Selling Goods & Services

Will EU customers have to pay tariffs on goods that my business exports to the EU?

As the UK is currently a member of the European Union, this means that EU businesses are able to import goods from the UK without being subject to import duty. If the UK reaches a Withdrawal Agreement with the EU, then this will continue to apply until the end of the implementation period (31st December 2020).

Once the UK leaves the European Union, the level of import duty will depend upon the future trading relationship agreed between the UK Government and the EU which is still subject to negotiation.

The political declaration (released November 2018) setting out the frame work for the future relationship between the EU and the UK proposes zero tariffs, no fees, charges or quantitative restrictions across all goods sectors.

In the event of a ‘No Deal’ Brexit?

In this scenario, from the 29th March 2019, the UK would revert to World Trade Organisation Rules (WTO) which means that EU businesses would have to apply the same customs procedures to exports to the EU, that are currently used when exporting goods to countries outside the EU. This would result in the UK and the EU trading on non-preferential terms. This means that ‘Most Favoured Nation’ tariffs would apply to imports from the UK. From this point onwards, the EU Common Customs Tariff would apply to goods from the UK.

Will my business have to VAT register in the EU countries we sell goods or services in?

UK businesses currently have to register for VAT in other EU member states if they are selling to a customer who is not registered for VAT in that country and the UK business is responsible for delivery. Under the current rules goods bought within the EU supply chain arrangements known as ‘triangulations’ are zero rated and you do not need to register in the final destination EU country.

This will remain the same until the end of the transition period, if a Withdrawal Agreement is reached.

In the event of a ‘No Deal’ Brexit?

UK businesses selling their own goods in an EU member state will continue to be required to register for VAT in the EU member state where sales are made. With respect to goods bough under the EU triangulation system, this would most likely end in the system being withdrawn and the UK business would have to register in the final destination EU country. For UK businesses selling services into the EU, the current place of supply rules will continue to apply on the same basis as they do now. However, there are certain circumstances where the rules may change including: digital services, insurance and financial services and the VAT Mini One Stop Shop (MOSS.)

Click here to find out more information on VAT for businesses if there is no Brexit deal.

Will by business still be able to sell services to companies based in the EU?

As the UK is a member of the European Union, UK businesses currently have the freedom to sell services to companies based in other European Union member states. This is set out in the Services Directive which requires Member States to abolish discriminatory and restrictive requirements. If the UK and the EU reach a Withdrawal Agreement, then the status quo will continue until the end of the implementation period in 2020.

We do not currently know what barriers UK businesses will face after the implementation period ends as this is still subject to negotiation between the UK and the EU. However, as the UK Government is committed to leaving the single market, it is highly likely that UK businesses will no longer have the same level of access. This will entirely depend upon the final agreement and the extent to which the UK chooses to diverge from EU regulation. The more the UK diverges from EU regulation, the more likely it is that your business may be restricted or face barriers when trying to sell to companies based in the EU.

In the event of a ‘No Deal’ Brexit?

In this scenario, the UK and the EU would have to fall back on World Trade Organisation rules. This means that UK businesses would no longer have any preferential access to the EU market and would have the same level of access as other countries that do not have a free trade agreement with the EU which covers services. Therefore, your business may be unable to continue selling services to companies based in the EU. This will ultimately depend upon the specific commitments for services trade that the EU and its Member States apply to trading partners, in their schedule of commitments (as a member of the WTO) under the General Agreement on Trade in Services.

Will there be any changes to the documentation I need to provide in order to export goods or services into the EU?

If the UK Parliament ratifies the withdrawal agreement with the European Union, then there will be no changes to the documentation you need to provide in order to export goods or services in the EU until the end of the implementation period (31st December 2020).

It is not yet clear as to what documents you will need to provide when exporting goods to the EU after the end of the implementation period. This is still subject to negotiation between the UK and the EU and will only become clear once the future trading relationship has been agreed.

In the event of a ‘No Deal’ Brexit?

In the event of a no deal Brexit, the UK will no longer be a member of the Customs Union. This means that there will no longer be the free circulation of goods between the UK and the EU. UK businesses will need to be aware of the following before exporting goods to the EU:

  • Submit an export declaration to HMRC (You can submit this online or by using HMRC software. You may wish to engage a customs broker, freight fowarder or logistics provider to do this for you.)
  • Businesses may also require an export license or provide supporting documentation to export certain types of goods from the UK.
  • Commercial Invoice

UK Businesses will also need to be aware of other supporting documentation such as certificates of origin and an ATA Carnet (taking goods on a temporary basis) which may be required.

Will my business still be able to sell goods and services to the c.50 regions and countries that the UK has trade agreements with? (e.g. Canada, Turkey, South Korea.)

Through its membership of the European Union, the UK currently has access to trade agreements with over 50 regions and countries. The UK Government has stated that they would like to maintain these preferential trading arrangements to provide stability for businesses as the UK exits the EU. The Government has said that, if a Withdrawal Agreement is reached, during the implementation period, they would arrange for these international trade agreements to continue with partner countries. In this scenario, you would most likely be able to continue selling goods and services on the same terms as now. After the implementation period ends (expected: 31st December 2020), the UK would be free to pursue an independent trade policy and renegotiate these agreements, should it wish to do so.

In the event of a ‘No Deal’ Brexit?

In this scenario, the UK would immediately lose access to these preferential trading arrangements and would fall back on to World Trade Organisation Terms. This means that, in the absence of a new trade deal, it is most likely that you would be subject to the same tariffs and barriers you currently face when selling goods and services to other non-EU nations that do not have a trade deal with the EU. The Government has said that they would look to maintain the status quo and replicate these preferential trading arrangements (as closely as possible) into bilateral UK-third country agreements from the day the UK exits. However, this is not guaranteed and is subject to negotiations between the UK and third countries that have a trade agreement with the EU.

Will there be any changes to customs procedures at UK borders with the EU?

UK businesses can currently move goods freely throughout the EU and are not required to make any customs or export declarations, nor are they subject to import duty. If the UK reaches an agreement with the EU, then this will continue to apply until the end of the implementation period. If the backstop is activated then there will be no changes to customs procedure for the duration it remains in place.

It is not clear how customs procedures will change at the end of the implementation period as this is still subject to negotiation between the UK and the EU. The UK Government has proposed implementing a free trade area for goods which it claims would avoid the need for customs and regulatory checks at the border, including customs declarations, routine requirements for rules of origin and entry and exit summit declarations. The products would only be checked once in either the UK or the EU market before being sold in both markets. The EU & UK’s draft Political Declaration on the future relationship (released November 2018) also outlines the intention to ensure ‘deep regulatory and customs cooperation’.

In the event of a ‘No Deal Brexit’?

In the event of a no deal Brexit, UK businesses would no longer be able to circulate goods freely throughout the EU. This means that UK businesses would be required to apply the same customs and excise rules to goods moving between the UK and the EU, as they would between goods moving from the UK to non-EU countries. This would require customs declarations for goods entering and leaving the UK, as well as safety and security declarations by the carrier. The EU would also require customs declarations on goods coming from, or going to the UK, as well as requiring safety and security declarations.

There would also be changes in regards to the movement of excise goods, with the Excise Movement Control System (ECMS) no longer being used to control suspended movements between the UK and the EU. However, it will continue to be used for moving excise goods within the UK.

Will my business still be able to use a .EU domain name?

If a Withdrawal Agreement is reached, then UK businesses will be able to continue using their .EU domain names until the end of the transition period - 31st December 2020. After the transition period, the EU has confirmed that organisations (established in the UK but not the EU) will technically no longer be eligible to register for, or renew, .EU domain names. The EU Commission has also confirmed that after the transition period ends, the .EU registry will have the right to revoke the domain name from existing holders in the UK as they will no longer be eligible.

In the event of a ‘No Deal’ Brexit?

UK businesses will technically no longer be able to register or renew .EU domain names from the 30th March 2019. As mentioned above, the .EU registry will have the right to revoke the domain name from existing holders in the UK after the withdrawal date.

Click here for more information from the European Union on .EU domain names post Brexit.


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