January 2020

This week Esther attended a Brexit webinar which covered the key changes you will need to consider if you trade with customers in the EU.

This is a brief summary with links provided for you to obtain further information, if required.

The Key Brexit Changes

1. 1. Exporting – customs declarations
  2. Work Permits – country dependant
  3. Data Sharing – ecommerce
  4. Northern Ireland Protocol

1. Exporting Goods

Whilst at first glance it would appear that we have a tariff-free agreement in place with the EU (with some exceptions such as plant and meat exports) this is not necessarily the case. Instead you need to consider the Rules of Origin.

Rules of Origin

Where goods originate in the UK the export can be tariff-free, however where the goods originate elsewhere there could be tariffs applied, even if they come to the UK for modification before being sold to customers in the EU.

For example, cane sugar is imported to the UK from the Caribbean, where it is then refined in the UK to make the end product (sugar) which is packaged and sold to supermarkets across the world. As the sugar cane does not originate in the UK, tariffs will apply when the sugar is sold to supermarkets in the EU and customs declarations will be required.

The rules of origin apply in both directions, therefore impact goods you export and goods you import.

Businesses will be able to self-certify the rules of origin for their exports, however qualifying evidence will need to be submitted. You have a 12-month grace period to gather this evidence.

Exporting to Northern Ireland is tariff-free but businesses need to register for the Trader Support Service on Gov.Uk.

Gov.uk/rules-of-origin-for-goods-moving-between-the-uk-and-eu

Exporting Goods via the Post Office or a Postal Service

Businesses who use a parcel provider to send their goods to customers in the EU will need to consider the value of what is being sent. The rules now match those already in place for goods sent to the US and other overseas locations, outside the EU

· Under £900

Where the value of the goods being posted is less than £900 you need to complete a customs form online

· Over £900

Where the value of goods being posted is greater than £900 you need to carry out a full customs declaration using your EORI number

EORI numbers

All VAT registered businesses should have automatically been provided with an EORI number but if you haven’t received this you can apply online, it takes around 5 days to be confirmed – Gov.uk/eori

You may need more than one EORI number:

If you move goods to or from the EU your EORI number will start with GB
If you move goods to or from Northern Ireland you will need an additional EORI number that starts with XI

Expect to see an increase in your postal charges as the shipping providers will need to increase fees to cover additional administration costs.

2. Business Trips to the EU

Unlimited free movement within the EU for UK citizens has now ended. In its place we are restricted to 90 days travel within a 180 day period, without the need for a visa. This applies to business travel and holidaymakers.

Visa-free

There are only certain work-related tasks you are allowed to perform without the need for a visa, a few examples include:

Conducting meetings and consultations
Research and design
Attending trade exhibitions
Tour guides, where the tour starts in the UK.

Excluded:

Direct sales activity to the public
Musicians on tour

Work Permits

Where the activity is excluded from the visa-free travel you will need a work permit. This is required for each country you’re travelling to.

You will also need to check that the qualifications which permit you to work are recognised in the country you are working in.

ESTA Forms

From 2022 all travellers to the EU will need to complete an EU version of the ESTA form and pay a fee (approx. £6). ESTA stands for Electronic System for Travel Authorization.

3. Data Sharing

Nothing much changes in this area for now. The General Data Protection Regulation (GDPR) rules will remain, as they have been written in to UK law.

E-commerce & online advertising

If you do business with countries in the EU you will need to ensure that you comply with the rules of each country you’re selling to. This could potentially mean a lot of work to ensure you meet the online sales rules for each place your website is used to sell your products!

4. Northern Ireland Protocol

The Northern Ireland Protocol avoids a hard border on the island of Ireland, in line with the requirements of the Good Friday Agreement. Instead the EU border is effectively in the Irish sea.

This means that Northern Ireland remains part of the EU single market and therefore goods from Britain need to be treated as exports to the EU with the necessary customs declarations fulfilled, however as Northern Ireland remains part of the UK, trade with customers here remains tariff-free.

It’s a complicated aspect of the Brexit arrangement you should review this protocol carefully if you have customers in Northern Ireland.

Conclusion

Beyond the politics of Brexit there are a lot of people within the government and at HMRC who want this to be an opportunity for businesses.

There is a wealth of information on the Gov.UK website (Gov.uk/transition), however lots of the rules are not yet set in stone and agreements are still being discussed, therefore there’s going to be a period of time in 2020 where you need to keep checking the rules.

As an alternative source of information, you could visit the Brexit Support Hub, hosted by Enterprise Nation. Here you will find lots of advice, along with advisors available to help by phone and email.

Enterprisenation.com/Brexit-advice-service/

In the coming weeks the team at a4c are booked onto a number of courses which relate to VAT and accounting treatments following Brexit. We will be sending out further information in this area once we’ve digested it ourselves.