BREXIT – Preparation time is running out so act now
Please visit our Brexit News Page on this website for all the help.
You may also have seen and heard the government campaign to raise awareness among the business community using the strap line Check. Change. Go.
We should now be at the Change (November 2020) stage, but research suggests that many small businesses are still not ready for leaving the EU despite the campaign.
Over a third of small businesses are still not convinced that we will leave the EU at the end of December and with just 75 days to go this is deeply disturbing.
Whatever the outcomes of the current trade talks (and as I write this, one eye is on the news to see if the Prime Minister has decided to walk away from the talks altogether as both sides dig their heels in) you need to take action now.
In this publication we highlight all the areas that you need to investigate urgently if you import from the EU, export to the EU, travel to the EU, have EU employees and anyone of your team works in the EU.
There is a lot to do which will cost you more but there is some government help so don’t miss out, we have outlined the areas where you can get the extra help and how.
PREPARING FOR THE END OF THE TRANSITION PERIOD - 31st December 2020
The action your business needs to take now will depend on your circumstances but making sure your business is ready to export or import from/to the EU, for example by getting an EU EORI number or registering with the relevant Customs Authority is vital.
Have a look at our previous blog with links to where you can go for applying for EORI and other registrations https://www.myersclark.co.uk/brexit-news
THE BORDER WITH THE EUROPEAN UNION
The Government produced guidance in July 2020 outlining the implementation of Border controls in three stages for importing and exporting goods.
This document outlines the processes for moving goods between GB and the EU from 1 January 2021 onwards, including processes to be introduced in April 2021 and July 2021.
From January 2021: Traders importing standard goods will need to prepare for basic customs requirements, such as keeping records of imported goods. Traders will also need to consider how they account for and pay VAT on imported goods. Traders will then have up to six months to complete customs declarations. While tariffs will be payable where due on relevant goods, payments can be deferred until the customs declaration has been made.
From April 2021: All products of animal origin (POAO) and all regulated plants and plant products will require pre-notification and the relevant health documentation. Any physical checks will continue to be conducted at the point of destination until July 2021.
From July 2021: Traders moving any goods will have to make full customs declarations at the point of importation and pay relevant tariffs. Full Safety and Security declarations will be required.
The EU has said it will not replicate the UK’s phased plan, so declarations will be needed for exports from 1 January 2021.
Exporters can use the new ‘Check duties and customs procedures for exporting goods’ tool on gov.uk to identify what additional paperwork, tariffs and quotas are applicable. https://www.gov.uk/check-duties-customs-exporting
Businesses can also apply to HMRC for an advance ruling on the commodity code that should be used for their goods and the origin of their goods.
UK TARIFFS FROM 1 January 2021
From 1 January 2021, the UK will apply a UK-specific tariff to imported goods.
This UK Global Tariff (UKGT) will replace the EU’s Common External Tariff, which applies until 31 December 2020.
The UKGT will apply to all goods imported into the UK unless:
An exception applies, such as a relief or tariff suspension
the goods come from countries that are part of the Generalised Scheme of Preferences
the country you are importing from has a trade agreement with the UK
It only shows the tariffs that will be applied to goods at the border when they are imported into the UK.
It does not cover:
- other import duties, such as VAT
the precise details of trade remedy measures, such as anti-dumping, countervailing and safeguards
VAT will be levied on consignments of EU goods exceeding £135 in value following the same rates and structures as are applied for the rest of the world imports. However, you will be able to use the postponed VAT accounting rules
Separate rules also apply to goods valued less than £135.
Full details are provided in the following government link
Moving goods between Great Britain and Northern Ireland
If you move goods between Great Britain and Northern Ireland, the Trader Support Service will guide you through any changes due to the implementation of the Northern Ireland Protocol.
The Northern Ireland Protocol comes into force on 1 January 2021. There will be changes to the way goods move between Great Britain and Northern Ireland.
The Trader Support Service will be useful to you if any of the following applies:
will help if you move goods between Great Britain and Northern Ireland, or bring goods into Northern Ireland from outside the UK
is free to use and will guide you through any changes to the way goods move between Great Britain and Northern Ireland
can complete declarations on your behalf
GOVERNMENT GRANT FOR CUSTOMS TRAINING FUNDING
HMRC have extended the deadline for customs training funding. Applications are open until 30 June 2021 (or until all funding is allocated).
The funding can be used towards helping businesses train staff in making customs declarations.
The funding is open to businesses that are established in or have a branch in the UK when the grant is paid to you, and for those that have not previously failed to meet tax obligations.
To apply for the grants, your business must either complete customs declarations for yourself or someone else (or intend to in the future) and you must import from or export to the EU.
The grant will give you up to 100% of the cost of training for your employees, up to a limit of £1,500 per trainee.
OTHER GRANTS IF YOUR BUSINESS COMPLETES CUSTOMS DECLARATIONS
If your business completes customs declarations, you can apply for 3 grants. This is to assist you with completing customs declarations for recruitment, training and IT improvements.
You can apply to get funding for:
- training that helps your business to complete customs declarations and processes (see above)
hiring new staff to help your business complete customs declarations
IT improvements to help your business complete customs declarations more efficiently
Your business must:
- have been established in the UK for at least 12 months before the submission of your application and when the grant is paid
not have previously failed to meet its tax obligations
In addition, your businesses must meet one of the descriptions below:
- complete or intend to complete customs declarations on behalf of your clients
be an importer or exporter and complete or intend to complete declarations internally for your own goods
be an organisation which recruits, trains and places apprentices in businesses to undertake customs declarations.
PREPPING FOR CUSTOMS DECLARATIONS
Importers and exporters will need to complete customs declarations next year, regardless of whether the UK agrees a free trade deal with the EU.
To complete declarations you will need to:
Have a GB economic Operator Registration and Identification number (EORI number)
Decide if you will use a customs intermediary
If you choose to complete the Customs declarations yourself you will need to:
- Have access to the relevant IT systems to complete declarations
Know the customs value and commodity code for goods traded
Consider simplifications and facilitations such as customs freight simplified procedures (CFSPs), warehousing, inward processing, and transit
Have a look at our previous blog. https://www.myersclark.co.uk/brexit-news
TRAVELLING TO THE EU
From 1st January next year travelling to the EU, Switzerland, Norway, Iceland or Liechtenstein will change.
European trips will need more planning and the Government has outlined things you may need to do before you travel to include:
- check your passport is current (you need it to be valid for six months from point of travel)
- get comprehensive travel insurance so it covers health care
- check you have the right driving documents
WORKING IN EUROPE
From 1st January next year if you are an employer who sends employees to working in the EU, Switzerland, Norway, Iceland or Liechtenstein, or employ staff from one of these countries the following steps will need to be taken:
Employees starting work in the EU, Switzerland, Norway, Iceland or Liechtenstein
If starting work in the above countries before 1st January, apply for a Portable Document A1 (PDA1) or E101 certificate for the period before 1st January.
If starting work after 1st January apply for a Portable Document A1 (PDA1) or E101 certificate for the period after 1st January
Employees starting work in the UK from the EU, Switzerland, Norway, Iceland or Liechtenstein
If you employ someone from one of the above countries and they work in multiple places, they should have a PDA1 which should mean that there is no National Insurance (NIC) to pay for the period stated on the PDA1. This normally applies if they work for you and someone else. But you do not need a PDA1 if the employee only works for you in which case normal NIC will be payable.
If the employee already works for you and they have not applied for a settled or pre-settled status, they should consider registering now.
For periods after 1st January workers will need to comply with the Immigration regulations and will need to apply through the UK’s points-based immigration system.
The above rules do not apply to the Republic of Ireland.
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