What you need to know about business post-Brexit
Posted on 18th January 2021
Did the significance of 1 January 2021 slip under your radar? With everything else going on in the world at that point we don’t blame you. After years of discussions and negotiations, on 1 January 2021 the UK officially left the EU, Brexit finally happened.
Days before Christmas a trade deal was reached between the UK and the EU, outlining initial details of how trade and business between the two would work. The finer details are still being released despite Brexit happening at the start of the year. It’s only early days and undoubtedly more information will be released as time goes on and the reality of Brexit makes itself known.
What changes are there? What do you need to know? What new procedures do you need to follow? We’re passionate about keeping it simple and helping you, so have pulled together the answers to those questions to help you navigate business post-Brexit.
What do I need to know?
For businesses supplying services or goods to the EU, there have been changes. Though it is fair to say that the changes are more extensive for businesses selling goods than those selling services.
In a nutshell, the biggest changes you need to be aware of are:
- The UK no longer assumes the Principal VAT Directive - meaning the UK is able to set, reduce or amend its VAT rates
- A licence is needed for the sale and movement of specific goods
- You need to have an EORI number starting with GB
- Customs declarations need to be completed for both importing and exporting goods to the EU
- You may also need to pay tax and duty for moving goods
- Services supplied to the EU are no longer zero-rated and are subject to reverse charge
- Distance selling no longer applies
That isn’t an exhaustive list, and there is plenty more detail behind each of those points that you should be aware of. Not only that but many more changes came into play on the 1 January 2021, we strongly suggest reading up on those that impact your particular business.
We’ve pulled together information on the rules and changes:
It can be complicated but once you’ve taken the time to understand how it applies to your business and you’ve put the necessary procedures in place you’ll be away!
What do I need to do?
The very first thing you need to do is read through the information and work out how the new rules may impact on your business, suppliers and customers.
Next, here’s a quick rundown of things to do or check:
Check if your workers are still eligible to work in the UK
Find out if your workers need permits
Review your contracts, particularly if you’re dealing with EU customers or suppliers
Check your GDPR compliance
For VAT registered businesses you need to establish which VAT rules are applicable to you
The impact of Brexit will be felt differently for each business. The set-up, customer base and supply chain for your business is unique, so there’s no one size fits all guide for what you need to do. The fundamentals, covered above, could apply to most businesses and from there it’s about understanding which categories you fall into, what changes and rules apply and how you can make them work in your situation.
Brexit & VAT : A guide for businesses to VAT changes when trading with the EU after Brexit
The impact of Brexit will be felt differently for each business. The set-up, customer base and supply chain for your business is unique, so there’s no one size fits all guide for what you need to do. The fundamentals, covered above, could apply to most businesses and from there it’s about understanding which categories you fall into, what changes and rules apply and how you can make them work in your situation.
How do I stay up to date?
We’ll keep you updated with all the relevant information as, and when, it’s announced. Here at Effective Accounting, we’ll do our best to break it down as clearly and concisely as we can to make it easier for you to find the information you need.
Our Brexit Hub has just launched and is designed to give you access to the latest news and regulations. Regardless of whether you’re B2C or B2B, or if you sell goods or services, we’ll gather everything in one easy to navigate place.
Not only that, but we’ll signpost you to where to find the full detail if you need to.
It can feel overwhelming to start with. The new rules and procedures might feel alien to you. Our advice is if you are unsure about what steps you need to take to ensure your business is compliant with the changes then seek professional advice. You can contact us and we’ll help you to understand what’s relevant to your business.
Written by
Nicola J Sorrell -
Effective Accounting
Founder | Xero Champion | IR35 Expert
Tagged as: Brexit
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