The terms of the UK’s exit from the European Union remain unclear, however the Brexit deadline has now been extended to 31 January 2020, and there are no negotiations taking place until after the general election on 12 December. One scenario, that of a ‘no deal’ still remains a possibility at that time. This potential outcome would have a significant impact on many smaller businesses.
Our hub is designed to support small businesses and the self-employed to prepare for a possible no deal scenario when the UK leaves the European Union. The hub contains and signposts you to information, designed to be practical in nature, to help you to prepare.
We will be updating the hub regularly.
Import, export and trade
If you are currently importing to the EU or plan to do so after 31 January 2020, there are some steps you need to take:
Make sure you have a UK EORI number with a GB prefix. If you are VAT registered, and currently trade exclusively with the EU, the UK Government should have automatically issued you a GB UK EORI number. However if you are below the VAT threshold, and you trade exclusively with the EU, you will need to apply for a UK EORI number via the GOV.UK website
If you are importing through receipt of parcels in the post (e.g. Royal Mail or Parcelforce) – you will not need a GB EORI number.
If you are importing via a platform such as ETSY or Amazon that uses a parcel company (e.g. DHL or UPS), if the parcel is low value, you will not need a UK EORI as the parcel company is likely to be acting as exporter and importer.
If the parcel is high value, you are likely to be the importer and will need an EORI number.
In a minority of cases, perhaps because of your INCO terms or because you are importing from a subsidiary of your own company, you may need to engage with the EU Customs Authorities. In these instances, you will need an EU EORI number that should be issued from the EU country that you are importing from.
Certain types of goods, called controlled goods (such as food, livestock, chemicals) may require an import license.
If you are trading with the EU after 31 January 2020, customs and or excise duties may apply. This does not apply to goods imported into Northern Ireland from the Republic of Ireland which will continue to be tariff free. The temporary rates of customs duty tariffs was published in March 2019. Minor changes were announced on 8 October 2019. If the goods you are importing from the EU are subject to a tariff (customs or excise duty) you may wish to consider setting up a duty deferment account. This will enable you to pay duties owed on goods by monthly direct debit. The duty deferment account needs to be set up before you import your goods
You will need to decide whether to use standard import procedures or (where appropriate) simplified standard import procedures or the Common Transit Convention.
The advantage of using simplified import procedures (Transitional Simplified Procedures), is that for most goods this allows you to delay submitting a full import declaration and paying customs duties for up to six months. If you are using a freight forwarder or other intermediary through a direct relationship (i.e. you, as opposed to your customs agent are responsible for keeping records, the accuracy of any information provided on your customs declarations and any Customs Duty or VAT due), then you can still benefit from Transitional Simplified Procedures (TSP), you can find out more and enrol for TSP via the GOV.UK
There are further things you need to be aware of depending on which procedures you use. Expand the boxes below to find out more.
If you want to use the standard import procedures (rather than the simplified ones), and you choose not to/are unable to use a customs agent, then you will need to buy specialist software to complete declarations which will also involve training your staff and applying for a CHIEF badge
If you are using the standard import procedure and also engaging the services of a customs broker you will need to provide the following information to the customs agent: your commodity code and your customs procedure code.
If you are using the standard import procedures and not engaging a customs agent as well as completing the full customs declaration yourself which will require your commodity code and your customs procedure code, you will also need to provide your haulier with the following information including: Movement Reference Number, your UK EORI number and the excise eAD or ARC (if available).
If you are using the standard import procedure, irrespective of whether you have engaged a customs agent or not, you will be responsible for updating the customs declaration to show goods have arrived in the UK. This should be done by close of business, the working day after the goods arrive in the UK. In both instances, you will need to pay the following:
- Customs duty – should be paid once the goods arrive in the UK. This can be paid to HMRC directly or you can register for a duty deferment account which allows you to delay payment
- Import VAT be accounted for on your VAT return if you are registered for VAT
- Excise duty must be paid unless the goods are placed into excise duty suspension
there are differences in relation to how transitional simplified procedures (TSP) will work for standard goods and controlled goods
See here for a definition of controlled goods: https://www.gov.uk/guidance/list-of-controlled-goods-for-transitional-simplified-procedures
If you are using TSP for standard goods, you need to record your import in your own records and provide your haulier with your UK EORI number. Once the haulier informs you that your goods have arrived in the UK you must update your records. You should submit your declaration by the fourth working day of the following month. However, you can delay submitting your supplementary declaration for up to the first six months after the UK leaves the EU. If you are VAT registered, you must use Postponed VAT accounting to account for your import VAT. If you are not VAT registered, you will pay your import VAT by another means.
If you are using TSP for controlled goods, you will need to complete a simplified frontier declaration and provide your haulier with a Movement Reference Number/ Entry Number, your UK EORI number and the excise eAD or ARC if available. Once the haulier notifies you that the goods have arrived in the UK you must update your simplified frontier declaration to show their arrival time by the end of the next working day of the following month. You must submit your supplementary declaration by the fourth working day of the following month. Your duty deferment account will be debited after you have submitted your supplementary declaration. If you are VAT registered, you must use Postponed VAT accounting to account for our import VAT. If you are not VAT registered you will pay your import VAT with your customs or excise duties.
More details on how to submit a supplementary declaration under TSP can be found here: https://www.gov.uk/guidance/making-declarations-using-transitional-simplified-procedures#standard-goods-procedure.
When moving goods between or through EU and common transit countries, it is possible to use the Common Transit Convention (CTC).
This will allow you to:
- move your goods quicker because customs declarations are not required at each border crossing
- only pay customs duties when the goods reach their final destination
- complete some customs procedures away from the border
You will need the following if you wish to use the CTC:
- A UK EORI number
- You will need to register for the New Computerised Transit System to make transit declarations
You will need to do the following if you wish to use the CTC;
- complete the declarations yourself
- get a customs agent, broker or freight forwarder to help complete declarations - you must give written permission for them to do this first
- Consider applying for authorised consignor or consignee status
- If you are regularly moving goods using the Common Transit Convention, you can apply for authorised consignor or consignee status. This will allow you to start or end transit at your own premises rather than at a customs office
- You can apply for both authorised consignor and consignee status
You can find out more about the CTC at https://www.gov.uk/guidance/how-to-move-goods-between-or-through-common-transit-countries-including-the-eu.
If you are above the VAT threshold, a UK business can register for postponed VAT accounting which means they can defer the payment of import VAT by accounting for VAT on their VAT return rather than paying import VAT at or soon after the time that goods arrive at the UK Border. Postponed VAT accounting will also be available for imports from outside of the EU.
The Government has confirmed that in the event of a no deal scenario, import VAT on parcels up to the value of £135 will need to be paid for by the overseas sender/ exporter, at the point of export.
UK businesses will be able to continue to use the EU VAT number validation service to check the validity of EU business VAT registration numbers The EU VAT Registration. UK VAT registration numbers will no longer be part of this service. HMRC is developing a system so that UK VAT numbers can continue to be validated
UK business will no longer have access to the EU VAT refund system. UK businesses will continue need to claim refunds of VAT from EU member states by using the existing processes for non-EU businesses. This process varies across the EU and businesses will need to make themselves aware of the processes in the individual countries where they incur costs and want to claim a refund. Further information about claiming VAT refunds from EU member states is available on the EU Commission’s website.
If you need further information about importing and exporting goods after Brexit, contact the Government’s helpline for cross border traders:
Imports and exports: Brexit enquiries
Telephone: 0300 3301 331
Monday to Friday, 8am to 6pm
If you are exporting to the EU or planning to export to the EU after 31 January 2020, there are some steps you need to take.
There are three options available, decide which export route works best for you.
If you choose standard export
1. Check you have a UK EORI number
Make sure you have a UK EORI number with a GB prefix. If you are VAT registered, and currently trade exclusively with the EU, the UK Government should have automatically issued you a UK EORI number. However if you are below the VAT threshold, and you trade exclusively with the EU, you will need to apply for a UK EORI number via the GOV.UK website
If you are exporting in the form of sending parcels in the post (e.g. Royal Mail or Parcelforce) you will not need a UK EORI number. If you are exporting through using a parcel company (e.g. DHL), you will usually not need an EORI number as the parcel company will usually take on the role of exporter and will handle all customs declarations. If in doubt contact your parcel company to confirm the position.
In a minority of cases, perhaps because of your INCO terms or because you are exporting to a subsidiary of your own company, you may need to engage with the EU Customs Authorities. In these instances, you will need an EU EORI number that should be issued from the EU country that you are importing from.
2. Check the documentation you need
Your goods may need an export license and/or additional documents and certification such as safety and security declarations. This may apply if you are exporting livestock or food or controlled goods.
3.Decide on your declarations
Decide if you want to use a customs agent to complete customs declarations for you, or if you want to do this yourself.
4. Get your documents in order
- If you are able to use a customs agent and choose to do so provide all necessary information for a customs agent to complete a combined Export and Exit Summary Declaration (Safety and Security Declaration Certificates)
- Also check that the EU importer of your goods has an EU EORI number, obtained any relevant import certificates and completed an import declaration on their country’s import declaration system
- Ensure the driver taking your goods has the EU import declaration in the form of a Movement Reference Number. This is what your driver needs to get the goods across the EU Border
- Ensure the driver taking your goods has any specialist goods licenses that they need
5. Understand VAT
UK businesses exporting goods to EU consumers
If the UK leaves the EU without an agreement, distance selling arrangements will no longer apply to UK businesses and UK businesses will be able to zero rate sales of goods to EU consumers.
UK businesses exporting goods to EU businesses
If the UK leaves the EU without an agreement, VAT registered UK businesses will continue to be able to zero-rate sales of goods to EU businesses but will not be required to complete EC sales lists. Those UK businesses exporting goods to EU businesses will need to retain evidence to prove that goods have left the UK, to support the zero-rating of the supply. The required evidence will be similar to that required for exports to non-EU countries with any differences to be communicated in due course.
Individual EU member states may have different rules for import VAT for non-EU countries and import VAT payments may be due at the border when importing goods. UK businesses should check the relevant import VAT rules in the EU member state concerned.
If you choose to use the transit method, you should be aware of the following:
If you don’t use a specialist custom agent, you will need to buy specialist software to complete customs declarations or train staff to make declarations online using the National Export System (NES). You will also need to register for the New Computerised Transit System (NCTS).
You may wish to consider applying for authorised consignor status – which will enable you to start transit movement at your own premises rather than from a designated Office of Departure.
If you are not using a customs agent or your customs agent does not have a guarantee, you will need to contact a bank or financial institution about arranging a guarantee which HMRC will need to authorise, before it can be put in place.
If you are using a customs agent, they will need all the necessary information from you to complete a Transit Declaration and a combined Export and Exit Summary declaration. If you are not using a customs agent, you will need to register for both the New Computerised Transit System AND the National Export System. For each movement you will need to complete a combined Export and Exit Summary Declaration on NES, and complete a transit declaration on NCTS.
Whether you are using a Customs Agent or not, you will need to ensure the driver taking your goods has the Transit Accompanying Document (TAD) – provided either by you if you are an Authorised Consigner or from the Authorised Consignor who has agreed to make the Transit declaration on your behalf or the Local Reference Number – which they will take to the Office of Departure to get the TAD. You will also need to ensure the driver has any specialist goods licenses necessary.
If you are using ATA Carnet (for the temporary movement of goods):
- Apply for an ATA Carnet to avoid paying duties on goods moved temporarily into the EU
- Ensure the driver taking your goods has the ATA Carnet document for wet-stamping
If you need further information about importing and exporting goods after Brexit contact the Government’s helpline for cross border traders:
Imports and exports: Brexit enquiries
Telephone: 0300 3301 331
Monday to Friday, 8am to 6pm
The UK will no longer operate under the European Economic Area (EEA) regulations for the cross-border trade in services if there is a no-deal Brexit. This means UK businesses will no longer be treated as if they were local businesses. Instead, services provided by UK businesses and professionals will be regarded as originating from a ‘third country’. This means UK firms and service providers may face additional legal, regulatory and administrative barriers as a result.
If you are a UK business or professional providing services in the EU, Iceland, Liechtenstein, Norway or Switzerland, you will need to check the national regulations of the country you’re doing business in to understand how best to operate. See the selling services guides to each country for more information.
VAT is and will be payable on the sale of digital services. For UK businesses supplying digital services to non-business customers in the EU the ‘place of supply’ will continue to be where the customer resides. VAT on services will be due in the EU member state within which your customer is a resident.
Exporting digital services to EU consumers
If the UK leaves the EU with no agreement, businesses will no longer be able to use the UK’s Mini One Stop Shop (MOSS) portal to report and pay VAT on sales of digital services to consumers in the EU.
Businesses that want to continue to use the MOSS system will need to register for the VAT MOSS non-Union scheme in an EU member state. This can only be done after the date the UK leaves the EU. The non-Union MOSS scheme requires businesses to register by the 10th day of the month following a sale.
Alternatively, a business can register in each EU member state where sales are made. You can find further information about registering for VAT in EU member states on the EU Commission’s website.
Find out more about paying VAT on sales of digital services. at the GOV.UK website.
UK business will no longer have access to the EU VAT refund system. UK businesses will continue need to claim refunds of VAT from EU member states by using the existing processes for non-EU businesses.
This process varies across the EU and businesses will need to make themselves aware of the processes in the individual countries where they incur costs and want to claim a refund. Further information about claiming VAT refunds from EU member states is available on the EU Commission’s website.
UK businesses will be able to continue to use the EU VAT number validation service to check the validity of EU business VAT registration numbers The EU VAT Registration. UK VAT registration numbers will no longer be part of this service. HMRC is developing a system so that UK VAT numbers can continue to be validated.
Check if your professional qualifications are recognised by the appropriate regulator in the EEA country (or Switzerland) in which you intend to work.
You will need to check even if you are providing temporary or occasional professional services. Check the European Commission’s Regulated Professions Database (REGPROF) to find out if your profession is regulated.
You do not have to do anything if your qualification has already been officially recognised by the relevant regulator in an EEA country or Switzerland. The regulator’s decision to recognise your qualification will remain valid after the UK leaves the EU.
If your qualification hasn't been recognised, contact the single point of contact for each EEA country to find out how to get your professional qualification recognised. You can find out more information about individual countries in the selling services country guides. There are different rules if you are a lawyer or an auditor. Find out what to do if you are an auditor. Find out what to do if you are a lawyer.
In the event of a no deal Brexit, the UK would trade on World Trade Organisation (WTO) Most Favoured Nation (MFN) terms with the rest of the world (including the EU) unless the UK and counter parties have signed ‘trade continuity agreements’ by 31 January 2020. The purpose of these continuity agreements is to replicate existing trade terms as far as possible.
If you are trading with the following countries, trade will continue on the same terms as is currently the case, post 31 January 2020. This is because trade continuity agreements have been ratified or agreed in principle.
Papua New Guinea
Agreements have not been signed or agreed in principle with the countries outlined below. This means that post 31 January 2020, in a no deal scenario, trade with these countries will on the basis of WTO (MFN) terms.
Bosnia and Herzegovina
Staff, data and funding
EU Citizens in the UK pre-December 2020
If you are an EU/EEA or Swiss citizen already resident in the UK, have you applied to the Settled Status Scheme? (Irish citizens do not need to apply for settled status). You can see more details on the settled status scheme and how to apply on the GOV.UK website. If you are an Irish citizen you will not need to apply for the Settled Status scheme as the Government has committed to honouring the Common Travel Area. There is no cost attached to applying for the settled status scheme.
The UK Government will honour the right of those who obtain settled status under the scheme to be able to leave the country for up to five consecutive years without losing their right to return. EU citizens with settled status will be able to be joined by future spouses and partners (where the relationship was established after exit) and other dependent relatives until 31 December 2020, after which point the UK Immigration Rules would apply to such family reunion.
If you have staff who are EU/EEA/Swiss citizens and are already resident in the UK, the Government has confirmed the rights of EEA citizens working and living in the UK before the point at which we exit the EU, will be protected. This is effectively a unilateral commitment. Settlement rights (indefinite leave to remain) in the UK can be achieved through applying for the Settled Status Scheme.
The UK Government is making the commitment that, once granted, status under the scheme is secure. In the event of a no deal scenario, the UK will continue to run the EU Settlement Scheme for those lawfully resident in the UK by 31 January 2020. This means that any EEA citizen living in the UK by 31 January 2020 will be eligible to apply to this scheme, securing their status in UK law. They will have until 31 January 2020 to apply for status under the scheme. Irish citizens will not need to apply for the Settled Status scheme as the Government has committed to honouring the Common Travel Area.
The UK Government will honour the right of those who obtain settled status under the scheme to be able to leave the country for up to five consecutive years without losing their right to return. EU citizens with settled status will be able to be joined by future spouses and partners (where the relationship was established after exit) and other dependent relatives until 31 December 2020, after which point the UK Immigration Rules would apply to such family reunion
Employers must accept EU citizens passport or national identify card when asking prospective employees for evidence of their right to reside in the UK until 31 December 2020
Please see more details on the settled status scheme including how to apply.
For EU Citizens arriving in the UK post 31 January 2020
EU, EEA and Swiss citizens can continue to come to the UK for the purposes of short term visits for up to three months without the need for a visa/work permit.
EU/EEA and Swiss citizens will be able to live, work and study in the UK as they do now until 31 December 2020. After 31 January 2020, they will need to apply for a new status called European Temporary Leave to Remain (TLR) if they want to stay in the UK after the 31st of December 2020. The deadline for applications will be 31 December 2020. An individual will not be eligible for Euro TLR they are a serious or persistent criminal or a threat to national security. Irish citizens do not need to apply to stay in the UK, including after 31 December 2020, they will continue to have the right to enter, live, work and study in the UK under Common Travel Area arrangements.
The application for European Temporary Leave to Remain will be free of charge and the application will be available to complete online. This temporary digital immigration status will allow an individual to stay in the UK for 36 months from the date it is granted – assuming their application is successful.In terms of right to work checks, employers need to be aware of the following:
Until 31 December 2020: EU/EEA and Swiss citizens will be able to prove their right to work and rent property using their EU passport or identity card. An individual can also choose to use their digital status to show that they have European temporary leave to remain.
From January 2021: It will be necessary for EU/EEA and Swiss citizens to prove their rights by using the digital status provided via successfully applying for European Temporary Leave to Remain. European TLR will enable them to work in the UK, use the NHS, enrol in education or continuing studying and access public funds individuals are eligible for including benefits and pensions as well as travel in and out of the UK. They may also be able to apply under the future immigration system.
Non-EU, EEA or Swiss close family members of EU, EEA or Swiss citizens will be able to apply for European TLR. Close family members are spouses, partners and dependent children under 18.They will be able to apply once their EU, EEA or Swiss citizen family member has applied for European TLR. They will apply in the same way as EU, EEA and Swiss citizens but will need to provide additional information.
Immigration from the EU in the longer term
The previous administration published a White Paper in December 2018 outlining proposals for a non preferential immigration system based on skills and employer sponsorship system. Essentially, this is a single immigration system that treats EU countries the same as non EU countries.
The UK is also looking to introducing e-gate visa checks for tourists and visitors coming to the country for short stay business trips from all low risk countries. The new administration had indicated its commitment to an Australian points based system and has asked the Migration Advisory Committee to look further at this option. It is our assumption that such a system would need to be phased in and therefore it is possible that freedom of movement or something very close to this would effectively continue in the short term, in the event of a no deal scenario, as there would not be sufficient time to put a new immigration system in place at the point at which we leave the EU.
What is personal data?
Personal data is any information that can be used to identify a living individual, such as their name, their physical/IP address, or HR data such as staff working hours and payroll details. For example a UK company which receives customer information from an EU company, such as names and addresses, to provide goods or services.
If the UK leaves the EU without a deal, UK businesses and organisations will still need to be compliant with data protection law. There will be no immediate change to the UK’s data protection standards, the General Data Protection Regulation (GDPR) will be brought into UK law and the Information Commissioner would remain the UK.
What you need to think about
If you export personal data to the EEA
If you only ‘export’ personal data from the UK to the EEA, you do not need to take any action.
UK businesses and organisations will continue to be able to legally send personal data from the UK to the EEA and 13 countries deemed adequate by the EU. There is no need to take preparatory action to continue sending personal data out of the UK to the EU/EEA.
If you receive personal data from the EEA
If you do, you should review your contracts and, where absent, include standard contractual clauses (SCC) or other alternative transfer mechanisms (ATM) to ensure that you can continue to legally receive personal data from the EU/EEA.
There may be additional actions that some organisations need to take. The Information Commissioner’s Office (ICO) has further guidance your business or organisation should follow to prepare for Brexit and a handy tool to help you understand what to do.
If you need further information about personal data and sharing information in the event of a no deal Brexit you can find further guidance on the GOV.UK website.
Many small businesses directly or indirectly benefit from EU funding. The UK Government has provided a guarantee of funding for all of the below:
- The full 2014 - 20 Multiannual Framework (MFF) allocation for Structural and Investment Funds (ESIF) and European Regional and Development Funds (ERDF). New bids for funding under the ERDF, ESF (European Social Fund) and European Territorial Co-operation Projects, post exit day will be guaranteed by the Government until the programme closes at the end of the MFF.
- The payment of awards where UK organisations successfully bid directly to the European Commission (e.g. through projects such as Horizon 2020) on a competitive basis until the end of 2020.
- The payment of awards for successful bids where the UK organisations are able to participate as a third country in competitive grant programmes from exit day until the end of the programme. This includes the SME instrument in Horizon 2020.
The government’s Brexit plan suffers defeat in the House of Commons
The Government loses the ‘Meaningful Vote 2’
Parliament vote to extend Article 50
The Commons debates and votes on eight indicative votes, in an attempt to find a Brexit plan that wins the support of the majority of MPs. All options are defeated.
The Government loses the ‘Meaningful Vote 3’
The UK votes in the European Parliamentary elections
Cross party talks breakdown
Theresa May announces her resignation
- Theresa May gives her Lancaster House speech setting out the Government’s Brexit plan
- FSB releases new research on the impact of Brexit
- Government publishes European Union (Notification of Withdrawal) Bill
Government publishes Brexit White Paper setting out its strategy for the UK’s departure from the EU
- The European Union (Notification of Withdrawal) Act receives Royal Assent
- Prime Minister triggers Article 50 of the Treaty on European Union
- FSB releases first of its Brexit reports looking at trade post Brexit
- Government publishes Great Repeal Bill White Paper
- Prime Minister calls a General Election – to be held on 8 June 2017
- FSB launches second of its Brexit reports exploring firms' access to labour and skills
- FSB launches 2017 General Election Manifesto
- FSB launches third of its Brexit report on EU funding
- General Election results in a hung Parliament, with the Conservatives winning the most seats and Theresa May forming a government
- First round of UK-EU exit negotiations begin.
- Chancellor gives Mansion House speech on Brexit
- Queen’s speech given
- FSB responds to Prime Minister’s state on EU nationals
Government introduces the European Union (Withdrawal) Bill
- The Prime Minister delivers key Brexit speech in Florence, setting out the UK’s position on moving the Brexit talks forward
FSB calls for Brexit-ready Autumn Budget
Government outlines plans for a Withdrawal Agreement and Implementation Bill
- EU Referendum held with the leave vote winning with 51% of the vote
- David Cameron resigns as Prime Minister
- FSB sets out agenda for EU negotiations
Theresa May confirmed as new Prime Minister