Information regarded changes businesses will have to undergo and how importing and exporting goods outside of the UK will now have to operate differently starting from the 31st of January.
The spectacle about whether or not the UK would leave the EU with or without a deal had finally ended on 31st December 2020. This may be a stressful time for many businesses as multiple different changes will need to be made to move forwards.
Leaving the EU will have always affected British Citizens but primarily businesses. Businesses will now have to start operating differently. Many businesses in different sectors are now worried about not being able to employ individuals from the EU, as before Brexit, free flows of movement allowed people to travel and work freely throughout the EU, however, now the free movement of people has been abolished. Sectors such as construction, healthcare and engineering, in the past would have recruited many employees from other countries in the EU to work in the UK.
Changes have been made, meaning you will now be required to have a sponsored licence to hire workers from outside of the UK.
This will demand more time and effort to now be able to employ workers from outside of the UK. Over time, Great Britain may see a substantial decrease in overseas employment. For more details on this matter, please visit https://www.gov.uk/guidance/recruiting-people-from-outside-the-uk
Even though the Brexit transition period had ended on the 31st December, negotiations will still carry on between the UK with the EU to agree on how the movement of goods, services and people will be refined.
Some of the changes being made that companies will need to be aware of, but not limited to include:
- State Aid
- Importing goods from the EU
- Low-Value Consignment Relief (LVCR)
- Withholding Taxation
Using taxpayer-funded resources to assist one or more organization in a way that gives an advantage over others is considered at state aid.
State Aid rules apply to the following:
- Tax breaks, including enhanced capital allowances
- The use or sale of a state asset for free or at less than the market price
For more information on this subject, please visit this page: https://www.gov.uk/guidance/state-aid
There will be no changes to the treatment of VAT or how you account for the movement of goods between Northern Ireland and the EU.
If you want to be open for import VAT Return, you must tell the person dealing with customs for you to select this on your customs declaration and enter your details as the consignee.
You are eligible for import VAT on your VAT Return if:
- The goods you import are being used strictly in your business
- You include your VAT registration number on your customs declaration
For more information, please click on this link to divert you to the GOV UK page, https://www.gov.uk/guidance/check-when-you-can-account-for-import-vat-on-your-vat-return
Importing Goods From the EU
Importing goods from the EU, businesses will now need to follow different implications, for more information on this matter, please visit this page https://www.gov.uk/import-goods-into-uk
Low-Value Consignment Relief
At the end of the transition period, starting from 1st January, a new model will be introduced for the VAT treatment of goods entering the UK from outside of Great Britain. This will ensure that businesses and companies are not disadvantaged by competition for VAT-free imports.
For further readings on this case, please visit this website. https://www.gov.uk/government/publications/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021
From 1st January 2021, some EU countries may start to deduct tax from interest. The amount of TAX deducted will depend on the double taxation agreement between the UK and relevant EU countries.
For more information regarding withholding taxation and changes your business may need to undergo, please follow this link. https://www.gov.uk/guidance/receiving-interest-royalties-or-dividends-payments-from-the-eu
What Changes Are Being Made When Exporting Goods Outside of the UK?
When exporting goods with other European countries, please firstly find the correct commodity code, so you can correctly classify your goods, as well as:
- Fill in declarations and other paperwork
- Check if there’s duty or VAT to pay
- Find out about duty reliefs
Please you this link to help you find the correct commodity code for your imports or exports out of the UK. https://www.gov.uk/guidance/finding-commodity-codes-for-imports-or-exports
NOTE: The existing commodity code system continues to apply.
Secondly, be aware that to export certain goods, you may require a licence. Licences are required for some goods such as:
- Animals / Animal Products
- Drugs / Medicines
- Military Goods / Services / Technology
To view the full list please visit this page https://www.gov.uk/export-goods
NOTE: You may apply for multiple licences when exporting multiple goods listed in the link above. For example, if exporting Chemicals & Drugs, you may require to apply for two separate licences.
To get your business ready to export, make sure that you have applied for an EORI (Economic Operators Registration Identification) number that starts with GB to export goods from England, Wales or Scotland. If exporting good to or from Northern Ireland, your EORI number will start with XI.
Make sure that the person or business receiving goods has checked if:
- To make an import declaration in their country
- Licences or certificates to receive goods from the UK
To apply for an EORI and to view more information, please visit this page https://www.gov.uk/eori?step-by-step-nav=b9347000-c726-4c3c-b76a-e52b6cebb3eb
Next, you and the person or business you are exporting to will need to have an agreement on who will make export declarations and transport the goods. This can be done by yourself, or somebody can be hired to complete this task. If somebody is hired, less time will be spent at the stage of exporting goods outside of the UK.
You will need to make sure that you have prepared the invoice or any licences/certificates as these will need to travel with the goods being exported outside of the UK.
If exporting to a country with 0% or minimal VAT please click this link to get proof to show where goods are being exported from. https://www.gov.uk/guidance/get-proof-of-origin-for-your-goods?step-by-step-nav=b9347000-c726-4c3c-b76a-e52b6cebb3eb
Please use this link to validate if you are eligible to export goods with 0% VAT rate. This will mean that your customers pay 0% VAT. https://www.gov.uk/guidance/vat-on-goods-exported-from-the-uk-notice-703?step-by-step-nav=b9347000-c726-4c3c-b76a-e52b6cebb3eb
If you have hired somebody to deal with UK customs for you, they will make the declaration and get your goods through the border.
Otherwise, if you are doing this by yourself, ask the business or person that is buying your goods what information you will need to provide you to exports good outside of the UK.https://www.gov.uk/export-customs-declaration?step-by-step-nav=b9347000-c726-4c3c-b76a-e52b6cebb3eb
Lastly, it is your responsibility to make sure that you have a record of all commercial invoices and any additional customer paperwork.
If you are VAT registered, record all the goods in your VAT account, even if the goods a taxed at 0%, just so you have proof of the goods being exported to other European countries.https://www.gov.uk/vat-record-keeping/vat-account?step-by-step-nav=b9347000-c726-4c3c-b76a-e52b6cebb3eb
If exporting controlled goods, make sure you keep the paperwork showing who owns the goods.