The UK has left the EU, and the Brexit transition period ends on 31 December 2020. This means UK businesses will need to make immediate preparations for the changes coming into effect on 1 January 2021. The main changes affecting businesses relate to imports, exports, tariffs, data and hiring. In this post, Manchester-based MCC Accountants provides the information you need to know to ensure your business is ready.
Importing and exporting goods
When the Brexit transition period ends, the process for importing goods to, and exporting goods from, the EU will change. From 1 January 2021, your business must:
- Make customs declarations whenever you import or export goods. You can do this yourself, however most businesses use a courier, freight forwarder or customs agent
- Abide by new rules for moving certain types of goods. This includes having the correct export licences or certificates and knowing the marking, labelling and marketing standards for food, plant seeds and manufactured goods
- Have an EORI number that starts with GB
- Pay customs duties and VAT on all imports. For goods exported to the EU businesses can charge customers VAT at 0% (known as ‘zero rate’) on most goods
Note: you should follow different guidance if your goods are sent or received by post, or your business deals with countries outside the EU.
From 1 January 2021, the UK Global Tariff (UKGT) will apply to goods imported from the EU, replacing the EU Common External Tariff.
The UKGT only shows the tariffs that will be applied to goods at the border when they’re imported into the UK, and doesn’t cover other import duties such as VAT.
Use the Government’s UK Global Tariff tool to check the tariffs that will apply to goods you import from 1 January 2021. To find out more about changes in UK tariffs after Brexit from the gov.uk website, click here.
The EU is currently conducting a data adequacy assessment of the UK. If it accepts that the UK’s data protection regime is adequate by 1 January 2021, then personal data can continue to flow freely between the EU and the UK without any action required from your business.
However, because the EU has yet to decide on this and the end of the Brexit transition period is only weeks away, you must ensure you are prepared in case the UK’s data protection regime isn’t deemed adequate. To do this, you should put in place alternative transfer mechanisms, such as Standard Contractual Clauses (SCCs), with EU/EEA organisations who transfer personal data to you – this includes names, delivery details, IP addresses, or HR data such as payroll details.
The UK Government recommends using the Information Commissioner’s Office’s (ICO) website for detailed information on this, as they are the independent supervisory authority for data protection in the UK. They have resources specifically designed to help SMEs understand the key data protection requirements for the end of the transition period.
From 1 January 2021, a new points-based immigration system will apply to people arriving to work in the UK, which means they will need to obtain a visa in advance.
In order to apply for a skilled worker visa, EU citizens will need to show they have a job offer from an approved employer sponsor. If you plan to sponsor skilled migrants from 2021, you will need to apply for government approval and pay a fee which depends on the type of licence you’re applying for.
Full details on the points-based immigration system can be found at GOV.UK here.
To continue living in the UK after 30 June 2021, EU, EEA or Swiss citizens and their family members who are living in the UK before 1 January 2021 need to apply to the EU Settlement Scheme. The government has created an employer toolkit to help you assist any of your employees with this process.
How we can help
MCC Accountants specialise in assisting SMEs in Manchester and Salford with their accounting needs. To find out more about how we can help you ensure your business is well-prepared for the end of the Brexit transition period, call us on 0161 707 1500 or get in touch using our contact page.