With so much confusion and so few answers surrounding Brexit, it’s a stressful time for those with European customers. While 66% of UK companies say Brexit will impact them, only 21% of small businesses have actually started adapting their business processes to prepare.[
So, how can you/should you prepare when we aren’t entirely sure what Brexit will look like yet? The UK and EU governments have begun to publish guidance on how Brexit will affect UK businesses. Of course, in the course of time, things may become clearer and a better Brexit strategy might be possible. In the meantime, the safest way to operate is under a ‘no-deal’ assumption. If you run a small business or online business that trades with EU, here are some things to bear in mind:
Free trade with the EU
Businesses can currently move goods freely between the UK and other EU states. Other than alcohol, tobacco and oil, there are no import or export duties to pay. According the government’s guidelines,“after the UK leaves the EU, in the event of a ‘no deal’ scenario, businesses exporting goods to the EU will be required to follow customs procedures in the same way that they currently do when exporting goods to a non-EU country.”
In order to prepare for this, it is advised that businesses:
- Familiarise themselves the UK EORI (Economic Operator Registration & Identification scheme) registration process.
- Consider how they will handle export declarations. This could be through engaging a customs broker, freight forwarder or logistics provider.
- Look into whether you may need to apply for an export licence.
Trademarks and patents
Currently, EU trademarks are intellectual property rights, granted by the EU Intellectual Property Office. This means that a business with its own trademark is protected across all EU member states, including the UK. If you have trademarked your logo for use on packaging or product labels, then you’ll need to make some minor changes in the event of a ‘no-deal’ Brexit.
- Trademarks will be subject to renewal in the UK.
- Trademark holders with an existing EU trade mark or registered Community Design will have a new UK equivalent right granted that will come into force at the point of the UK’s exit from the EU
Domestic VAT will not change as a result of any form of Brexit. However, many businesses are concerned about how it will affect imports and exports within the EU. The Chequers agreement, which is still under negotiation, details the future relationship between the UK and the EU. This document suggests:
- There will be ‘common cross-border processes and procedures’ to ensure that new declarations and border checks are not required.
- If there is a ‘no-deal’ Brexit, postponed VAT accounting will apply to UK import and exports. i.e UK VAT-registered businesses will be able to account for VAT in their VAT return, rather than paying it as goods arrive or depart the UK border.
- You’ll need to be aware of the individual VAT requirements of the EU countries you sell to.
There are many more changes that are yet to be confirmed, and many other ways in which the UK’s small businesses might be affected. At present, the general advice is to…
- Start talking about Brexit. Chat with your suppliers, your colleagues and trade organisations. It’s not too early to be asking questions and beginning negotiations.
- Review your processes by documenting every stage of running your business. When official guidelines are released, you’ll be able to quickly identify the areas of your business that are going to change.
- Embrace the change. As a small business, you’re in a great position! You haven’t got millions to lose (yet) and you are used to adapting and improving. See this new world as a challenge.
For more information on how we can help you with the Brexit changes, please contact us today.
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