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Brexit Transition: The Future of Your Business

Are you running a business that operates within the European Union? Does your business export and import goods to and from the EU? Do you want to know about the impact that Brexit will have on your business? In this article we will cover all of this and more by addressing the following requirements:

  1. What is the transition period?

  2. Impact on Businesses Exporting Goods to the EU

  3. Impact on Businesses Importing Goods from the EU

It is important for businesses to be aware of the impact that Brexit will have on their daily operations.

What is the transition period?

The United Kingdom (UK) left the European Union (EU) after lengthy negotiations on 31 January 2020. The period from this date to 31 December 2020 is referred to as the transition period.

As of 01 January 2021, Great Britain is no longer a member of the European Union’s single market and customs union. This means that Great Britain now has customs borders with the EU. As per the Northern Ireland Protocol, Northern Ireland remains part of the EU Customs area for goods to allow an open border with the Republic of Ireland.

During the transition period a free trade agreement was made between the UK and EU whereby the UK and EU Members received preferential treatment in relation to tariffs and quotas.

Impact on Businesses Exporting Goods to the EU

To import goods from an EU Member, you will need an Economic Operators Registration and Identification number otherwise referred to as an EORI number. The EORI number must begin with GB.

All businesses exporting and importing goods to the EU must now make a customs declaration. Most businesses use UK-based freight forwarders with some using customs agents or fast parcel operators. Particular goods may require export licences or certificates.

There are two types of custom declarations which apply for exporting goods to Great Britain from the EU.

  1. An Entry in the Declarant’s Records: whereby you will make an entry in your records. However, this is limited to goods which do not require a pre-departure. Further, you will need to submit a C21 form via the National Export System.

  2. A Simplified Declaration Procedure which involves providing fewer customs details in the first instance as opposed to a full declaration.

Further to the 2 declarations above, the business must within 14 days of the declaration provide the remainder of the customs export information. The information will need to be provided in the form of a supplementary declaration. There are some exceptions to this i.e., HMRC may authorise a business to use simplified declarations if they are registered to the National Export System.

Whilst UK Value Added Tax does not apply to most exports, the importing EU Member country’s Value Added Tax will most likely be applied.

Impact on Businesses Importing Goods from the EU

Post Brexit transition period there are several elements which you should consider as a business owner.

Location is important

The rules will differ depending on whether you are importing to Great Britain or to Northern Ireland.

Method of importing

The method of importing is also important as the rules are different for goods imported by post.

The main two differences to be wary of post-brexit are customs and VAT considerations.

To import goods from the European Union you must:

  1. Have your EORI number starting with GB. An EORI number is also needed for any EU country in which you will be making customs declarations or receive customs decisions.

  2. Ensure that you have received an accurate statement of origin from the EU supplier i.e., information on classification, origin and the value of goods. If you do not do this, you will not be able to claim preferential rates for importing goods.

  3. Ensure that any controlled goods do not have any delayed declaration.

  4. Ensure that all goods are declared when they enter Great Britain.

  5. Ensure that you pay any customs duties and any applicable VAT.

It is important to note that you can delay an import declaration for up to 175 days after the date of import (excluding controlled goods). This is only applicable for imported goods received on or by 30 June 2021. After this point your company must submit a supplementary declaration of any customs payment due by the fourth working day of the month after you make an Entry in Declarants Records or submit a simplified frontier declaration.

Goods imported from outside the UK can have postponed VAT accounting for businesses that may want to avoid paying import VAT up front. To do this you can declare the import VAT on your company’s VAT return. You do not need any authorisation from HMRC to do this.

How can Pure Business Law help?

If you are a business which is importing or exporting goods to the EU, please contact us and book a consultation with one of our expert business and commercial law solicitors. We are specialist Commercial Law Solicitors based in Bedford and operate nationally.

Our highly experienced business and commercial Solicitors can help in advising and acting on your business’ behalf and drafting any documentation required.

If you would like to discuss anything raised in this article, please contact us and speak with one of our solicitors. Pure Business Law is regulated by the Solicitors Regulation Authority and is a licensed member of the Law Society of England & Wales.

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