Post Brexit rules for companies: What has changed for businesses trading with the EU?

Author
Zoe Bagnall
Content and PR Executive | Business West
7th January 2021

The UK left the EU on December 31st, meaning trade with Europe has changed in several ways. Businesses are having to adapt to the new rules and regulations during an already difficult economic period triggered by the COVID-19 pandemic. So, what do firms need to do differently now?

Customs Declarations 

One of the biggest changes is the need for businesses to complete customs declarations when exporting or importing goods to and from the EU. When trading with the EU, companies can register their interest in ChamberCustoms, a service run by Business West which takes care of customs declarations for you, removing the hassle and ensuring customs clearance is accurate and timely to avoid delays and extra costs at the border.

Preferential Rules of Origin 

While the UK was in the EU’s Customs Union, businesses were not required to demonstrate the origin of goods traded. Now, you must certify that your goods qualify for preferential origin status to avoid tariffs. 

Companies will have a year to obtain documentation from their suppliers, allowing them to adapt to the new trading regulations. The government has however said that companies should ensure that their goods meet origin rules before claiming that they’re eligible for zero tariffs. After the 12-month grace period you could be asked to produce these documents as part of compliance activity. 

Rules of Origin apply to all goods, whether they are covered by preference agreements, the Generalised Scheme of Preferences, or are non-preferential. 

You can find out the specific rules of origin available for your goods by checking the:

Preference agreements for the country you are trading with

Generalised Scheme of Preferences

For non-preferential goods, you will need to check if they need to follow specific Rules of Origin.

VAT

Value Added Tax (VAT) is a tax on consumption of goods and services. When the UK was in the EU, VAT was not usually charged on the supply of goods. Instead, buyers were generally required to charge the business VAT which is accounted for on the VAT return. 

Because the UK is now a third country, sellers will not charge VAT, but buyers will have to pay VAT to HMRC when importing goods. 

Due to concerns surrounding cash flow and potential delays, the UK government has introduced postponed accounting to mitigate this. This allows you to defer paying VAT upon importation of goods. Instead, your import VAT will be paid on your usual VAT return. You can check if you are able to apply for this here

ATA Carnets

ATA Carnets were not previously required when trading with the EU, however firms transporting goods temporarily into EU countries or transferring them through the EU to non-EU or third countries, will need to produce an ATA Carnet In order for goods to move duty free. You can check which countries accept ATA Carnets here. 

At Business West, our International Trade team provide a bespoke service including simplification of customs procedures and completion of all Carnet vouchers. Find out more here

New licenses and regulations

There are now certificates and special licenses you will need if you are exporting specific products. For example, if you are exporting live animals you will need an export health certificate and if you are exporting controlled drugs, you need a Home Office controlled drug license. For more information about the different licenses and certificates required visit www.gov.uk/exportgoods

How your business can prepare to trade with the EU

While businesses are now faced with uncertainty regarding their future due to both the pandemic and new trade rules, there are ways companies can prepare to ensure trade with EU partners is as frictionless as possible. We are regularly updating our Trading Through Brexit hub, which offers a pool of resources and information to get you up to speed with the new rules. 

  • Trading Through Brexit

    Access information directory & vital services to help businesses most impacted by Brexit, including Customs Declarations.

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