- Brexit: Are you prepared?
With the Brexit transition period now finally coming to an end, there will be new rules in place as of January 1st 2021 for businesses and individuals. While details are still left to be decided, as a business and individual there are some things you need to be looking out for to ensure you are well prepared for whatever the circumstances bring.
With the pandemic showing no signs of easing, Brexit planning appears to be the least on the business agendas. Whatever the outcome may be, there are a few steps you can take to prepare yourself and your business, if you haven’t already.
- Taxes: Get ahead of them ASAP!
Firms trading with EU report their imports and exports every quarter currently, and VAT is calculated afterwards. Consequently, in absence of clear facilitations, firms can end up having to pay VAT upfront during cross-border transaction.
The official guidance on business VAT indicated that postponed accounting will be practiced. As of 1 January 2021, if your business is registered for VAT in the UK, you’ll declare and recover import VAT on the same VAT Return, rather than having to pay it upfront and recover it later.
The normal rules about what VAT can be reclaimed as input tax will apply. The main ‘place of supply’ rules will also remain unaffected for UK businesses.
It is a good time to talk to your accountant rather than trying to navigate the tax changes yourself. They are best equipped to help you stay up to date on the legislation changes.
New trade rules
Duties payable on traded goods heavily influence the cost of buying and supply of the goods traded internationally. It becomes difficult to pin cash and price, evaluate contracts, and make long-term investment decisions without clear tariffs and duties.
Market Access Database and TARIC can serve as EU databases to look up EU third country tariffs. The current tariffs will apply to UK imports after the end of the transition period.
Business owners will need to monitor legislation changes closely and prepare for potential disruption in January. Using an accountant to help with scenario planning and manage cash flow will prove invaluable.
Protect your employees
Process of employed skilled migrant workers and guidance on immigrant workers has not yet been finalised. EU Settlement Scheme’s toolkits and partnership packs are a good place to start your review in the meanwhile.
EU citizens resident in the UK can stay and apply for Settled Status up until 30 June 2021, according to official guidance currently. Employers need to keep an eye out for UK new immigration rules once it exits from the EU is completed.
In case of business travel, there is some official guidance provided on the matter on how to prepare for it, including restrictions and regular updates
Where to go for more help?
Government’s Get Ready for Brexit Checker is a good place to start. It offers more specific next steps depending on your business. As legislation is still uncertain in key areas, we recommend you sign up to the government Brexit updates. British Chambers of Commerce, Enterprise Nation and Federation for Small Business also have helpful Brexit resources.
You can also check out our Brexit Hub for government and product updates for small businesses.
