Published: December 18th, 2020 in Latest News
After years of deliberation and preparation, on Friday 1st January 2021, the transition period between the United Kingdom and the European Union will come to an end.
As HMRC encourages businesses of all sizes to take action and ensure that they are prepared for the new rules, many find themselves left finalising the future of their business activities.
If you are unsure of what you need to do between now and Friday 1st January 2021 to secure the future of your businesses operations, we have outlined the new rules, the impact that the new rules will have on businesses in the United Kingdom and what you need to do between now and then to ensure that you are ready for the new rules for business with the EU.
What Are The New Rules For Business With The EU?
As of Friday 1st January 2021, the United Kingdom will cease operating under the European Economic Area regulations that have previously provided United Kingdom based businesses with the ability to trade to EU countries freely.
Instead, United Kingdom based businesses will now face new rules for business with the EU.
The new rules include, but are not limited to the following;
- Import licenses and certificates must be provided by exporters when exporting from the EU
- Customs declarations must be made when importing and exporting
- UK businesses must apply for an EORI number
- VAT and custom duty payments must be paid before importing and exporting
- UK businesses must register as a licensed visa sponsor if individuals outside of the UK are employed
- EU employees must meet the new job, salary and language requirements set out by the UK
What Are The Effects Of Leaving The EU On Businesses Based In The United Kingdom?
With various news rules and regulations in place from the 1st January 2021, we have highlighted what the new rules for business with the EU mean for businesses based in the United Kingdom and the ramifications that the new regulations may have.
As highlighted above, the new rules for business with the EU will impact a business’s ability to move goods into the EU and trade in the EU. A business’s ability to provide services to the EU and hire people from the EU will also be impaired.
If your business currently exports goods to the EU, you will be required to make customs declarations. Failure to make customs declarations could see your export rejected by the border of the country that you export to.
Businesses that import goods from the EU will also feel the ramifications of Brexit. As declared by HMRC, businesses that import from European countries will be required to complete customs declarations.
Furthermore, import licenses and certificates must be provided by the exporter. Failure to provide import licenses and certifications will see any products imported from the EU rejected.
VAT and custom duty payments will also be required for all imports. HMRC has stated that the UK Global Tariff will apply to all goods that are imported unless they are from a country that has developed a trade agreement with the United Kingdom.
Import tax will occur at a standard VAT rate of 20%, while the UK Global Tariff will be dependent on the product imported.
Ensure That You Obtain Permission To Hire From Outside Of The United Kingdom
In addition to changing the way that businesses import and export to and from the EU, United Kingdom based businesses that hire EU nationals will be required to register as a licensed visa sponsor.
Businesses will be required to ensure that any new employees meet the new job, salary and language requirements set out by the Government.
Businesses based in the United Kingdom will also need to obtain permission from the British Government to recruit EU residents.
It should be noted that HMRC has declared that these rules will not apply to EEA and Swiss citizens that are already employed and living in the United Kingdom by 31st December 2020.
Are You Ready For The New Rules For Business With The EU?
As HMRC and the Government announce what businesses in the United Kingdom must do to ensure they are ready for the new rules for business with the EU, we have listed several actions you must take to prepare below.
- Determine whether any of the new rules on importing or exporting goods or services will impact your businesses day to day operations
- Determine whether you need to apply for any licenses that will enable you to import goods to the United Kingdom
- Ensure that your EU exporters can present any import licenses and certificates necessary
- Register for an EORI number to ensure that you can continue to import and exports goods in 2021
- Register as a licensed visa sponsor if you are hoping to employ people outside of the United Kingdom
- Ensure that any new employees meet the new job, salary and language requirements set out by the Government
Irrespective of whether you own a limited company or operate as a sole trader, you must ensure that your business is ready for the new rules for business with the EU.
If you are yet to take action and ensure that you are ready for the new rules for business with the EU, we would highly recommend that you do so now. Failure to prepare your business could see delays to your businesses operations.
Contact The Financial Management Centre Today
If you find yourself at a loss when considering the new rules for business with the EU, at The Financial Management Centre, we are on hand to provide advice and guidance.
We can help you uncover what actions you need to take based on your businesses operations and ensure that you have the information you need to sanction each of the actions.
If you are feeling somewhat overwhelmed with the changes that need to be made, we can take the pressure from your shoulders and ensure that your business is prepared for the new rules for business with the EU.
Simply give us a call on 0333 202 7198 today to discuss your needs with us. Alternatively, email info@tfmcentre.co.uk.
