On January 31, 2020, the United Kingdom (UK) left the European Union, but on that day a transition period also entered into force. This means that the UK will remain part of the European customs union and the so-called single market until the end of this year. But what about from January 1, 2021? That is when the transition period comes to an end and, moreover, the negotiations on a future European-British trade agreement are very difficult. Deal or not, the Brexit will therefore have important consequences for companies trading in the United Kingdom. As a business owner, what steps can you already take to prepare for this? We list a few points of attention below.</strong
Checklist
Get your customs formalities in order
At the stroke of midnight on the night of December 31, 2020 to January 1, 2021, the UK will exit the European Customs Union and the Single Market. It will therefore become important to consider the implications associated with imports from the UK and/or exports to the UK. Consider the following issues:
- What does a customs clearance in Belgium and a customs clearance in the UK cost?
- What import duties are due on my commodity codes?
- Do customs permits (e.g. customs warehousing, inward or outward processing) need to be applied for?
- Do I need to apply for a Belgian EORI number?
- Am I sufficiently familiar with the PLDA declaration system used by customs? Or should I use an external customs representative?
Vigilance is also required on the VAT front
- The introduction of the Brexit reintroduces a fiscal border between the EU and the UK. And thus brings with it the end of the intra-EU system.
- The delivery of goods to a customer in the UK will no longer be considered an IC delivery, but an exempt export. For this purpose, the necessary supporting documents must be presented (transport documents, single document...).
- Also vice versa, the delivery of goods from the UK to a Belgian customer will no longer be considered an IC acquisition in Belgium, but a taxed import. Do you have a permit ET 14,000 to shift the payment of the Belgian VAT to your VAT return or do you have to pay the VAT immediately upon customs clearance?
Impact of the Brexit on logistics?
- The intervention of customs and all kinds of inspection bodies for products and deliveries to or from the UK also bring with it a lot of administrative implications.
- Think about: declarations and checks at the border posts, what does the extra waiting time and procedure costs mean for your company's logistics? Will you get your products to the UK on time? Do you need to stockpile in the UK to be efficient?
What about the staff you employ in the UK?
- It will soon no longer be possible to work in the UK with Belgian staff without restriction. After all, the European principle of free movement of persons will then no longer apply.
- Have you already applied for visas and work permits for your staff?
In what currency are contracts concluded, invoices paid, what about exchange rate risk...?
- The British pound underwent a lot of fluctuations recently as a result of the impending Brexit.
- How do you catch any exchange rate differences? In which currency do you negotiate? Do you foresee exchange rate clauses in the contracts you conclude?
The list of potential competitors is only getting longer
- Even if your company does not itself trade directly with the UK, your company may also be indirectly affected by the Brexit. This, for example, because your customers export to the UK and they have to deal with fewer sales. Or your supplier itself may purchase fewer products in the UK.
- On top of that, of course, one of your biggest competitors based in the UK may suddenly find itself facing additional trade barriers.
Are your packaging and labeling (for food products) still in line with current legislation?
- European and British labeling regulations are likely to gradually begin to diverge.
- Not only are the preferences of British and European consumers sometimes far apart, local food industries are also launching different market and usage tests. Think of differences in the color or layout of packaging. In addition, sometimes different terminology is common.
- If necessary, contact your sector federation or the Belgian Packaging Institute (BVI) for specific questions.
What about (trade) contracts after the Brexit
- Even though there is still a lot of uncertainty around the Brexit, you can already prepare for the possible consequences. After all, this new economic situation must be reflected in new and existing contracts.
- By proactively dealing with the possible consequences of the Brexit, you show willingness to safeguard a long-term relationship. In addition, you also avoid later discussions by renegotiating your (trade) contracts now.
What does the Brexit mean for your European trademarks, designs and other intellectual property rights?
- The UK government has indicated that it will grant equivalent rights in the UK to all EU brand names that were already protected in the EU before the Brexit. Thus, the UK authorities will automatically create a new UK trademark right. Consequently, you can also have these trademarks protected under local law in the UK.
- In addition, the UK will remain a member of the European Patent Office (EPO) even after the Brexit. Thus, the current regulations for patents will continue to apply.
There should be an agreement between the UK and EU by the end of November to ensure everything goes smoothly by the end of this year.
The question remains, however, if the UK and the EU will reach an agreement. One thing is clear, however: the clock is ticking relentlessly on.
If you have any questions about the concrete impact on your company and on the further development of the Brexit, please contact your customer manager or contact us at the following email address: brexit@titeca.be