EU-UK: Consequences of Brexit for businesses: A birds' eye view
Brexit has resulted in significant changes in the way goods are moved between the EU and the UK (Great Britain), argues Arne Mielken of Customs Manager Ltd.
The UK left the EU on 1 February 2020. Since 1 January 2021, the United Kingdom no longer participates in the EU's
Single Market and
Customs Union,
Union policies and programmes.
Union’s international agreements, like Free Trade Agreements
"It is essential that all stakeholders be made aware of this, and that they ensure their readiness for these broad and far-reaching changes, which will arise under any scenario, regardless of the outcome of negotiations between the European Union and the United Kingdom. There is no room for complacency or postponing readiness and adaptation measures in anticipation that an agreement would ensure continuity because numerous changes will be inevitable".
Message by EU Commission in 2020
Trade Barriers
The United Kingdom’s withdrawal from the EU, the Single Market and the Customs Union created barriers to trade and cross-border exchanges that did not exist prior to 1 January 2021. But what changes exactly?
The EU has produced a detailed report.
Is my company affected?
The UK’s withdrawal from the EU affects your company if:
it sells goods or supplies services to the UK
it buys goods or receives services from the UK
it moves goods through the UK
it uses UK materials and goods to trade under preferential schemes with EU partner countries.
What about the EU-UK TCA?
On 24 December 2020, the EU and the UK reached an agreement on the terms of their relationship following the UK’s withdrawal from the EU.
The Trade and Cooperation Agreement was signed on 30 December 2020, was applied provisionally as of 1 January 2021 and entered into force on 1 May 2021.
The EU-UK Trade and Cooperation Agreement concluded between the EU and the UK sets out preferential arrangements in areas such as trade in goods and in services, digital trade, intellectual property, public procurement, aviation and road transport, energy, fisheries, social security coordination, law enforcement and judicial cooperation in criminal matters, thematic cooperation and participation in Union programmes. It is underpinned by provisions ensuring a level playing field and respect for fundamental rights.
For the trade of goods, it provides for zero tariffs and zero quotas on all trade of EU and UK goods that comply with the appropriate rules of origin.
Supply Chain disruptions persist
Yet, even the TCA did not end supply chain disruptions.
This is because the TCA by means matches the level of economic integration that existed while the UK was an EU Member State.
The consequences of Brexit for cross border businesses, in particular, those trading goods across the EU and Great Britain (GB) were, as we can now see, unavoidable, broad and far-reaching, even with the EU-UK Trade and Cooperation Agreement in place.
What is the impact on cross-border trade?
For the purposes of customs, the UK is now treated as any other non-EU country. In particular, customs procedures and formalities apply to trade between the UK and the EU. This means concretely for businesses, at high level
Businesses may need to file customs declarations when importing or exporting any goods to/from Great Britain (the UK, excluding Northern Ireland) or when moving your goods through Great Britain.
They may need to provide security and safety data, in addition to the customs declaration.
They need a special licence to import or export certain goods (e.g. waste, certain hazardous chemicals, GMOs).
They need to comply with additional formalities if importing or exporting excise goods (alcohol, tobacco, or fuel) to/from Great Britain.
They will have to comply with different VAT rules and procedures for transactions with Great Britain than for transactions within the EU and with Northern Ireland.
Northern Ireland is a special place
However, in accordance with the agreed Protocol on Ireland and Northern Ireland, EU customs rules and procedures generally continue to apply to goods entering and leaving Northern Ireland.
Download the Guidance
Where to find more help and support
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