What Brexit means for your business
Following Brexit, there are some major changes that could affect how you run your business, from importing and exporting goods to hiring employees. Here’s what you need to know.
Changes to importing and exporting goods
The rules that apply to the UK business from England, Scotland and Wales when importing and exporting goods to and from the EU are now the same as those that apply when importing and exporting to and from the rest of the world.
Northern Irish business can continue to operate when importing and exporting goods as
before in alignment with the EU, based on the Northern Ireland protocol.
English, Scottish and Welsh businesses will need to pay duty on their imports and have considerably more administration when importing goods from the EU. There will also be more admin for UK businesses when exporting goods.
You’ll also need to apply for an EORI number to import or export goods to or from the EU.
Postponed VAT accounting
There are changes to import VAT with the introduction of Postponed VAT accounting, which affects how your VAT Return works. Postponed VAT accounting creates a positive cash flow when importing goods from any country outside of the UK. It also applies to Northern Irish companies when importing goods from countries outside of the EU.
Postponed VAT accounting was originally used in the 1980s. It means that input VAT can be paid and reclaimed on the same return, so input VAT is added to box 1 and box 4 meant that there no effect on the VAT liability due. The system prior to Brexit meant that when importing goods from outside of the EU that businesses would have to pay import VAT upfront and wouldn’t be able to reclaim the VAT until the submission of their VAT Return.
Employing EU citizens
If your employees are EU citizens, they will have until 30 June 2021 to apply for settled status. This will give them permission to continue living in the UK, as long as they were doing so by 30 December 2020. So, between now and then nothing will change for you as an employer. You just need to check their right to work status in the same way as you would before Brexit.
If you want to hire a new employee who is an EU citizen that lives abroad, things get a bit more complicated. Now, EU citizens moving to the UK for work will need to apply for a visa, and will need a job offer from an approved employer sponsor. So, if you want to employ EU citizens who plan to move to the UK to work for you, you’ll need to apply to become an approved sponsor.
Managing personal data
If you hold data on EU citizens on a UK server and you’re affected by GDPR guidelines and are following them correctly, for now you won’t need to make any changes.
Managing your finances
With Bokio’s free accounting software, you can do your bookkeeping, invoicing, and manage your expenses all in the same place. We also will handle the majority of the Brexit VAT changes for you when you do your accounting.
We have everything you need to help you prepare for your Self Assessment tax return, submit your VAT Return for Making Tax Digital and keep the right financial records. If you need an extra hand, we can help you fin.
Accounting is kept simple with Bokio, so you have more time to spend running your business.