How to Prepare Your Business for Brexit, Part 2
Posted on 18th November 2020 at 15:00
Even though the UK left the EU on 31st January 2020, the Transition period runs until 31st December. As a result, there may be some changes that your business needs to put in place very soon.
In our first instalment we looked at staff, recruitment and cash flow, and this time we’re focusing on taxation and business insurance.
It’s just been announced that the EU vote on whether or not there will be a Brexit deal could be postponed until 28th December 2020. As a result, it’s currently uncertain how import VAT will be affected, but we do have an idea in the meantime.
In the event of no deal, the UK will introduce postponed accounting, which is the system that’s already used for intra-EU trade. Namely, there’s no need to pay VAT at the border, with the only difference being on VAT for parcels valued up to and including £135. As soon as we know more we’ll share information on our social media channels, so make sure to follow Aaron on LinkedIn for the latest updates.
According to the Association of British Insurers, any business that stockpiles goods should check with their insurance adviser that the policy is still suitable. This is because there’s often a limit on commercial contents policies in regards to the amount of stock kept on a site (e.g. to prevent a fire risk). The same goes if you keep your goods in other premises, such as hired storage facilities – ask the provider to confirm that their own insurance remains valid for the volume of materials you store.
Your insurance policy may also be affected if you’re currently transporting more stock than before or plan to in the future. In addition, you should make sure that your commercial motor and/or goods-in policy is still up to the task.
Hopefully your insurance policies won’t be affected, but we’re sure you’ll agree that a little extra admin for complete peace of mind is a wise investment of time.
VAT registration in the EU
Businesses that trade physical goods and store stock in any EU country need to register for VAT there. For example, if you have a large customer base in France and hire a storage facility there to make delivery a faster process, you need to be registered for VAT in France specifically as well as in the UK.
Some EU countries are also requiring UK businesses to have a Fiscal Representative who is jointly responsible for any VAT your business is liable to pay. If you need further advice on this, please do get in touch. We can also help you to determine which country would be best suited to supporting your EU supply chain, which banks to use, and how to ensure continued cash flow if additional operational costs come into effect.
Next week we’ll share our third and final piece on how Brexit might affect your business. If you can’t wait that long, call our Yorkshire office on 01482 235575 or our London office on 0207 885 0605. Alternatively, you can fill in our contact form and one of our finance specialists will get back to you right away.
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