At Modulr, we design our accounting payments technology to save accountants time. So, in that same vein, we’ve pulled together a handy list of how accountants can prepare their practices and clients for the post-Brexit road ahead, with all the extra deadlines that inevitably entails.
At the end of 2020, more than four years after the Brexit vote, the UK finally agreed a trading deal with the EU. This now gives accountants and their businesses much needed certainty about how companies can continue to operate and trade with their European counterparts and buy and sell goods and services.
While this new trading relationship came into effect from 1 January 2021, it was estimated in September that only a quarter of businesses were ready for Brexit. Therefore, accountants need to take the opportunity to communicate new legislation and requisite actions to clients promptly.
This will help businesses ensure that their operations and supply chains face minimal disruption and provide accountants with the opportunity to offer advice around growth opportunities.
Importing/exporting goods between the UK and the EU
EORI
Businesses exporting or importing goods to and from the UK will need to apply for a UK Economic Operator Registration and Identification Number (EORI). This is a unique code used to track and register customs information in the EU.
Forms can be filled in electronically on the Gov.uk website and take around seven days to process. Confirmation and assigned numbers are sent via email.
There are three types of EORI numbers available, with businesses needing to select the most appropriate based on their location and the countries they export to in the EU. Accountants should fill in forms with their clients to ensure they are accessing the category relevant to them.
Help businesses find a third party to manage customs
Leaving the EU means that many UK businesses will have to deal with customs declarations for the first time. This is a particularly complicated area, especially if you do not already have related experience.
Requirements include entering data into HMRC’s customs system relating to the value and origin of goods. This will often have to be sent to HMRC with specialist software.
Accountants should work with their clients to ease the admin burden by identifying a third-party company to complete declarations. HMRC’s directory can be used to identify the most relevant intermediary for businesses.
Over the longer term accountants may choose to develop customs as a specialism and service in its own right.
Business travel to the EU
Passports
Individuals travelling to the EU for business must have at least six months left to run on their passports. If passports are due to expire sooner, they will need to apply for a new one.
Applications can be completed online and will take up to three weeks to process. If a renewal is needed urgently for work purposes, businesses should call the Government’s Passport Adviceline.
Travel insurance
Following Brexit, the European Health Insurance Card (EHIC) is being phased out and is being replaced by the Global Health Insurance Card (GHIC).
Holders of EHIC cards yet to expire should still be able to use them. GHIC cards can be applied for free via the NHS website.
Both types of card provide the same medical treatment that locals would receive in any European Union country. While they can be handy to use in an emergency, businesses should also be advised to take on comprehensive private travel insurance, particularly in the context of Covid, to provide comfort and additional cover.
Employing EU Citizens
EU citizens coming to work in the UK
From 1 January 2020 EU citizens coming to work in the UK for the first time will need a visa. To do this, employers will need a sponsor licence (with fees applying for each person employed) and assign an individual within their company to manage the sponsorship process.
Accountants can help clients manage this process and act as witnesses for applications and supporting documents in certain circumstances.
EU settlement scheme
Existing EU employees who do not have British citizenship will need to confirm their status to continue work in the UK by applying for settlement status by 30 June 2021.
Employees will need to process applications, which are free, themselves so their companies should be told to flag this for relevant staff instead of becoming directly involved in completing online forms.
Changes to VAT
Say goodbye to EC sales lists
For periods beginning 1 January 2021 VAT registered UK companies will no longer have to fill in EC sales lists if they are selling overseas to customers in the EU.
These goods will still be treated as zero-rated, but businesses will need to retain evidence to document that they have left the UK.
Importing goods from the EU
The treatment of importing goods from non-EU countries will now also need to be applied to imports from the EU but with a few changes.
To ease the burden businesses will be able to apply postponed accounting for import duty on goods bought into the UK. This will put less pressure on their cash flow as VAT import values can be included on VAT returns instead of paying when the goods arrive at the border.
Changes to the sale of digital services to the EU
UK VAT registered businesses selling digital services, such as Apps, to the EU who were using VAT MOSS (allowing them to register once but sell to the whole of the EU) will instead need to apply for the VAT non-union scheme in an EU member state.
This will allow them to continue to sell to EU countries and charge their respective VAT rates.
The VAT MOSS non-union scheme registration must be completed by the 10th of the month subsequent to businesses generating their first sale after the UK leaves the EU. Therefore, if a company makes its first sale in January, they must register by 10 February 2021.
Accountants need time saving technology
While accountants have their work cut out communicating Brexit changes to businesses, digital technologies, such as Modulr’s payments dashboard can lessen their workload. The dashboard brings all client financial data into one place, with accountants freeing up their time by leveraging the very best in technology and financial access.
This time saving can be utilised to deliver services which technology can’t, such as advising on the new Brexit norm. We also prepared for Brexit and continuing to carry out payment services in the EU through our licence from the Central Bank of Ireland.
