Planning a product launch? A new venture? A big sales and recruitment drive? Even small businesses plan 3 months, a year or even 3-5 years ahead. So we’re all incredibly frustrated by the fact that we’ve not been able to plan ahead properly for Brexit.
The last minute Brexit deal
We’ve summarised key changes in this actionable plan for business owners in the South West. We’ve set out some of the big changes which will affect your business.
If there’s something we haven’t covered, contact us with your questions.
Importing Goods from the EU
You will need to:
- make customs declarations
- pay VAT and duties (look up the applicable tariff here)
- include the additional costs in your prices and cashflow forecasts
- have and use your EORI number.
Your courier, freight forwarder or customs agent should be able to make customs declarations for you or on your behalf.
Recovering VAT paid on imports
You can use Postponed VAT Accounting to to recover VAT paid on imported goods valued at more than £135 (exc VAT). To do this, you must:
- elect to use PVA on your customs declaration
- use your own VAT registration and EORI numbers on the customs declaration
Xero are introducing PVA capability in their MTD for VAT returns software.
Find out more, including applicable tariffs, at gov.uk/prepare-to-import-to-great-britain-from-january-2021.
Exporting Goods to the EU
You will need to:
- make customs declarations
- check if you can charge VAT at 0%
- have and use your EORI number.
Your courier, freight forwarder or customs agent should be able to make customs declarations for you or on your behalf.
Furthermore, you may need to register for VAT in the EU country you’re selling to if you are distance selling to consumers and the total value of the goods is over the threshold (€35,000 in most cases). (Be aware that the EU are introducing a one stop shop, expected to take affect from 1 July 2021, which will mean that you can register in one EU state and sell into another).
Find out more at gov.uk/prepare-to-export-from-great-britain-from-january-2021.
Selling Services to the EU
The supply of services to the EU isn’t specifically mentioned in the deal. This means that, by default, it is being brought into line with existing arrangements for the supply of services to non-EU countries. In general, this is determined by the ‘place of supply‘. For businesses to business sales, the place of supply is usually where the customer belongs. While for business to consumer sales, the place of supply is usually where the supplier belongs.
If the place of supply is outside the UK, or the services come under the ‘use and enjoyment rules‘ and are used and enjoyed outside the UK, they will be ‘outside the scope’ of UK VAT.
In addition, you no longer need to complete an EC Sales List when supplying services to businesses in the EU.
Employing EU staff
Encourage employees to apply to the EU Settlement Scheme.
In addition, you will continue to be obliged to check that employees have the right to work in the UK.
Where to start?
If you’re unsure what rules you need to follow, how you’ll reclaim VAT or any other question about Brexit, please get in touch.
If it’s time for fresh eyes on your business, our team are on hand to carry out a review:
