In principle, little will change before the end of this year, with the EU regulations remaining in force. The purpose of the transition period is so that the UK and EU can agree on a new trade agreement. Whether the deadline will be reached – no extensions are possible – remains to be seen. But deal or no deal, as a Belgian company it is best to be prepared for new rules for trading with the United Kingdom as of 1 January 2021.
Customs and taxation
- Apply for an EORI (Economic Operator Registration and Identification) number. Once the UK is no longer a member state and you wish to import into or export goods from the EU, an EORI number will be compulsory.
- Draw up a list of the CN codes of the goods you buy or sell. You are required to state these codes on import and export documents and the import duties are dictated by them.
- If you import goods from the UK regularly, it may be a good idea to apply for a VAT deferment licence for imports (an ET 14000 licence).
- Goods subject to excise duties can no longer be shipped between the UK and EU member states under the EMCS (Excise Movement and Control System).
- Ensure you know the origin in respect of customs of all the products you sell to the UK.
- Find out the Incoterm under which you sell to British buyers and amend your offers now. You should also take additional costs into account in advance, such as export and import formalities and customs duties.
- If you have buyers in the UK, amend the VAT processing system for your online shop.
- Perform the necessary analyses in respect of customs and VAT. This includes matters such as deliveries that include installation or assembly, sales from UK-based call-off stock, purchases on consignment from a British supplier, cross-border contract work transactions and triangular traffic (ABC transactions).
- If you paid UK VAT that you can claim back under the VAT refund directive, then be sure to do so in 2020, as the directive will no longer apply in the event of a no-deal Brexit.
A changed market
- Chart the market sentiment and, where necessary, consider new markets.
- Prepare for large orders this year, and if necessary make sure you have buffer stock.
- Evaluate the impact of the payable customs duties upon the marketability of your products.
- Check out the impact on your billing. For example, your transporter's VAT regime will be different when shipping to or within the UK.
- Evaluate whether it is still a good idea to invoice using the British pound. In the event of a no-deal there could be major exchange rate fluctuations.
- Accountants and IT specialists will have their hands full dealing with all the changes. Ensure you have sufficient capacity and it may be good idea to not schedule any other large projects.
- Be aware that companies that sell digital services to individuals in the UK can no longer declare their turnover using the MOSS (Mini One Stop Shop) scheme.
The above list serves merely to provide some idea of what is to follow, and we recommend that you chart out the consequences of Brexit for your specific field so that you can create a tailored plan. We'll be happy to lend a hand. Please don't hesitate to get in touch.