Preparing For Brexit: An Accountant's Checklist

11th Dec 2020
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UK businesses will face changes in relation to EU trade after the Brexit on the 1st January. Find out more.

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At the time of writing, it’s still unclear whether a UK/EU tariff-free trade agreement will be reached before the transition period ends on 31st December. But whatever happens, UK businesses will face changes in relation to EU trade from next month.

As your clients’ company accountant, your firm is in the best position to flag up the issues you know your clients are likely to face. Planning needs to take place now, particularly around how existing agreements with European Union customers and suppliers may alter.

Main points in relation to your clients

Consider your current clients. Do any of them:

  • Import goods into the UK
  • Export goods from the UK
  • Regularly travel to the EU on work business
  • Plan to live or work in the EU

Myriad Associates has put together this brief checklist so you can review and recommend actions your clients may need to take in preparing for the 1st January 2021.

More information can be found in the government’s published guidance.

1. Trading with the EU

Many practices will have clients that trade between UK countries as well as across the EU-27 and globally.

HMRC estimates that around 240,000 UK businesses currently only trade with the EU. These businesses will now need to adhere to new customs arrangements, unless they only trade between Northern Ireland and Ireland in the event of no deal.

Once the transitional period ends, businesses will be required to complete customs declarations for goods crossing the UK border. Simplified arrangements will be in place for the first six months, so organisations are able to defer making declarations at the start.

The new customs documentation itself is somewhat complex, and HMRC is advising businesses to use an agent in completing it. However, those looking to go it alone can use one of HMRC’s recommended training providers.

Government guidance has also been released in conjunction with the European Commission for entities that trade between the UK and the rest of the EU. Both yourself and your client(s) may therefore find the below two links useful:

It’s also possible to sign up to get email updates from Gov.uk.

2. Moving goods around the EU

Any businesses that need to import or export goods to or from the EU should register for an Economic Operator Registration and Identification (EORI) number now. Many have already done so, but you know which clients this is likely to apply to - check they’ve done it.

Additionally, if any of your clients are exporting goods, there’s a step by step guide on the Gov.uk website.

Note that the export rules vary by sector so it’s highly recommended businesses get a personalised list of actions via the transition page of the Gov.uk website. The VAT reporting rules for EU sales will also need to be taken on board, as well as the guidance on paying VAT on imports. Additionally, there’s a step by step guide available for companies that wish to import here: https://www.gov.uk/prepare-to-import-to-great-britain-from-january-2021.

Your client may also choose to register for “Authorised Economic Operator (AEO) status which enables “trusted” businesses to benefit from more simple customs procedures. It’s not easy to achieve though - find out more.

What if a free trade agreement isn’t reached?

If a UK/EU free trade agreement cannot be reached in time, then all imports and exports to the EU will be subject to tariffs. Businesses will need to identify what categories of product it trades in, and where “inputs” come from. This then means the appropriate tariffs can be applied. The government has published tariff amounts and VAT rates by commodity.

Any businesses that already have agreements with EU organisations will likely need to have them redrafted. This is so there can be clarity around new import duties, VAT and customs arrangements, dispute resolutions and additional administration following Brexit. You should therefore encourage your clients to take legal advice in these areas as a matter of urgency.

Finally, if any of your clients employ EU workers, they will need to understand the rules around applying for settled status.

3. EU domain names

Many companies will have more than one domain name but if one of your clients has a “.EU” domain name, they must check their eligibility to hold it after 31st December 2020. The government has published guidance on .eu domain names - what you need to do before the end of the transition period. Furthermore, they should read the EU guidance if they’re involved in eCommerce.

4. Copyrights

A large amount of UK copyright law has its origins in the European Union copyright framework. Therefore there are many references within UK law to various member states, as well as the EEA and EU in general. This is particularly the case around EU cross-border copyright arrangements. Such arrangements are only relevant within the European Union and EEA, providing reciprocal protections and benefits between all EU countries. If no future reciprocal agreement between the UK and EU can be thrashed out, then businesses should contact their lawyers to discuss the way forward. Find out more.

Trademarks and Intellectual Property are also issues your client(s) will need to consider following the end of the transition period.

5. Data Protection

Laws around data protection may also be affected come January, and businesses must comply with any new license requirements and/or regulation changes. Once negotiations are have reached a conclusion, the Information Commissioner’s Office (ICO) will update its guidance.

Find out more about Brexit after the 31st December

Obviously this isn’t a fully exhaustive list of everything your clients should consider post-Brexit. Indeed, it’s likely to remain an evolving situation for some time. Stay updated on the government’s Brexit transition pages.

How Myriad Associates can work with you

Myriad Associates has been in business for almost two decades specialising in all aspects of research and development funding specifically. This includes R&D Tax Credits, R&D Grants, Video Games Tax Relief (VGTR) and R&D Capital Allowances.

Over the years we’ve worked with companies, and company accountants, from all over the UK in achieving the research and development funding they need. So if you would like follow up on any points discussed in relation to your clients’ R&D ambitions, please go get in touch by calling us on 0207 118 6045. You can also send us a message.