Brexit Deal: what we know
The UK government has announced that it has finally reached a deal with the EU in respect of the mutual trading arrangements, amongst other aspects of the ongoing relationship, from 1 January 2021.
Under the agreement, goods originating from the UK or the EU will not be subject to tariffs, thereby providing for ‘free trade’ between the territories. The question of where goods originate from will therefore be very important, particularly where goods are assembled in the UK where the component parts may have been imported.
As expected there are exceptions and special rules for certain categories of goods ranging from medicines to motor vehicles.
Changes to trade
Whilst there may be ‘free trade’ between the territories, it does not mean that trade will continue as it did pre-Brexit. Importantly, whilst tariffs may not be applied, businesses will be required to complete import/export declarations for movement of goods. There could also be delays due to customs checks at the border which were not previously required.
Businesses will also need to consider the need to register for VAT in an EU territory to facilitate ongoing trade, particularly if selling directly to consumers.
Going forward the UK will no longer be required to follow EU law. Great Britain will also be free from the EU state aid regime, allowing the government introduce targeted subsidies and incentives as it sees fits.
No doubt it will take businesses some time to adapt to the new trading arrangements and we will have to wait to see what the practicalities look like.
UK financial businesses lose their access to EU customers (many larger firms have already established subsidiaries within the EU to continue access). In addition, whilst the UK has granted EU businesses temporary permission to continue servicing UK customers, there is no reciprocal EU agreement for UK businesses as yet.
We expect regulatory discussions about “equivalence” in 2021 and hopefully, an arrangement whereby UK firms will get access to EU customers.
UK nationals will need a visa for stays longer than 90 days in a 180-day period and there will be new procedures for UK travellers at EU borders. European Health Insurance Cards, (EHIC) cards will remain valid until they expire. Mobile roaming charges may change so if you are using your phone abroad check with your plan provider first.
Find out more with our fact sheet
We have produced a fact sheet that covers the key points to take-away from the Brexit Deal.Read more about the Brexit Deal
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