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Post-transition, are you Brexit ready?

Post-transition - are you brexit ready?

After years of negotiation and preparation, the Brexit transition period ended on 31 December 2020 and the UK began its new life outside the EU. However, the Brexit saga is far from over, with many details yet to be finalised. As the UK adjusts to its new status outside the world’s largest trading bloc, individuals and businesses must now get to grips with the implications. Here we summarise some key considerations for clients to bear in mind.

Movement of people

Free movement of people between the UK and EU (and vice versa) ended at 11pm on 31 December 2020. UK nationals legally resident in the EU before that date should continue to enjoy the same rights they already had (though they may need to comply with local registration rules); and EU citizens living in the UK who applied to the EU Settlement Scheme should also be unaffected.

However, UK nationals may now only spend a maximum of 90 days in the EU in any 180 day period unless they are granted a valid visa. They must also have at least 6 months remaining on their passports, and ensure that they have valid health insurance. A new Global Health Insurance Card (GHIC) replaces the European equivalent (EHIC) for UK nationals, which must be applied for online.

 

EU nationals wishing to live or work in the UK must now meet the same conditions as non-EU nationals, under the points-based immigration system. Similarly, UK nationals wishing to emigrate must ensure they comply with all local immigration rules in their country of choice, which may be more burdensome than before.

Artwork

The Trade and Cooperation Agreement (TCA) between the UK and the EU sets out provision for the movement of goods, people, and services. Importantly, the TCA does not allow for the imposition of tariffs, quotas or import taxes; but the new administrative and regulatory burdens should not be underestimated.

For individuals (and trustees) moving artwork across the border, a UK export license will now be required from Arts Council England, instead of an EU export license. This will not apply for movement of works between Great Britain and Northern Ireland.

Collectors based in the EU who purchase art and other luxury goods in the UK will now incur VAT at the rate set by their home country. Exceptions may apply where art is imported temporarily (such as for tours or exhibitions), although specialist advice must always be sought.

Import and export

For individuals and businesses importing and exporting between the UK and the EU, the new rules impose a higher administrative burden and may also be more expensive. The UK Government has provided detailed guidance on the process, but many news stories in the last few days demonstrate that uncertainty remains around obligations.

Some of the key questions businesses of all sizes should ask include:

  • Do you (and your importer, if relevant) have a GB Economic Operator Registration & Identification (EORI) number?
  • Will you deal with Customs yourself, or will you employ the services of an intermediary broker?
  • Should you consider applying for Duty and VAT deferments if you import regularly?
  • If you import and export goods, are you using the correct Commodity Code?
  • Do you trade with Northern Ireland, and, if so, do you understand the implications?

These are just some of the considerations that businesses – including the small businesses that make up 99% of the UK economy – should consider, but it is not an exhaustive list. You should always engage the services of a qualified professional to provide formal advice.

Summary

There will undoubtedly be bumps in the road ahead when it comes to businesses, individuals and families adapting to the multitude of new rules and regulations. Likewise, trustees, company directors and advisors are all in unknown territory.  We need to ensure that we too fully understand what the changes mean, both for ourselves and our clients.

As the UK continues to adapt to life outside the EU, we will be continually monitoring the ever-changing landscape in order to keep up to date with the latest legislation, seeking specialist advice for our clients where appropriate to give them that much needed peace of mind.