The European Union has published a summary of the key implications of the trade agreement between the UK and the EU. As the summary notes, despite the trade agreement, there will be significant changes from 1 January 2020.
Some of the key points are listed below.
Note, however, that given the complexity of the terms of agreement, that it is strongly advisable for any business trade between the UK and the EU to seek expert advice as the new partnership unfolds.
Zero tariffs agreed
In an important breakthrough for post-Brexit UK-EU trade, the agreement states that there will be zero tariffs and zero quotas on all goods. Tariff-free access to the EU will be a welcome relief to many UK firms.
An end to passporting rights for financial services
Tariff-free trade of goods is welcome news for British industry. However, the news is less clearly satisfactory for UK firms providing services to clients in EU countries.
UK Chancellor Rishi Sunak had previously stated that UK firms would be able to reclaim VAT on financial services provided to the EU. However, it had not been clear whether UK financial services firms would continue to benefit from EU passporting rights.
Confirmation has now been given that UK firms will no longer benefit from passporting rights for financial services.
However, Sunak has suggested future negotiations could potentially improve access to the EU for financial services firms based in the UK.
The UK will no longer be part of the Customs Union. Checks will now be imposed on goods traded between the UK and EU.
Ensure you are compliant, now and in the future
Brexit was always going to produce far-reaching changes. The agreement confirms that businesses conducting trade in goods and services will be faced with significant new obligations.
Importantly, the trade of goods between the UK and EU is now subject to stringent new guidelines.
Crucially, UK firms providing financial services to EU clients will in many cases be need to register for VAT in an EU jurisdiction.
In addition, as Chancellor Sunak’s comments suggest, it is possible that further negotiations could lead to new provisions.
Vatglobal is carefully monitoring all new developments to ensure your business is fully VAT compliant under the new Brexit terms.
Give us a call to find out how our technology-driven expertise can help your business effectively adapt to change.