The UK has now (finally) left the EU and the transition period ended on the 31st December, 2020. Trade is now continuing between the UK and the EU under the terms of The Trade and Cooperation Agreement and The Windsor Framework. However, there are a number of sections of this Agreement that have been granted grace periods before being fully enforced. It should also be said that negotiations continue on a number of issues not covered by the Agreement. Therefore, the trading situation between the EU and the UK should be considered as “dynamic”.
To that end, we provide here:
- An Analysis of the true impact of cross-border tax complexity for UK businesses trading into the EU.
- A Check List - to help you prepare questions you may have for Brexit experts.
- Customer Considerations - some points to consider when dealing with your EU clients.
- Customs Procedure Codes - needed for the classification of goods being transported.
- Documentary Considerations - Commercial invoices have to be completed with additional information.
- EORI Numbers - EORI numbers are required for trading with the EU.
- EU Trading Law - This still applies to anyone exporting into the EU.
- HMRC Support. - HMRC provides a useful series of guides and services to help UK\EU trade (for goods worth more than Euro 150, there could be duties applicable in addition to VAT).
- National Export System - Regular traders with the EU will have to register here.
- Product Codes - These will have to be provided when exporting to the EU (and many other countries).
- Professional Advice - Suggested sources of professional advice for trading with the EU.
- VAT - How VAT is to be managed post-Brexit.
- Windsor Framework -Trading between Northern Ireland and Great Britain? What you should do - by when. New details went into effect on Sunday, 1st October, 2023.
If you are selling services into the EU, you may find that you would benefit from establishing a company in Estonia in Ireland. They are easy to register, provide access to the EU market and offer favourable tax regimes. (For more information see: the TTS eGuides to EU Residency.)
Although the Agreement provides for Free Trade between the UK and the EU, this does not mean there are no trade barriers. (Since 1 January 2022, all EU goods entering Great Britain are subject to full customs declarations and controls. This means they must be presented to customs and the export declarations must be entered into HMRC systems to decide if any further physical checks are required.)
There are additional requirements for those bringing into the UK:
You now have to provide advance notice to the relevant bodies of their consignment's arrival into Great Britain.
- The EU-UK Trade and Cooperation Agreement secured preferential tariff and quota-free trade. However, both UK and EU traders must follow ‘rules of origin’. Any products not respecting these rules may well be subject to tariffs. Importers now also must have a supplier's declaration when issuing a statement on Rules of Origin. This proves where the products really come from and, if they had originated in the EU, the importer does not have to pay any additional tariffs (taxes).
- There are significant documentary and checking requirements (see below). These are resulting in higher shipping costs as well as shipment delays.
- The changes in the VAT regime have resulted in significant barriers to trade; especially for:
- Trades of small volumes and values. (However, the IOSS service may well help here - see VAT).
- Trades involving more than one EU country.
- Trade between Northern Ireland and Great Britain is now governed by The Northern Ireland Protocol, which requires extra documentation and checks on trade between the two.
The situation has certainly created a number of challenges for trading with the EU. It is not as straightforward as was previously the case. (If it is any consolation, once you have resolved these challenges, then you should be much better prepared for trading with the rest of the world – so allowing you to cast your net much wider.)
N.B. TradeTech Solutions is not qualified to offer advice. All that we try to do here is point you in the direction of those who are so qualified.