100 days on: Brexit still challenging traders, but Support Fund offers hope

Despite 100 days passing since the end of the Brexit transition period, official figures reveal that international trade has yet to recover.

But why?

In this blog, we’re going to explore what challenges businesses are facing, and how they can overcome them.

How is international trade faring?

According to the British Chambers of Commerce (BCC), four in 10 (41 per cent) exporters reported “decreased export sales” in the first three months of 2021, compared to just two in 10 (20 per cent) who reported “increased export sales”.

These figures remain largely consistent across each sector, including the important production, manufacturing, and construction industries.

Likewise, the Office for National Statistics (ONS) suggests that international trade has yet to return to pre-pandemic levels, with January recording historically low trading activity.

What are the key challenges?

Research shows that most small businesses who traded internationally before Brexit did so only with the EU. It means that few were prepared for the new rules and processes already in place for the rest of the world – and now also the EU.

For example, if a new business were to start trading with the EU today, it would need to understand how tariffs and the rules of origin work, how to register for an Economic Operators Registration and Identification (EORI) number, how import and export taxes work, how to register for VAT in a different country, how to certify certain goods (such as animal products), and how the Northern Ireland trade agreement operates.

What is the solution?

Without specialist advice and support, international trade can seem daunting to newcomers. Fortunately, there is help out there to support businesses who wish to sell their goods and services overseas.

This includes the new SME Brexit Support Fund. Under the £20 million scheme, businesses can claim up to £2,000 in grant funding to spend on professional advice – including accountant’s fees!

The cash can be spent on advice relating to a range of topics, including all of those mentioned above.

Get expert advice today

For help and advice with related matters, please get in touch with our expert Brexit advisory team today.

Applications open for £2,000 post-Brexit import VAT advice

Applications are now open for the Government’s SME Brexit Support Fund, which offers grants for up to £2,000 that can be put towards the cost of professional advice on import VAT.

The end of the Brexit Transition period has changed the way businesses must account for VAT when importing from the EU and the new fund offers help to access advice on staying compliant following the changes.

Businesses are eligible for the fund if they:

  • have been established in the UK for at least 12 months before submitting an application or currently hold Authorised Economic Operator status;
  • have not failed to meet tax or customs obligations in the past;
  • have no more than 500 employees;
  • have turnover of no more than £100 million; and
  • import or export goods between Great Britain and the EU or between Great Britain and Northern Ireland.

They must also meet one of the following conditions:

  • Complete (or intend to complete) import or export declarations for their own goods; or
  • Use someone else to complete import or export declarations but need additional capability to effectively import or export.

To apply, you will need to provide a quote for the proposed professional advice, the business name and address of your chosen professional advisor and details of the advice you wish to obtain.

Applications are open here.

The deadline for making an application is 30 June 2021 but could be earlier if all £20 million of available funding is allocated before then, so it is advisable to apply as soon as possible.

Please contact us today for a quote and details of the professional advice we can provide.

An introduction to the UK’s points-based immigration system

On 1 January 2021, the UK launched a new, points-based style immigration system to bring EU immigration into line with the rest of the world.

If you are an employer, here’s what you need to know about the new immigration regime and how you can recruit talent from overseas.

What is a points-based immigration system?

The new regime ends freedom of movement between the EU and the UK and introduces a new Australian-style ‘points-based’ system.

Under this regime, anyone coming to the UK for work purposes – no matter where they are from – must meet a specific set of requirements for which they will score points. Work visas are awarded to those who score enough points.

How are points scored?

Anyone coming to the country under the ‘skilled worker route’ must demonstrate that they have a job offer from a Home Office licensed sponsor (more on that later), which is at the required skill level or above.

The job offer must also meet the applicable minimum salary threshold (currently, the higher of either the general salary threshold of £25,600, or the specific salary requirement for their occupation, known as the ‘going rate’).

Should the applicant not meet the salary threshold, they can “trade characteristics” to score additional points. This may include a job offer in a specific shortage occupation, a PhD relevant to the job, or a PhD in a STEM subject relevant to the job.

Applicants must also speak English to the required standard.

The full list of characteristics and awarded points can be found here.

What you need to do as an employer

Employers must have a sponsor licence to hire workers from outside the UK. Without one, they may be breaking the law.

The standard processing time is around eight weeks, so you should prepare your application well ahead of recruitment.

You can learn more about the application process and eligibility criteria here. To apply to become a sponsor, click here.

Get expert advice today

For help and advice on related matters, please get in touch with our expert Brexit advisory team today.

Do I need to set up an EU subsidiary?

“Should I set up a company in the EU” is among the most common questions we receive now that the UK has left the single market.

However, the answer isn’t always as straightforward as yes or no. There are both advantages and disadvantages to registering a company in the EU.

What is an EU subsidiary?

An EU subsidiary is a company belonging to you, but registered in the EU for VAT and customs purposes. You usually only need one EU subsidiary, but there is no limit to the number you can set up.

Why should you set up an EU subsidiary?

If you commonly move goods across the EU, an EU subsidiary may help you bypass new customs processes established after the UK left the EU earlier this year.

This is because an EU subsidiary is considered a European company and is, therefore, assumed to follow EU rules and regulations when manufacturing or trading products. This means less paperwork for you.

Do note, however, that goods moved between the UK and the EU (including Northern Ireland) are still subject to the new customs processes, regardless of whether you have an EU subsidiary or not.

Why shouldn’t you set up an EU subsidiary?

Setting up an EU subsidiary is costly. You may have to pay for new headquarters and staff and take on additional administrative duties.

That said, the benefits of doing so may outweigh the time and financial investment.

How do I set up an EU subsidiary?

To set up a new company, you will need to acquire a registered address in the EU country of your choosing and create a company with the local business department

Get expert advice today

For help and advice on related matters, please get in touch with our team today.

Should I register for VAT in the EU?

If you wish to trade with the EU following the end of the Brexit transition period, you may need to register for VAT in the single market.

In this article, we will explain how and why you need to do so.

Why should I register for VAT in the EU?

If you are planning to trade in the single market, you may need to register for VAT in the EU. Doing so will help you avoid financial penalties, build your business profile within the EU, and allow you to apply for VAT refunds.

Here are just a few scenarios where VAT registration may be required:

  • If your UK company is buying and selling goods in an EU country
  • If your UK company is importing goods into an EU country
  • If your UK company is holding goods in warehouses in EU countries for customers
  • If your UK company is hosting a live conference, exhibition or training in the EU
  • If your UK company is selling goods over the internet or through catalogues to EU customers

VAT and digital services

If your business supplies digital services to consumers in the EU, you must register with the VAT Mini One Stop Shop (MOSS) in any EU country, or for VAT in each country where you’re supplying digital services.

If you are registering for the VAT MOSS, you must do so by the 10th day of the month after your first sale to an EU customer.

How do I register for VAT in the EU?

The process for registering for VAT in the EU is will vary from country to country. For most registrations, you will need to have your company information and VAT details handy, and possibly proof of planned trade, such as contracts and invoices.

The submission process usually takes between two to eight weeks, so registration should be planned well in advance of any planned transactions.

You can find out how to register for VAT in each EU member state by visiting the European Commission help page.

Get expert advice today

For help and advice registering for VAT in the EU, get in touch with our team today.

What is an EORI number and how do I get one?

If you move goods between Great Britain and the EU, you must get an Economic Operators Registration and Identification (EORI) number.

But what is an EORI number and what is it used for?

In this blog, we’ll explain everything you need to know about EORI numbers and how to register.

What is an EORI number?

An EORI number is part of a shared code used across Europe to identify a business. It is made up of two components: the country code of the issuing state, as well as a number that is unique to that state.

For example, a business based in Great Britain will begin with the code ’GB’, followed by a 12-digit number.

Who needs an EORI number?

Any business that seeks to move goods to or from the ‘single market’ must register for an EORI number.

This also includes businesses moving goods between Great Britain and Northern Ireland (NI) as part of the EU withdrawal agreement.

What is an EORI number used for?

The code is used to identify your business for tax and customs purposes. Without one, you cannot complete customs declarations (even if you have someone deal with customs for you), use customs systems such as the Customs Handling of Import and Export Freight (CHIEF) system and the Import Control System Northern Ireland (ICS NI), or apply for a customs decision.

If your business moves goods to or from NI, you may also have to apply for a secondary EORI number (starting with XI).

In special circumstances, you may also need to register for an EORI number in the Member State you are trading with or if you are applying for a customs decision in that state (except if you already have an EORI number starting with XI).

How can I register for an EORI number?

To register for an EORI number starting with GB, click here.

For any other Member State, please visit their national customs domain. A full list of domains can be found here.

Get expert advice

For help and advice with related matters, please get in touch with our expert Brexit advisory team today.

Just months left to secure right to work under EU Settlement Scheme, businesses warned

There are now just two months left to apply to the EU Settlement Scheme to secure the right to live and work in the UK, businesses have been warned.

The report comes shortly before the 30 June 2021 deadline, after which workers may be forced to return to their home countries should they not apply in time.

Under the scheme, EU, European Economic Area (EEA), and Swiss citizens who lived in the UK before the end of the transition period will be offered permanent residence – providing they meet the criteria to stay.

The application process is free, but applicants must demonstrate that they are in the UK as a worker, student, or “self-sufficient person”, as well as provide a form of official ID and their National Insurance (NI) number if they have one.

If a worker has lived in the UK for longer than five years, they may apply for “settled status”, while those who have lived in the UK for less than five years can only apply for “pre-settled status”.

If you are an employer, you should ensure that your European workers have applied and have been awarded settled or pre-settled status by 30 June, or risk breaking the law.

You should encourage your employees to apply as soon as possible to avoid uncertainty and offer assistance where possible. However, you cannot insist that they apply and cannot insist on receiving proof of status until after the deadline.

A new digital system will be launched after 30 June 2021 to enable employers to check proof of status.

Commenting on the scheme, Minister for Future Borders and Immigration Kevin Foster said: “My message to European citizens and their family members is simple – apply now and join the millions who have already been through the simple process to secure their status.

“There is plenty of support available and the new funding announced today means no stone will be left unturned in ensuring everyone gets the help they need.”

According to the latest statistics, the EU Settlement Scheme has now received over five million applications, but millions more workers are yet to apply.

To learn more about the EU Settlement Scheme, please click here.

For help and advice with related matters, please get in touch with our expert Brexit advisory team today.

Post-Brexit timetable: the key dates you need to know about

While the UK officially left the European Union on 1 January 2021, the planning and preparations do not stop there.

Ahead of the new tax year, we look at the key dates and rule changes your business needs to know about.

March 2021: the Brexit Recovery Fund opens for applications

Launching this week, the Brexit Recovery Fund enables businesses who trade with the EU to access up to £2,000 in grant funding to cover the costs of specialist training and professional advice (including accountant’s fees), to help them adapt to new customs and tax processes, such as rules of origin and VAT.

To apply, your business must move goods between Great Britain and the EU or Northern Ireland; be established in the UK for at least 12 months or currently hold Authorised Economic Operator status; have no more than 500 employees and turnover no more than £100 million; and have not previously failed to meet its tax or customs obligations.

1 October 2021: animal product rules come into force

  • Pre-notification requirements for Products of Animal Origin (POAO), certain animal by-products (ABP), and High Risk Food Not Of Animal Origin (HRFNAO) will come into effect from 1 October 2021
  • Export Health Certificate requirements for POAO and certain ABP will come into force on the same date.

January 2022: full border control processes come into force

In response to the coronavirus pandemic, the Government has now pushed back the introduction of full border control processes until 1 January 2022 – six months later than planned.

  • While customs import declarations will still be required, the option to use the deferred declaration scheme – including submitting supplementary declarations up to six months after the goods have been imported – will be available until the end of the year
  • Safety and Security Declarations for imports will also not be required until 01 January 2022, while physical SPS checks for POAO, certain ABP, and HRFNAO will not be required until the same date
  • Physical SPS checks on high-risk plants will take place at Border Control Posts, rather than at the place of destination as now, from 1 January 2022
  • Pre-notification requirements and documentary checks, including phytosanitary certificates will be required for low risk plants and plant products, and will be introduced from 1 January 2022.

March 2022: Border control checks on live animals

  • Checks at Border Control Posts will take place on live animals and low risk plants and plant products.

For help and advice with related matters, please get in touch with our expert team today.

SME Brexit Support Fund goes live

The Government has now launched its £20 million SME Brexit Support Fund – apply today!

The SME Brexit Support Fund has been designed to help SMEs with the new rules that apply to trading with the EU following the end of the Brexit transition period.

The fund offers grants worth up to £2,000 to enable businesses who trade only with the EU to access training and professional advice to ensure they can continue trading with minimal disruption.

This includes training on:

  • How to complete customs declarations
  • How to manage customs processes and use customs software and systems
  • Specific import and export related issues, including VAT, excise and rules of origin.

Additionally, the grant can be put towards professional advice relating to meeting customs, excise, import VAT and safety and security declaration requirements.

Businesses are eligible for the fund if they:

  • Have been established in the UK for at least 12 months before submitting an application or currently hold Authorised Economic Operator status;
  • Have not failed to meet tax or customs obligations in the past;
  • Have no more than 500 employees;
  • Have turnover of no more than £100 million; and
  • Import or export goods between Great Britain and the EU or between Great Britain and Northern Ireland.

They must also meet one of the following conditions:

  • Complete (or intend to complete) import or export declarations for their own goods; or
  • Use someone else to complete import or export declarations but need additional capability to effectively import or export.

To apply for this funding, businesses must complete their submission by 30 June 2021 at the latest, although the Government has confirmed that this scheme may close early if the allocated funding is fully utilised sooner.

Click here to apply for the SME Brexit Support Fund

Businesses have been given longer to prepare for changes to customs after the Government set out a new timetable for introducing import border control processes to enable UK businesses to focus on their recovery.

Full import border control processes will now be introduced on 1 January 2022 instead of 1 July 2021 – six months later than originally planned.

We highly recommend that you use this fund to prepare your businesses for the changes ahead, including making use of our Brexit services so that you can continue to trade unhindered.

To find out more about our dedicated post-Brexit advice and support, please contact us.

Reporting under DAC 6 required for “limited time” as HMRC transitions to international disclosure rules

HM Revenue & Customs (HMRC) has confirmed that the UK will replace the European Union cross-border tax arrangement rules “as soon as practicable”, but some aspects will continue to be enforced for a “limited time”.

In an update to agents, the regulator said it will consult on and implement the Organisation for Economic Co-operation and Development’s (OECD) mandatory disclosure rules as the UK transitions to international laws.

The announcement means that businesses will be required to continue to partially report under European disclosure laws, known as DAC 6 (Directive 2018/822).

Introduced last year, DAC 6 is an EU-wide mandatory disclosure regime that imposes mandatory reporting of cross-border tax arrangements. Reporting is required by law when at least one EU business is involved in an arrangement that falls into one of several categories, known as “hallmarks”.

According to HMRC, taxpayers and their advisers will still be required to report arrangements that meet hallmarks under “category D” for a “limited time”. These include:

  • arrangements which may have the effect of undermining reporting obligations concerning the automatic exchange of information; and
  • arrangements which obscure beneficial ownership.

Commenting on the report, HMRC said: “Following the end of the EU transition period the UK will move to global tax standards rather than EU ones (like DAC 6).

“Reporting under DAC 6 will still be required for a limited time until mandatory disclosure rules are implemented. However, reporting will only be required for arrangements which meet hallmarks under category D. This is in line with the Free Trade Agreement with the EU.”

For help and advice with related matters, please get in touch with our expert Brexit advisory team today.