After months of negotiations, the UK and European Union finally agreed a deal that will define their future relationship, which has come into effect as of 1st January 2021. The deal contains new rules for how the UK and EU will live, work and trade together.
For some clients, little may change, but there are a number of new regulations and requirements that are important to be aware of.
We have put together some commonly asked questions and outlined key areas that will likely impact our clients. This list is by no means exhaustive and if you would like to have an extended discussion about your own circumstances, please get in touch – our partners are here to support you.
What has changed for foreign citizens considering a move to the UK?
From this month there is a new points-based system for all foreign citizens (except Irish nationals) wanting to move to the UK.
People wanting to move to the UK to work, live or study will have to apply and pay for a visa. Proposed costs are £348 to apply for a student visa from outside the UK, or £475 to extend or switch one from inside the UK.
Applying for a visa as a skilled worker will cost between £610 and £1,408 per person – unless an individual has skills the country is short of. People applying for visas will also have to pay a health surcharge of £624 per person per year, unless they are healthcare workers.
Do EU citizens living in the UK still have the same rights?
Yes, citizens from the EU, Iceland, Liechtenstein, Norway or Switzerland living in the UK on 31 December 2020 will have the same rights until 30 June 2021.
The rights of Irish citizens will not change.
I have a professional qualification, does this still stand?
There will no longer be automatic recognition of professional qualifications – people will need to check each country’s rules to make sure their qualifications are still recognised.
What taxes are there for cross border trading?
The UK and the EU have agreed there’ll be no taxes on each other’s goods when they cross borders and no limits on the amount of Goods that can be traded.
Will businesses have to make new customs declarations?
Yes, traders in England, Wales and Scotland will need to make customs declarations as if they were dealing with countries elsewhere in the world – this means a lot of paperwork. We will over a period of time compile a list of documents ( via VAT department). Some products, including plants, live animals and some foods, will also need special licences and certificates. Others will have to be labelled in specific ways.
Is there a change to trading beyond Europe?
The UK is continuing to negotiate separate Trade agreements with the rest of the World. Some agreements such as Japan and Singapore have already been announced.
What does delivered duty paid mean?
Delivered duty paid (DDP) is a delivery agreement whereby the seller assumes all of the responsibility, risk, and costs associated with transporting goods until the buyer receives or transfers them at the destination port.
From 1 January 2021, anyone selling goods to consumers or businesses between the UK and EU faces import VAT, potential tariff charges and customs declarations for the first time.
Is there now a border between Northern Ireland and the Republic of Ireland?
The UK and EU have agreed to keep an all-but-invisible border, without checkpoints, between Northern Ireland and the Republic of Ireland (which remains in the EU). Effectively they have moved the border into the Irish Sea!
Will Northern Ireland operate under EU rules?
Northern Ireland will continue to follow many of the EU’s rules, meaning that lorries can continue to drive across the border without having to be inspected.
So new checks will be needed on certain goods arriving into Northern Ireland from the rest of the UK (England, Scotland and Wales) instead.
What tariffs are there for trade between Great Britain and Northern Ireland?
An agreement has also been reached to eliminate tariffs – extra charges on goods – for most trade between Great Britain (England, Scotland and Wales) and Northern Ireland. Some new paperwork will nevertheless be required from 1 January and businesses will need to be ready for the changes.
How has GDPR changed following Brexit?
The UK now has full autonomy over its data protection rules and is no longer obliged to comply with EU standards of data protection, but data will continue to be exchanged in the same way for at least 4 months (extendable to 6 months) as long as the UK doesn’t change its data protection rules.
Will treaty benefits continue post-Brexit?
From 1 January 2021 the UK will cease to be treated as a EU member state for the purposes of other EU territories applying EU directives. The availability of Treaty benefits is not automatic. Please get in touch with your HW Fisher contact if you are planning to make any payments of interest or royalties to EU residents as you will be required to file the relevant application for Treaty benefits with HMRC.
Will tax change on interest, royalties and dividends?
The tax treatment of interest, royalty and dividend payments from the EU to the UK will be dependent upon the domestic law of the source country and the relevant double taxation treaty between that country and the UK. Although the UK has an extensive treaty network, some treaties including those with Italy, Portugal and Germany offer a less favourable outcome than has been the case under the EU directives.
The UK is likely to renegotiate some of its tax treaties, particularly those with less favourable terms. This is something we are monitoring closely, and if you have any questions please get in touch.
Will cross border mergers still be possible?
From 1 January 2021, cross border mergers involving companies incorporated in the UK will no longer be possible. There should be no retrospective taxation of past transactions.