Yesterday, Chancellor Jeremy Hunt presented his second Autumn Statement, but with a very different tone to the gloomy announcements made this time last year. The Chancellor announced initiatives with a massive focus on pushing growth in the economy. The main question you’ll all no doubt have is… “how does it affect me?”, let’s take a look…
How do I prepare my business for Brexit?
19 November 2020
Mark Friend
Brexit, Accounting & Compliance
At midnight on 31st December 2020 the transition period designed to give the UK and the EU breathing space to negotiate a post-Brexit deal will officially end.
At that point we will have either negotiated a free trade agreement with the EU or we will continue to trade with the EU under World Trade Organization (WTO) rules. Trade will not stop as many people state.
There is a lot of scaremongering out there with concerns over supply shortages as well as many other problems forecast if the transition period ends with us moving to a WTO arrangement.
The reality is we already trade with most of the world under WTO rules. If there is no free trade deal agreed the UK will simply trade with the EU with the same rules as the rest of the world.
The impact will be as follows:
Paying tariffs on imported goods into the UK
From 31 December 2020, we may need to pay different rates of tariffs on imports into the UK.
Paying tariffs on exports from the UK
From 31 December 2020, an importer in another country may need to pay different rates of tariffs on exports from the UK.
The tariffs on our exports will vary by country. Each country decides its own import tariffs. If you are exporting a product to a country that the UK has no trade agreement with from 31 December 2020, the importer will pay the non-preferential tariff rate applied in that country to its imports.
Trading in services
To provide services in other countries you will need to follow the terms set out in the legislation of the host country. This includes commitments that the host country applies to all WTO members.
What should you do now?
Clearly a lot can still happen between now and the 31st December. Negotiations are still ongoing. With the uncertainty ahead it may be prudent to start planning now.
We have prepared a link to a Brexit 20 point checklist which we hope you will find useful when preparing for the changes that will come into play on 1st January 2021. We are planning to provide more detailed update of the changes in the near future.
The content in this blog is correct as at 19/11/2020. See terms and conditions.
