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Brexit’s impact on SME’s and what to be aware of in the coming months

The UK is now host to a full external border with the EU as a sovereign nation, this may have been all you expected from Brexit but it is only the start of all the changes to the relationships terms that need to be straightened out.

The Brexit deal was decided and then shortly after lockdown and restrictions came into play with the introduction of Coronavirus. Small businesses being the backbone of the economy, it seems as though they have been hit the hardest.

There are a lot of legislation changes that are expected, some already determined but many still to be confirmed far into the future. Staying on top of it all is a key way to control your business when navigating in such uncertain times.

Understanding the rules of origin and tariffs

There will be no tariffs or quotas on the movement of good between the UK and the EU, however it is important that the goods, that are being moved between, comply with ‘rules of origin’. These documents allow customs authorities to identify where an export has come from and determine what licenses and duties are necessary to allow them to enter the country.

Your business may need to provide paperwork which shows where your goods were and where the components of your products came from originally, all to determine whether they are subject to tariffs.

Know your EROI number and commodity codes

Large scale changes like these can be inconvenient and as a businessperson you may already have a lot of future alterations that you need to be aware, it is important to keep track of all changes and new codes as they can make keeping up to date much easier long term.

For trading with the EU you need to Keeping a track of your EORI number (the code starting with GB) that enables you to import goods into England, wales or Scotland. This can be easily accessed if you can’t find your EORI number.

Businesses must also provide ‘Commodity Code’ when trading with the EU otherwise you’re at risk of fines or penalties.

If your business trades with Northern Ireland, then your EORI number will begin with XI and you need to trade with TSS Trader Support Service.

Employee welfare

As of June 30th 2021, EU Citizens no longer automatically eligible to work in the UK. It is important to consistently make checks with your employees to determine whether they need to apply for a working, settled status.

As well as this, how qualifications are translated within the EU and UK will also change. Individual UK bodies will be relied on to negotiate recognition agreements to qualify them as valid in other EU member states. This may be a problem in situations consisting of a qualified professional moving abroad for a job.

Changing VAT

Getting your VAT in order may be a complicated task, businesses are now required to pay VAT at the point of sale instead of the point of importation, affecting different products differently. You can use the governments ‘Brexit Checker’ website to help assist you in understanding how the new rules apply to you.

It is also possible for you to postpone your VAT accounting, this allows you to defer paying so you can pay imports on a normal VAT return.

Alternatively, by applying for a Duty Deferment Account, you would be able to pay import duty, as well as some other duties, once a month opposed to every time you import.

It can be beneficial for you to keep track of these changes and how they affect your business by hiring an accountant. Fusions team of professional accountants find solutions to problems keeping your business a priority and following new changes to restrictions and legislation.

Dates for you to be aware of

March: Agreements on data sharing and financial services should be made – with a grace period of three months for certain suppliers/retailers.

April: new movement of goods rules to come into force for products of animal origin.

June: The EU Settlement Scheme deadline for registration is 30 June 2021.

July: New border controls come into force.

July: End of the UK Border Operating Model and customs declarations will become permanent, with additional admin required.

July: If a deal on data sharing is not reached by 1 July, the UK will be considered a third country for personal data transfers. This will create new legal requirements.

 

Are you up to speed on all changes required to ensure you continue to operate and trade robustly?

Fusion Consulting can help.

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