January 26, 2021
A combination of ‘Britain’ and ‘Exit’, Brexit is the withdrawal of the United Kingdom from the European Union and the European Atomic Energy Community. After much back and forth, this became official on the 31st of January 2020, with most of the changes coming into full effect on the 31st of December 2020. Although Brexit impacts everybody living in the UK, businesses face the particular challenge of adjusting to changes in free trade in both goods and services, as well as the free movement of employees. With only a short transition period, many business owners won’t have much time to prepare. To that effect, we have outlined important changes that you need to be aware of as a business owner, and how you can restrategise to accommodate this new change faster.
If your company deals with the trading or movement of goods between the UK and EU, the change in Free Trade Agreements will affect your business. Before Brexit, business transactions between the UK and EU were previously not subject to tariffs and customs import processes. After the 31st of December 2020, all goods moved between the two regions will now have to be declared at customs (unsure of the meaning of “at comes”. Is it perhaps “at customs”?) and may be subject to pay duty. As trade will be subject to new trade agreements, there will also be significant impact on goods being returned to the UK or EU due to changes in customs and duty payments.
Before Brexit, there were no customs borders between the EU states which meant goods and people could move freely between the states. Post-Brexit, moving goods between Great Britain and the European Union will change, as well as moving goods throughout EU countries for another country. Business owners in Northern Ireland won’t experience as many interruptions as the customs and VAT procedures will remain the same when moving goods between Great Britain and Northern Ireland. Essentially, many companies in Great Britain will be officially considered international importers and exporters following the end of the transition period. EU companies that export to Great Britain, such as your suppliers, will also be regarded as international traders.
Exporting goods from the UK to non-EU countries from the 1st of January 2021 will also be subject to new trade agreements. Business owners will need to ensure that all product testing, certification, and overall compliance are aligned to the new arrangements as stipulated by the UK government. Any goods that are sold in the UK that require a CE mark will need to be replaced with the UKCA mark. However, stores in England, Scotland and Wales can still use the CE mark and will be given a grace period till the 1st of January 2022 to ensure that they meet the new EU, requirements which will be the same as the UK.
Potential employees’ right to work will still need to be verified until the 30th of June 2021. EU, EEA or Swiss citizens can use their passport or national identity card when applying for jobs outside of their regions. Non-EU, EEA or Swiss citizens’ family members will need to produce their immigration status. To avoid discrimination against EU, EEA, or Swiss citizens, the EU Settlement Scheme states that employers are not permitted to ask these citizens to produce their status until after the 30th of June 2021.
While the main aim of the transition period has been to ease into the new structure with minimal interruptions, Brexit still brings a risk of increased disruptions to the supply chain procedure that businesses need to be prepared for. To reduce the impact of cost hikes and delays, businesses that buy and sell goods need to be prepared to be impacted. With regulations at ports and border crossings, the potential tariffs and changes may delay shipments as well as increase administrative tasks. To counter this, businesses will need to partner with professional logistics companies to be able to manage the change.
The most important thing to do to manage the multiple changes, especially when it comes to complexities around customs. We are here to help you manage it all. Get in touch with us today.
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