Brexit came as a surprise in 2016. No one in the whole United Kingdom ever thought it would go forward, but the referendum said otherwise and the Brexit Deal had some restrictions especially to companies, foreigners or not.
Many known companies decided to close their factories and move outside the UK and into the EU, making several families unemployed and cities with a higher rate of unemployment like it wasn’t seen since the 80s. Cities like Swindon for example, which relied entirely on the industry and manufacturing. But How did all this started and how can companies work with the UK and how Uk companies can work with the EU now? Let’s check the facts.
How it all started
When in 1963 the UK asked the already formed European Union, composed by Italy, France, West Germany, the Netherlands, Belgium and Luxembourg, the French President General Charles de Gaulle vetoed the application. Former french Prime Minister, Edith Cresson said: “He had a lot of experience of the British and he always thought that they’d be on the Americans’ side… so I don’t think he believed that they’d play the game of Europe”.
The United Kingdom eventually entered the European Union in 1973, but 2 years after it they were already thinking of backing up.
There was a referendum in 1975 asking the people if they should remain in EU, which 67% said YES.
Tension arises again in 1984 with Prime Minister Margaret Thatcher wanting to reduce the EU payments. In the 80’s, UK was the 3rd most poorer country in the EU and was paying 20% to the EU Budget. Thatcher’s rebate was still in place till today with 12%.
With many fights between the UK and EU, the most known were Beef and even Chocolate (which was only to be traded from the Uk to Europe from the 2000s).
In 2011, with now James Cameron as Prime Minister, he was the first prime minister to veto an EU Treaty. He then said that if we was to be re-elected in 2015, he would make a new deal with the EU which would renegotiate the UK-EU relationship, including changes in migrant welfare payments, financial safeguards and easier ways for Britain to block EU regulations. When he won in 2015, he then set the date for the referend which would be know as Brexit.
in the UK, the independent party and Brexit favouring, UKIP, was growing among British voters.
On June 23rd, Brexit won by a slim 51.9 percent to 48.1 percent margin, with the referendum turnover of 71.8% of voters and more than 30 million voters. In the voting was noticeable the discrepant opinions inside the UK. From Northern Ireland and Scotland asking to Remain, while England and Wales voting majority to Leave.
What is the Brexit Deal
Brexit means the withdrawal of the United Kingdom from the European Union, and the European Atomic Energy Community (EAEC or Euratom) at the end of 31 January 2020. To date, the UK is the first and only country formally to leave the EU, after 47 years of membership.
Pros and Cons on the Brexit Deal
The reality is that there are subjects that we cannot distinguish as Pros or Cons with the Brexit Deal.
For example the Membership Fee: Brexiteers said that with Brexit would result in an immediate cost savings. In 2016 the UK paid the EU £13.1bn, it also received £4.5bn worth of spending. But what about free trade and inward investment? 50% of UK exports go directly to the EU.
But let’s make a list of Pros and Cons, following Official UK Government website:
- 100% tariff liberalisation. This means there will be no tariffs or quotas on the movement of goods produced between the UK and the EU. This is unprecedented and the first time there aren’t any quotas in the EU partnership.
- UK Services like Legal and Financial, will not face any barriers from the EU, and have full mobility in the EU.
- UK has full sovereignty over fishing waters. Prime Minister states that their fishing fleets and quotes will increase in the next years.
- The agreement is based on international law, not EU law. There is no role for the European Court of Justice and no requirements for the UK to continue following EU law.
- The EU State Aid regime ended, meaning that Great Britain will introduce introduce their own subsidy system to support businesses and industry.
- Arrangements for airlines and hauliers to provide them with certainty and gives people the ability to travel to and from the EU easily.
- Social security agreement that benefits UK citizens including accessing healthcare when travelling in the EU.
- Freedom to work and live between the UK and the EU changed, and in 2021, UK nationals will need a visa if they want to stay in the EU more than 90 days in a 180-day period.
- Even though there aren’t tariffs or quotas, borders will be more strict. For some countries, in example Portugal and Spain, their customs will retain any good if above £150 of the final invoice. This will make shopping between countries lesser and/or companies will need special requirements in import and export.
- On the other hand, goods entering the UK, will face customs taxes if above £390 worth.
EU travellers bringing more than £10000 will need to declare it.
- The cost of Red Tape went overboard. Red Tape means official rules and processes that seem unnecessary and delay results. An excess of bureaucracy that has an annual direct cost of new tariffs and non-tariff barriers around £27 billion for UK firms (equivalent to 1.5% GVA) and around £31 billion for EU27 firms (equivalent to 0.4% GVA).
Import and Export
Five industry sectors will shoulder around 70 percent of the costs. With industries like financial services clustered in London, in the UK, and automotive production and manufacturing in Bavaria, in Germany, some regions will feel the effects more than others.
There are some basic rules for import or export, some of them changed with the Brexit Deal, other remains the same:
- Get an EORI number:
If you’re from the UK, you’ll need an EORI number from an EU country, if your business will be making declarations or getting a customs decision in the EU. Get this from the customs authority in the EU country where you submit your first declaration or request your first decision. If you’re from the EU, you need an EORI number from the UK.
- Get your business ready to Import and Export:
- You can hire a person or business to deal with customs for you, such as:
freight forwarders, customs agents or brokers, fast parcel operators.
- What they can do for you (and who will be liable) depends on: the services they provide what you want them to do, the commercial agreement you have with them.
- They can act for you either as a: direct representative or Indirect representative.
- They cannot act on your behalf without written instructions from you. If you need help in legal documents and translating it to the country you need to export on import, make sure you use a good quality translation company that is professional and can focus on that subject.
- Check if your business and the business sending you the goods can export for Europe and to the UK:
Your business or the business sending you the goods may need: to make an export declaration in their country licences or certificates to send goods to the UK
Check whoever is sending the goods is able to export them from their country.
- Find out the commodity code for the goods
You’ll need to include the commodity code on your import or export declaration. This will determine the rate of duty you need to pay and if you need an import and export licence.
You’ll need to include the commodity code on your import declaration.
Your customs agent or transporter might be able to help you with this.
- Work out the value the goods
When you make your import declaration, you’ll need to include the value of your goods – this helps work out how much duty and VAT you’ll need to pay.
- Find out if you can delay or reduce your duty payment
If the UK has a trade agreement with the country you’re importing from, you may be able to pay less duty or no duty on the goods (known as a ‘preferential rate’).
You may also be able to delay or reduce the amount of duty you pay based on what the goods are from and what you plan to do with them.
- Check if you need a licence or certificate for your goods
There are special rules and you, or the company that exports to you, may need to get licenses or certificates for any of the following:
- animals and animal products
- plants and plant products
- high risk food
- veterinary medicines
- human medicine
- controlled drugs
- tissues and cells for human application
- products containing F gas
- precursor chemicals
- hazardous chemicals
- nuclear material
- guns, knives, swords and other weapons
- weapons and goods that could be used for torture or capital punishment
- Check the labelling, marking and marketing rules
Check the marking, labelling and marketing standards for food, plant seeds and manufactured goods.
- Claim a VAT refund
If you’re VAT registered, you can claim back any VAT you paid on the goods you’ve imported. In the UK, you’ll need your Import VAT Certificate (C79).
- Keep invoices and records
You must keep records of commercial invoices and any customs paperwork, including your Import VAT Certificate. If you imported controlled goods, for example firearms, keep any paperwork that shows who owns them.
Brexit changed a part of Import and Export between the UK and the Rest of the World. Not only for Europe but also for a lot of countries that had a close relationship with Europe and the UK. The Brexit Deal, fortunately, came in as a surprise for industry, the import and export rules changed little but it was dealt in a proficient way with both parties staying basically the same.
How did it change and affect your company? Did the goals and objectives of your company or employers change with the Brexit Deal? Let us know on our social media as well.