On 31 January 2020, the UK finally left the EU after months of debate. Little impact will have been felt so far as we now enter the 11 month period of transition. This is to give the UK time to negotiate trade agreements with countries around the world, with the priority being those remaining in the EU. So until 31 December 2020, the UK-EU business rules will not change. By then the new trade agreements should be in place and businesses will be more familiar with what the future holds.
However, there are certain aspects which businesses need to start taking into account straightaway. For example, many of the 3 million plus EU citizens currently in the UK are employed by UK businesses. The Government stated that there will be no change to their rights or status, but that is only guaranteed until 30 June 2021. Is your business heavily reliant on this workforce?
Prepare for the worst
Below is a list of situations businesses need to be aware of, and deal with, within this transitional period to ensure they are in the best position come 1 January 2021.
- EU citizens who wish to remain in the UK need to register for the settlement scheme. If you have such employees, make sure they are aware of this requirement.
- The trade agreements to be put in place will most likely impose customs duties and processes. Make sure you are aware of how these may affect your export sales or imports for your supply chain.
- Any business trading with the EU/EEA and countries outside the EU/EEA will need a UK EORI number. If this relates to your trade, you should apply as soon as possible.
- The trade agreements will require customs documentation to be completed. Consider if this will be done in-house or will an agent be used. What information will need to be provided?
- If you provide goods or services to the EU/EEA, you will need to have a full understanding of the EU regulations which will apply.
- A simplified system of import procedures is set to be available. This will mean a business will not have to settle VAT and import duties immediately at port. A business will need to register to use these procedures. Would these be the best approach for your business?
- You may already have contracts in place with EU/EEA customers and suppliers. Check to see how these will deal with the new trading aspects.
- For GDPR purposes, you will need to establish whether your data flows includes personal data received from the EEA including from suppliers and processors.
- Will your existing contracts be affected by changes to VAT administration?
- Review all of your risks associated with Brexit and how they will be managed. Where stakeholders are involved, make sure they are aware of your approach.
As you can see, the changes to come will be substantial not only for businesses dealing with the EU/EEA but also those employing EU citizens. Don’t delay until the end of the year to make sure you are Brexit ready. Make sure all relevant people are aware of how things will need to be done come 1 January 2021. If you have any questions about any of the particular points please contact us.
February 24th, 2020