Brexit and Small Business

Monday August 26, 2019

With the UK still hovering with one foot out of the EU’s door, the government’s put out some guidance to help businesses prepare for life after Brexit. What that life will be like is still very much up in the air right now, but the smart move is to prepare for the dreaded “no-deal scenario” even if you’re hoping for something better.

As things stand, unless other arrangements come together late in the game, the UK’s set to “crash out” of the European Union on the 31st of October with no deal. The moment that happens, things change in a heartbeat for UK businesses that deal with the EU. With no transition period, we’ll all suddenly be playing by World Trade Organisation (WTO) rules. In practice, that’ll mean a much tighter set of regulations and an end to the basically unrestricted flow of everything from the products and services we sell to the workers and capital we rely on. Here are the main nuts and bolts of this to understand:

  • For one thing, UK businesses are going to need to start applying the customs, excise and VAT rules to the goods they’re selling in the EU. All the regulation about these that apply when you’re selling to non-EU countries will now apply in the EU as well.
  • On top of that, your EU trading partners are going to have to play by the same rules when dealing with you. All the customs, excise and VAT processes that they’re hit with when trading outside the EU will now apply when they trade with you as well.

If you already trade with non-EU countries, you should already have a UK Economic Operator Registration and Identification (EORI) number. If you haven’t got one, you’ll need one to carry on trading with the EU. HMRC’s been issuing them automatically, but with time getting short it might be wiser to apply directly rather than waiting for them to get round to you. We’ve already written to over 88,000 VAT-registered businesses to let them know the UK EORI number they’ve been assigned. If your business isn’t VAT-registered, you won’t get an automatic EORI, so you’ll definitely need to apply.

You’ll also need to make arrangements for handling customs declarations (which might involve learning new skills and getting your head around new software) and check the official advice on how your international trade will change in the event of a no-deal Brexit.

You can make things a bit easier by applying for Transitional Simplified Procedures for your imports, which gives you a little breathing space on filing your customs paperwork. If you’re selling to the EU, you’ll need to check your couriers, hauliers and so on to make sure they’re all set up. As for your customers, they’ll have to be prepared for the new system too – the rules for which will vary from country to country.

You can grab a copy of HMRC’s Brexit checklist here, and it’s a really good idea to get a jump on this now before the rule changes start to bite after Halloween. There’s also a step-by-step guide to preparing for Brexit here, which is well worth a look.

So, while we all hold our collective Brexit-breath, get your business prepared, grab a copy of that checklist and listen out for more Voices from the RIFT…

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