Call 01383 631 630

Specialist accounts and tax services for Consultants, Trades Professionals & Creative Companies

15 ways Brexit will impact businesses based in the UK

By 14th December 2020

31 December 2020 marks the end of the Brexit transition period. Yet the shape of our future relationship with our largest single export market remains unclear… at least for a few more days.

What we do know now is that from 1 January 2021 changes in how we do business will impact almost everyone. If you haven’t started already, you must ask yourself some key questions immediately, or your business will be held back.

Undertake your Brexit impact assessment NOW

  • Do you employ any EU citizens here in the UK or in the EU, or do you plan to?
  • Do any of your staff need to travel to EU countries?
  • Does your business import or export goods to or from the EU?
  • Do you or any of your suppliers temporarily store goods in a warehouse based in the EU?
  • Do you dispatch goods or documentation to the EU via postal or courier services?
  • Do you rely on any specialist or service located in the EU?
  • Do any standards govern the work you do, such as European EN standards?
  • Does your company manufacture products that must certify to EU safety, security or ecological standards?
  • Does your business own any patents, trademarks or registered copyrights?
  • Is any of your data hosted in an EU country (including cloud storage)?
  • Do you hold personal data about people based in the EU on UK servers?
  • Is your business currently VAT registered?
  • Does your business hold money in EU financial institutions?
  • Does your business rely on funding or grants that comes from the EU?
  • Do you provide any services that are restricted to people holding a relevant qualification?

Remember, this list is indicative only!

What if my business is based in the UK and only has UK customers?

This will still impact you in some way.

Consider a car maintenance job in the UK on a UK manufactured car. It might need a replacement part that is manufactured in the EU. It could even be a part manufactured in the UK, which has then been exported to be warehoused in the EU. If that part is sent to the UK for your customer, it is being imported: it may now suffer delays in clearing customs, or come at an increased cost due to new import duties. And to import that part your business will face additional new administrative overheads, including EORI registration. The impact of the changes that are coming in just a few weeks will impact us all.

  • You might hold data on EU citizens who are customers, or suppliers (see below for GDPR).
  • Your business might have a trademark: that will now need a new process to protect it in the EU.
  • If you’ve used an EU trademark (EUTM) in the past then you might need to register it again in the UK (UKTM).
  • You might currently use a website that has a .EU domain. You’ll no longer be able to use it if your principle place of business is in the UK.
  • Your business might also rely on EU citizens for staffing.

What could be affected by a ‘no deal’ Brexit on 31 December?

From 1 January 2021, if no agreement is reached in the next few days, then World Trade Organization (WTO) tariffs will automatically apply to goods moving between the UK and the EU. Many new rules and regulations will then impact:

  • VAT payments, VAT refund claims, and custom and excise duties.
  • State aid, including grants and block exemptions.
  • Product safety or eco-compliance, including packaging and labelling that reference EU licensing.
  • Copyright, trademarks and patents.
  • Environmental industrial standards, including emissions.
  • Transfer of personal data between the EU and UK.
  • Mutual recognition of qualifications and relevant licences (including audit, banking and insurance licences).

Imports to GB

More extensive border checks will immediately impact transport and logistics, which will slow the movement of goods across the UK-EU border.

Importing goods from the EU will also require your business to obtain an EORI number that starts with GB, and to declare goods when they enter GB using an entry summary declaration.

Up to 30 June 2021, you can use a simplified declaration when importing. For this, you’ll need to:

You’ll still need to know the relevant rate of duty and VAT to apply (including VAT on services). (But note that goods that are small enough to be sent by post will face different rules.)

To ease this transition you could opt to use a third-party expert in the UK such as freight forwarding, customs agents or fast parcel operators, who will all be able to advise you.

Postponed VAT accounting

After 31 December 2020, if you import goods from anywhere outside GB (or possibly the UK, depending on the final rules), you can use postponed VAT accounting to avoid the need to pay VAT up front and then reclaim it. Instead, you declare the import VAT on your VAT Return.

That could help ease cash flow, but you’ll need to include your EORI and VAT number on the customs declarations to use postponed VAT accounting.

Different rules apply to VAT if their costs are not exceeding £135 in value. These goods will not attract import VAT: instead VAT will be applied by the seller at the point of sale. If you sell these goods to a consumer, or a non-VAT-registered business, then you will now need to be registered for VAT with HMRC.

If goods are being sold to a VAT-registered business then the UK VAT will be reverse charged to the customer, which will mean the goods can clear customs quickly.

Exporting goods to the EU

The big change here is a new requirement to make customs declarations. Again, you can choose to use a UK-based freight forwarder, customs agent or fast parcel operator to ease the administrative burden.

Some goods might need export licenses or certificates, and you will need an EORI number beginning with GB for any exporting.

If exports to the EU are a significant part of your business you’ll benefit by being authorised by HMRC to use the National Export System, which allows you to use the simplified declaration procedure. For this, you must be pre-registered with HMRC, but it will mean that you can use a pre-shipment advice declaration to avoid the need for a full declaration upfront.

Note: you will still need to provide the rest of the customs export information at a later date.

You can also simplify export paperwork using the entry in declarant’s records procedure, although this only applies to goods that don’t need a pre-departure declaration.

For most exports, VAT will be zero-rated.

Exporting goods to non-EU countries

The UK will no longer be part of existing trade agreements between the EU and certain non-EU countries, meaning that businesses here will instead apply the World Trade Organisation (WTO) Most Favoured Nation (MFN) rules. This includes exports to the USA, which is the UK’s next largest trading partner. The rules can be found on the WTO Market Access Conditions (MAC) website.

Product certification and conformity marks

The UK and US have agreed to mutually recognise each other for product testing, certification and conformity agreements, which is good news. But this doesn’t apply to all MFN and the government has provided individual guidance for each country.

There are four sets of UK government guidance that might be relevant to you:

Until 1 January 2022 it remains legal to sell goods in Scotland, England and Wales using the CE mark (provided they do meet EU requirements, where these match UK requirements). Thereafter, a CE mark will need to be replaced with the UKCA mark.

The rules for goods sold in Northern Ireland are still being negotiated.

Business travel

Existing UK passports (burgundy-coloured with EU markings), can still be used after 31 December 2020, provided they have at least six months left until expiry. If your passport expires sooner, then you must apply for and receive a new UK passport.

Additionally, passports over 10 years old since the date of issue will need to be renewed, even if they had ‘extra months’ added following a previous renewal.

It’s not yet clear how state-provided travel/health insurance – EHIC and similar – will work.

Will I be able to employ EU citizens?

Yes, but as of 1 January 2021, EU citizens moving to the UK for work will need a visa. To get this, they’ll need to show they have a job offer from an approved employer sponsor. Therefore, if your business recruits from the EU then you should apply to become an approved sponsor. This typically takes eight weeks.

In order to remain working in the UK, your existing employees who are EU, EEA or Swiss citizens – and who are already in the UK as of the end of the transition period – will need to apply to the EU Settlement Scheme by 30 June 2021. (This excludes Irish citizens).

Two kinds of statuses are awarded:

  • Settled: For those who’ve lived in the UK for a continuous five-year period as of 31 December 2020
  • Pre-Settled: For those without five years continuous residence at that date.

Until 30 June 2021, you’ll need to continue to check the right to work status of any EU/EEA/Swiss job applicant.


The UK government adopted the GDPR into national law as part of the Data Protection Act 2018, so the same protections and requirements will continue to apply after 31 December 2020. In addition, the UK is hoping to become a ‘favoured nation’ via an ‘adequacy decision’ on behalf of the EU. If agreed, that should facilitate the free transfer of personal data without the need to implement additional safeguard… but like so much else, this has yet to be confirmed.

Call us if you’d like advice on any of these issues in more detail.


Book your confidential consultation today