Prof. Dr. Klaus-Peter Hillebrand about Brexit impacts
For almost half a century, the UK was a member of the European Union. Twice it applied in the 1960’s for membership in - what was then - the “European Economic Community“. It was, in fact, a tough choice for the UK to join at that time, but it finally entered in 1973.
And now; Britain is out again.
It is not my job here to analyse all the ‘whys and wherefores’ but I would just like to say that I deeply regret the 2016 decision of the voters. I would have loved a “Remain“ and I am still sad about the “Leave“. But, it does not help to complain.
Brexit needs to be skilfully managed by the governments, the companies and also by us; as the companies´ trusted advisors, all members of Russell Bedford International. Brexit impacts on people, customs, tax and company and commercial law.
People / Individuals
The EU freedom of movement of persons does no longer exist with respect to Great Britain. German citizens, for example, do not need a visa for tourist or business trips lasting up to 180 days. But anyone wanting to move to the UK to work or to study must apply for a visa beforehand.
The EU directive, which regulated social security for international employment relationships, does no longer apply. Health and social insurance, Citizenship, Residence Status, Private Pension provisions, even driving licences and all those formerly well-established “life conditions”, need to be checked carefully when UK citizens and European citizens connect.
All goods entering the customs territory of the European Union from the UK, or vice versa, are subject to custom formalities laid down by the legislation of the European Union. That is already quite a challenge for companies, starting with registration at the custom´s authorities and getting an EORI number (Economic Operator´s and Identification number). Many details have to be considered in regards to import, export, re-export, Northern Ireland regulations and transit procedures.
VAT: The UK now has a new tax status; it is a Non-EU country (third country). VAT treatment of EU goods to the UK is now aligned with those from outside the EU, which means that UK VAT is imposed on imports from the EU.
All European businesses dealing/trading with the UK need to carefully control their companies’ operations and processes. After the December Deal, there are still uncertainties for the UK and European countries (Maintenance of VAT registrations, fiscal representations etc.), but our local Russell Bedford Tax experts, who are familiar with the legislation in their country, can help.
Changes in Corporate and Income tax also need to be carefully considered (for example, withholding tax exemption for dividends between companies).
Corporate and commercial law
This is just one small example of another complicated topic: European Companies, like the SE (Societas Europaea), can no longer have its registered office in the UK.
Newly concluded commercial contracts should take into account Brexit clauses on (may be) future areas of application, taxes, customs duties and clauses due for a significant adverse change in the legal situation.
We, the European partners and offices of Russell Bedford International, can help you. If you have questions or need help, please do not hesitate to contact one of our offices in Europe (www.russellbedford.com)