The government, yesterday, issued a series of updated communications for businesses and individuals to ensure that we are ready for the end of the Transition Period on 31 December 2020. In light of these messages, and the increased risk of a “hard Brexit” following the publication of the UK Internal Market Bill, I would like to share with you BDO’s recommendations for preparing for Brexit on 1 January.
Brexit is now a critical business issue and it is important that you understand the necessary actions that need to be taken.
The UK's withdrawal from the EU will come into full effect following the end of the Transition Period on 31st December. Speaking at the launch of the government's “Brexit Readiness Action Plan” yesterday, An Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar TD said:
“For companies that trade with Britain, things will not be the same. This won’t be business as usual and this is not a drill. You need to prepare for the new normal and you need to get ready now,”
The action plan was designed to provide guidance and advice on a number of areas and issues that will arise at the end of the transition period. I encourage you all to read the government’s Get Ready for Brexit Communication and, in particular, study the new rules that will apply to your sector which are summarised here.
In relation to customs, which will impact immediately from 1 January, our clients purchasing goods from, or selling goods to the UK, will be faced with new controls at ports and will be required to lodge necessary import and export declarations.
There will also be an expectation to understand customs tax regulations.
Changes to your supply chain, and/or your existing group, to align with commercial needs post Brexit may also bring with it direct tax consequences that you would need to take advice on.
Additional changes in relation to VAT and services will also be affected following Brexit which you will need to be aware of. Numerous supports are available to help you prepare for these new rules and if you require any assistance with this please contact us for further information. Click here for a summary of the available supports.
Finally, I would also like to take the opportunity to comment on the developments in the UK this week. The impact of these developments on the ongoing Free Trade Discussions between the UK and the EU is an obvious cause for concern for us all. If the talks are unsuccessful, then the immediate impact of this will be seen in the introduction of customs duties and tariffs with effect from 1 January. There may also be potential negative impacts on the movement of goods between the North and South. We will keep you updated on any further developments in this regard.
Our Customs and International Trade experts will be hosting a webinar to update you on the recent events in the coming week, including our advice on developments at this point. If you are interested in attending, please contact [email protected], or if you have questions please contact your relevant BDO Partner or a member of our Brexit Team.
Thanks and stay safe,