Business after Brexit: a quick guide

Brexit has become a reality. How to run a trading business in the UK in 2021?

From January 1, 2021, new trade rules dictated by Britain's exit from the EU come into force. They will affect all British joint stock companies and individual entrepreneurs who supply their goods by mail or export them to EU countries.

The trade law changes are generally good news for UK companies: their work and information exchange with the EU will be simplified, and VAT will be eliminated on many goods supplied to the EU.

For whom have the rules changed?

Let us say right away that no changes are expected for existing companies and partnerships that operated without a VAT and EORI number. Companies already registered in England and Wells, Scotland or Northern Ireland will not notice the transition - their status and protection under British law will not change.

You have nothing to worry about unless your company supplies goods to EU countries or sends them there by post, or exports goods temporarily from the UK to the EU.

However, if your UK company exports goods to the EU, then you may need to take some steps to comply with changes in legislation.

In any case, there is no reason to worry: many years of experience of stable operation under the jurisdiction of Great Britain shows the exceptional predictability and stress resistance of this system for business and investment.

Do you need an EORI number?

If you have previously exported goods to non-EU countries, then an EORI number was a requirement. Starting from January 1, 2021, it is also needed for export to the European Union. However, it must now begin with the letters “GB” - if not, then it will have to be changed.

Most likely, you will not need an EORI number at all if you only provide services to European clients - for example, legal advice or marketing support.

We advise you to think about registering a number directly in the EU if your company does not operate in the UK, does not transport goods across the border, but trades them in the EU.

Zero VAT rate

From 1 January 2021 you can avoid charging your customers VAT on most goods exported to the EU. For them, this will translate into a lower transaction cost, since you no longer need to include VAT in the price of your goods.

What will be the impact of your tax resident status?

The short answer to this question is nothing. Your business will not be affected by the fact that Britain has left the EU, regardless of whether you are resident in the UK, an EU member state or a non-EU country.

You can be sure of this as hundreds of companies registered in the UK are owned or managed by people who do not reside in the UK. Many international corporations have offices in different countries around the world or at Companies House.

If you have questions and need financial and legal support for your business, please contact our experienced specialists.