There are more Brexit changes on the way, so it’s time to get your clients and their businesses prepared for what’s coming next. We give you the lowdown on everything that’s changing.
What has happened so far?
Brexit has been having an impact on how businesses operate for over a year and we’ve already talked about how post-Brexit trading regulations have affected small businesses and supply chains.
But with the new year came a new set of regulations and challenges – with potentially more on the way in the future.
On the 1st January 2021, the UK formally left the transition period between voting to leave the EU and legally doing so.
Overnight, many businesses importing from and exporting to the European Single Market faced additional administrative challenges, such as having to prove certain standards were met in the production of goods.
Many businesses weren’t fully prepared to deal with the full amount of EORI codes, commodity codes, licenses and certificates needed to continue operating, meaning that these changes were partly the reason why consumers experienced shortages in many kinds of goods.
Changes to how businesses paid VAT further complicated matters. While many businesses were able to reclaim VAT further down the line, more paperwork about paying VAT had to be submitted to HMRC – something many businesses struggled or failed to do.
With so many new bureaucratic hurdles to overcome, both small and large businesses struggled to operate smoothly.
What changed in January 2022?
These challenges caused disruption but were only the first set of new regulations businesses needed to adjust to. On the 1st January 2022, more comprehensive regulations came into force, with more to follow in the coming months.
Recognising that businesses were facing significant challenges, the UK government decided to delay the implementation of full customs declarations, meaning that businesses only needed to produce some paperwork at the border.
This delay has expired, meaning that businesses must now produce the full amount of customs declarations on all goods.
As part of these changes, any businesses that trade goods that come with specific regulations over the protection of people and animals from diseases and infections – SPS goods – must now fill in extra paperwork, impacting supermarkets in particular.
What changes were due to be made?
More changes had been due to be implemented in January, but following evidence that thousands of businesses were unprepared for the full scale of the adjustments, some of these were delayed.
Delayed changes including the need for export health certificates, SPS certificates and physical checks and safety and security declarations on imports have been pushed back from January to 1st July, meaning that not only have businesses already been impacted by new customs declarations, they may also face some new, important regulations in a matter of months.
With a new round of challenges to be overcome in July 2022, some businesses need to be equally prepared for a new set of rules on 1st January 2023.
What changes are still to come?
As Brexit is a multi-stage process that is always in a state of negotiation and change, it’s difficult to say with certainty what will be fully implemented in 2023. However, as outlined in the UK and EU’s joint Future Relationship agreement, a rough timeline exists for the following:
new rules on pilot licenses and license recognition will be implemented on 1st January 2023
some goods, such as medical devices, will need new and different safety marks to continue selling in the UK, from 1st January 2023
The UK will no longer follow decisions made by the European Health Agency (EHA) and will begin following its own medicine regulator from 1st January 2023
What about Northern Ireland?
There is a lot of uncertainty when it comes to Northern Ireland. As part of the Brexit agreement, Northern Ireland will continue to follow certain EU regulations, while leaving with the rest of the UK.
At the same time, a grace period was to be implemented that allowed many goods – supermarket goods, pharmaceuticals, chilled meats and parcels – to move more freely between Northern Ireland and the rest of the UK.
However, this grace period is due to end in March, meaning that there are potentially more restrictions on the way.
The UK government has asked for an extension of the grace period until 2023, but with a lot of negotiating and politics still to play out, businesses trading between Northern Ireland and the UK should be prepared for potential disruption.
There are no easy answers for clients looking to navigate the wide range of new regulations. With so much coming down to ongoing dialogues between the UK and EU, the scale of implementation, timeline and details of new regulations is all likely to change.
Expert advice is key, so when it comes to making your clients aware of any future changes, consider asking the following questions:
Are you aware of any new licenses, certificates or regulations that you will need to apply for in the coming months?
Are you beginning, or have you already completed, the application process for obtaining these new licenses?
Are you aware of the financial cost of these applications? Have you set aside funds to support your applications?
Have you made contingency plans in case of not being able to meet new regulation changes?
Are you aware of any key dates and timeline changes that will affect your business?
It’s possible that with the most recent post-Brexit changes, your clients may have already come through the worst. But for clients whose businesses continue to face new changes, there are still hurdles ahead.
When it comes to finding the right way forward for your clients, planning ahead is the most important thing.
Things like new licenses can take months, are often expensive and can prove to be a major hurdle, so as soon as is practicable and possible, help your clients prepare for what’s still to come.
When it comes to Brexit, expecting the unexpected is vital for businesses looking to plan for the future. Find new clients in need to of expert support and advice on Unbiased.