners will see little difference because they rarely deal with EU companies. But you should find out now how it might affect you. Even freelancers and contractors shouldn’t underestimate the changes.
Imports and exports
As of 1 January 2021, new rules are in place regarding imports and exports. Be aware that these changes still apply even if there’s ‘no deal’.
You will have to make customs declarations for any goods moved between the UK and Europe. Relevant tariffs will also need paying and there are new processes for moving goods between Great Britain and Northern Ireland.
In order to move goods, an Economic Operators Registration and Identification (EORI) is required from 1 January. You can obtain this online. You can make your own declarations, but most firms are likely to use a courier or agent who can handle administration and paperwork on their behalf.
When supplying services to the EU, there are no major changes to VAT. Normal ‘place of supply’ rules remain intact. For business to business (B2B) services, the supply is where the customer is resident; for businesses to customers (B2C) place of supply is where the business is resident. VAT on services will be due in the EU country where the customer is resident.
Working abroad after Brexit
If you travel to the EU for work reasons, you should now check to see if a visa or work permit is required. Immigration controls have to be adhered to and full declarations made for any work carried out on the continent.
For employees working abroad, things get much more complicated, and expert advice is recommended for calculating PAYE tax and National Insurance contributions.
If you want to employ overseas nationals, changes coming. The new immigration system coming into force on 1 January means that if you want to hire anyone from the EU you need to be a Home Office licensed sponsor. Upon approval, you need to choose the type of licence you want and select a contact in your business to manage the sponsorship agreement.
A few extras
There are some other changes that will make a big impact too.
For example, if you’re using the .eu domain name for your website, you’ll no longer be able to renew this if you’re business isn’t based in the EU. You may need to think about getting a new URL fast if this impacts you. As for data, if your business receives personal data from contacts in the EU, you might need to ensure that the data can continue to flow legally at the end of the transition period. There are so far no changes to sending data to the EU.
Brexit was always going to be messy and it was always going to affect businesses. But with careful planning and the right advice, there’s no reason why you and your firm can’t smoothly transition through this difficult period.
If you are in business and want help with the new rules around tax changes, contact us today