Brexit advice for business

Government announces £20 million SME Brexit Support Fund:

This grant of up to £2,000 could be very helpful to SMEs that only trade with the EU and are new to importing and exporting and need practical support. 

UK and EU agree Brexit trade deal

Nick Farmer - Menzies Accountant

Nick Farmer, Partner and head of International:

This is obviously good news and significantly better than a no deal, so in that respect business will be breathing a sigh of relief. However this isn’t a comprehensive trade agreement and there’s still much that can be done, especially in relation to services. It’s the start of a new chapter and let’s hope that there can be further discussions that continue to improve the trading relationship for the benefit of both sides. Once the dust has settled and the full detail has emerged we will be able to expand on exactly what this means for UK businesses.

TCA – Guidance on the rules of Origin

Sean Turner

Sean Turner, VAT & Transport and Logistics Specialist

To benefit under the TCA, goods will have to be of UK or EU origin, meaning they must meet the UK-EU preferential rules of origin.  The rules are set out in the TCA and determine the origin of goods based on where the products or materials used in their production come from.  The rules ensure that preferential tariffs are only given to goods that originate in the UK or EU and not from third countries.

Goods that do not meet the rules of origin, will not be able to benefit from preference under the TCA.  For exports to the EU, this will be their Common External Tariff and for imports, the UK Global Tariff.

Global Connectivity – International Services made truly global through our membership of HLB

HLB The global advisory and accounting network

Our membership of HLB enables us to provide you with comprehensive support to navigate the Brexit process, either through services we provide, or by leveraging the HLB network of member firms that service clients throughout the EU and in over 150 countries.

Need specialist advice and support for your business?

Nick Farmer - Menzies Accountant

Nick Farmer

DD: +44 (0)1784 497 153

International Specialist

Charlotte Langdon - Menzies Accountant

Charlotte Langdon

DD: +44 (0)1252 894 942

Manufacturing Specialist

Sean Turner

Sean Turner

DD: +44 (0)2074 651 908

VAT & Transport and Logistics Specialist

Martin Hamilton

Martin Hamilton

DD: +44 (0)1784 497 127

Retail Specialist

Rebecca Wilkinson - Menzies Accountant

Rebecca Wilkinson

DD: +44 (0)1483 758 900

International Desks Specialist

More Useful links

Brexit webinar recordings

Our latest resources and support

The UK left the EU on 31 December 2020. The terms of the Withdrawal Agreement provided for a Transition Period through to 31 December 2020 during which time the UK has remained in the Customs Union and the Single Market.

Now that we have the Brexit trade deal, businesses can breathe a sigh of relief but must not stop planning ahead. Understanding how individual risk factors might affect their business model is critical and the degree of risk exposure will vary from business to business. Business leaders must take ownership of the situation and prepare a bespoke plan to support them through the changes that lie ahead.

Without a clear understanding of how individual risk factors might affect their business model, small and medium-sized businesses are in danger of doing nothing and facing the consequences.

Relief on returning goods located in an EU member state on 31 December 2020

HMRC has provided guidance on relief for goods returning to the UK from the EU, after the end of the transition period, which will be welcome news for importers reimporting goods after 31 December 2020.

From 1 January 2021, goods arriving in Great Britain (England, Scotland and Wales) from the EU will be subject to import duties and VAT, unless a relief applies.

To allow importers extra time to return goods to Great Britain from the EU, a special extension period has been agreed.  Goods transported from the UK, which are located in the EU on 31 December 2020, will be eligible for relief, even where the normal three year time limit for reimportation has expired, if the goods are reimported into Great Britain, on or before 31 December 2021. 

The importer will not have to give a date that the goods were exported from the UK, but must be able to demonstrate that the goods were in the UK before 31 December 2020.

HMRC’s guidance will be updated on 1 January 2021, with all the qualifying conditions for relief for goods returning to the UK on or after 1 January 2021.

Sean Turner

Sean Turner

Senior VAT Manager

Are you looking to open a business in Ireland?

Our global connectivity allows us to put you in contact with a number highly qualified firms and services internationally, see HLB Sheehan Quinn’s resource to the right on how to establish a business in Ireland and the services they can assist you with.

HLB Ireland: Sheehan Quinn’s solutions for UK Businesses

Brexit has created a number of changes directly impacting UK companies. In recent months we have seen many recurring themes. If you fall into any of the following categories, HLB Sheehan Quinn can assist you.

  • UK Company supplying telecommunications, broadcasting or electronic services to the EU.
  • Owners of an Irish incorporated company with UK directors.
  • Business to Business supply of goods from the UK to Ireland.
  • A business that uses triangulation
  • A business requiring EU regulation

Companies House Changes Effective 11pm on 31 December 2020.

Following the UK exit from the EU, Companies House has commenced issuing letters to companies with EEA corporate officers requesting the following information;

  • The legal form of the company
  • The law by which it is governed

The forms to be completed are CH02/LLCH02 for directors and LLP members and CH04 for secretaries.

From the 31 December the companies will have 3 months to update their records with Companies House.

Company Secretarial will deal with any letters forwarded to Menzies as the registered office, where we are not the registered office please forward to us letters sent to the clients which they might forward to you.

The following  forms will be updated with changes to EEA corporate officers.

FormName
IN01Company incorporation
LLIN01LLP incorporation
AP02Corporate director appointment
LLAP02Corporate LLP member appointment
AP04Corporate secretary appointment
CH02Change of corporate director details
LLCH02Change of corporate LLP member details
CH04Change of corporate secretary details

Confirmation statement

There will be minor changes to references in sections C1 and C3 of the CS01 Form which refer to regulated markets outside the UK

For further information please contact Anna-Lisa Brandini, Company Secretarial Manager at: ABrandini@menzies.co.uk or +44 (0)2037 953 453

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Changes to indirect tax

Do businesses need to adapt their supply chains for Brexit?

  • Where goods are involved, act now to review supply chains
  • Plan for a worst case scenario, where a hard border will exist on 1 January, resulting in formal import/export declarations between the UK and EU
  • Within contracts, review of customer and supplier delivery terms is essential
  • Where importing, who will be importer of record and responsible for import VAT and duty
  • Will UK customers push back on EU suppliers wanting DDP terms.  We have already seen examples of this with large UK retailers insisting on DDP terms, resulting in implications for the supplier
  • If importing to the UK for onward EU distribution, import VAT and duty may be payable twice
  • Is direct import into another EU Member State preferable and can this be done if not established in the EU
  • Is a local VAT registration, EORI, warehouse or local entity required and must fiscal representation be considered
  • When exporting, consider what the delivery terms will be in the EU Member State of destination and who is importer of record there
  • It is likely that distance selling from the UK will go and there will also be changes to Low Value Consignment Relief, meaning payment of import VAT and duty on most deliveries
  • If making B2C sales, is import VAT and duty factored into the advertised price and can a freight forwarder be used to clear the goods and pay all charges on behalf of the customer
  • Again, would an EU Member State presence be an advantage
  • Plan by mapping supply chains, estimating increases in import VAT, duty and administrative costs and review HMRC guidance, for example, the Border Operating Model (BOM)
  • HMRC grants are also available for training and IT

How might local indirect tax rules differ across the EU Member States following Brexit?

  • The BBC recently reported that, following a study, many UK businesses exporting to Europe, will need to set up a presence in the EU, however, how this is done and the level of representation required, may result in barriers to overcome
  • EU Member States have differing rules as to whether local VAT registrations and EORI numbers can be obtained if non-established
  • Fiscal representation may be required, potentially resulting in the requirement for guarantees or joint and several liability with a local forwarder
  • This may influence the country of choice when reviewing supply chains
  • Most EU countries allow a VAT registration and EORI without an establishment, Germany and Italy being notable exceptions, requiring EU establishment, which may also give rise to local direct and employment taxes
  • Whether a fiscal representative is required varies throughout the EU.  The Netherlands, Czech Republic, Malta and Germany do not require it, although Germany requires an EU establishment and use of a customs agent to facilitate imports
  • Use of an extended reverse charge for the import and onward supply of goods may be used in certain Member States, for example, France and Spain, without appointing a fiscal representative
  • Use of simplifications, such as warehousing and postponed import VAT accounting, may be used in the Netherlands, Belgium and Spain
  • There are also specific examples that may be of benefit.  Germany allows import into the Netherlands, without payment of Dutch import VAT, followed by onward dispatch and acquisition into a warehouse in Germany, using a German VAT number.  This avoids the need for a customs agent, since there is an intra-community delivery to Germany and no formal import into Germany

What indirect tax advantages make the proposed new Freeports appealing to businesses?

  • The latest Government paper on Freeports, was published on 7 October and intends to ‘turbo-charge post-Brexit trade’ by ‘creating jobs, driving investment and regenerating communities’
  • There will be a bidding process for sea, air and rail ports before the year end and the first Freeports are on track to open by end of 2021
  • The UK wide implementation of Freeports is planned to allow creation of Freeports in each of England, Wales, Scotland and Northern Ireland
  • There will be a package of tax reliefs to help drive jobs, growth and innovation
  • Specifically, there will be simplified customs procedures and duty suspension on goods
  • Freeports will allow hubs of enterprise to carry out business inside a land border, but with different customs rules applying
  • Freeport policy will create a flexible new customs model, improving on existing customs arrangements
  • Imports of goods into a freeport will be tariff free, processing can then be undertaken, followed by local sale, or tariff free export

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Intrastat 2021

In summary, Intrastat is here to stay for next year at least, for goods coming to the UK and Northern Ireland from the EU and goods going from Northern Ireland to the EU.  The current thresholds for arrivals (imports) of £1.5m and dispatches (exports) of £250K remain.  If you currently do not exceed the thresholds, but do during 2021, you will be required to submit Intrastat.

The reason Intrastat will continue in the short term, is that, due to the phased approach for submission of import declarations required to be made next year, there would potentially be a gap in UK trade statistics, where there is a delay in import declarations being made. 

Under the Northern Ireland Protocol, customs declarations are not required for trade between Northern Ireland and the EU and so, Intrastat will be required to be reported, for both arrivals and dispatches, for the life of the Northern Ireland Protocol, which will be at least four years.  There will be no requirement for Intrastat reporting for goods moving between Northern Ireland and Great Britain.

As it currently stands, Intrastat will not be required for UK arrivals from the EU, during 2022.  In addition, we are not aware of any guidance on VAT return reporting, in respect of these transactions, as yet.

Sean Turner

For further information contact Sean Turner:

DD: +44 (0)2074 651 908

VAT & Transport and Logistics Specialist

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