Brexit: ten things for businesses to focus on during the transition period
31 January 2020: ICAEW’s checklist sets out things businesses should prepare for during the 11-month transition period following the UK’s exit from the European Union today.
From 1 February, the UK and the European Union will begin a new chapter in their economic, social and political relationship following the UK’s departure from the EU.
The UK will enter a period of negotiation lasting until 31 December 2020. During this time, the UK will aim to negotiate new trade arrangements with countries around the world.
The EU will be the highest priority, given that EU imports of £369bn represent 51% of the UK’s total imports and exports to the 27 EU countries of £297bn are 44% of the UK’s total exports.
There are also an estimated 3.6 million EU citizens living in the UK, many of whom are employed by UK businesses. The government has stated that there will be no change to their rights and status until 30 June 2021.
During the so-called transition period between 1 February and the end of 2020 UK-EU business rules will not change. However, to avoid any potential disruption, ICAEW’s message to members is that businesses will need to be ready for new trading conditions with the EU/EEA from 1 January 2021.
To help members get ready, ICAEW has prepared a checklist of things businesses need to focus on. During the transition period, businesses could make sure they:
- Ensure employees who are EU citizens are aware of the settlement scheme and the need to register.
- Understand how additional customs duties could affect sales or supply chain.
- Ensure they have a UK EORI number, for UK business trading with the EU/EEA or countries outside the EU/EEA. EU businesses will need an EU EORI number to trade with the UK.
- Consider who will complete customs documentation and what information will need to be provided.
- Understand EU regulations that apply to goods or services provided in the EU/EEA.
- Consider if they could benefit from simplified import procedures. Businesses will need to register to use them. They mean businesses may not need to settle VAT and duties (if any) on imports immediately at port.
- Review principal contracts to see how they deal with different trading conditions.
- Review data flows to identify whether personal data is received from the EEA, including from suppliers, processors and other group companies.
- Consider how they are affected by changes to VAT administration.
- Reflect Brexit risks and opportunities in reporting, so stakeholders know how they are responding.