EU Exit frequently asked questions

We have put together the answers to the most common questions our customers and stakeholders have asked about the EU Exit period.

Impacts of leaving the EU

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For information on how we use your personal data including your rights, see our privacy notice.

This section outlines the high-level information about data implications and the Northern Ireland Protocol. These are subject to change and will be updated as more information and clarity about the process becomes available, so do check back from time to time.

Data

What happens to data flows now that the EU Exit transition period has ended?

In the months leading up to the end of the transition period, it was anticipated that businesses based in the UK that were receiving or processing personal data from the EEA would have to put in place an additional transfer mechanism to continue receiving personal data from the EEA lawfully. This is because it was anticipated that the UK would become a ‘third country’ for the purposes of the EU GDPR in the absence of an adequacy decision. 

However, on 24 December 2020, the EU and UK secured a trade deal under the Trade and Cooperation Agreement (TCA). The TCA includes a temporary 'bridging mechanism' for personal data which allows organisations to continue to send personal data from the EU to the UK until 30 June 2021. During this period, personal data can flow freely from the EU to the UK. 

This gives organisations that had not addressed EU to UK data transfers some breathing space while the EU Commission continues its assessment of adequacy for the UK. During this extension, if you receive personal data from the EU you should still consider putting alternative safeguards in place as a sensible precaution.

Is the position the same for data flows between NI and ROI?

To date there is nothing to suggest that data flows between ROI and NI will be treated any differently than data flows between the EEA and the UK generally. However, the Information Commissioner's Office (ICO) has stated that it will monitor the position and provide updates accordingly. 

What is the purpose of the bridging mechanism under the Trade and Cooperation Agreement (TCA)?

The bridging mechanism enables personal data to continue to flow from the EU to the UK without additional safeguards, for a period of up to 6 months. The bridging mechanism is in place for an initial period of 4 months (up to the end of April 2021) but will automatically be extended for a further 2 months unless the EU or UK object, or the UK has already received an adequacy decision by this point. 

Under the TCA, the European Commission formally declared its intention to commence the adequacy decision process for the UK and to work closely with other bodies and institutions involved in the relevant decision-making procedure. The rationale for the bridging mechanism is to enable personal data transfers from the EU to the UK to continue freely until an adequacy decision is formally obtained. 

During this extension period if you receive personal data from the EU you should still consider putting alternative safeguards in place as a sensible precaution.

What is an adequacy decision?

An adequacy decision is a formal declaration by the EU Commission that another country outside of the EU offers an equivalent level of data protection to that provided in the EU (by virtue of the EU GDPR). 

The UK is seeking adequacy decisions under both the General Data Protection Regulation (GDPR) and the Law Enforcement Directive (LED).

What is the practical effect of an adequacy decision?

The effect of an adequacy decision is that personal data can be sent from an EEA state to a third country (i.e. UK) without an additional transfer mechanism being required. In other words, data transfers can continue in the same way as they did before EU Exit.

How long does the process for obtaining an adequacy decision take?

The process for obtaining an adequacy decision can be lengthy and involves a proposal from the EC, an opinion of the European Data Protection Board, approval from representatives of EU countries and the adoption of the decision by EU Commissioners. 

Is the UK likely to obtain an adequacy decision?

It seems that the UK will have a strong case for obtaining an adequacy finding particularly because: 

  • the EU-UK Joint Declaration, published alongside the Trade and Cooperation Agreement (TCA), includes a political commitment from the EU to secure a favourable adequacy decision for the UK; and
  • the UK has mirrored the EU GDPR in its domestic law (UK GDPR)

However, there are concerns that the UK’s surveillance powers under the Investigatory Powers Act 2016 could delay an adequacy decision being granted.

What happens if the UK does not receive an adequacy decision by the end of the bridging period?

If the UK has not received an adequacy decision by the end of the bridging period, it will become a ‘third country’ for the EU GDPR. This will mean that personal data transfers from the EU to the UK will require additional transfer mechanisms to be put in place under Article 46 of the EU GDPR, such as:

  • EU Standard Contractual Clauses (‘SCCs’); or
  • Binding Corporate Rules. 

If there is no applicable safeguard under Article 46, the next step will be for organisations to consider if one of the derogations under Article 49 could be relied upon. Organisations should be mindful that the derogations are only intended to apply in limited circumstances and specific advice should be obtained if reliance on a derogation is being considered. It is important to note that any derogations relied upon should be documented in organisations’ records of processing activities (under Article 32 of the UK GDPR). 

The Information Commissioner's Office (ICO) advises organisations put additional safeguards in place by the end of April 2021 (if they have not already done so). This will ensure that organisations are GDPR compliant if the UK does not obtain an adequacy decision by the end of the bridging period or at all. 

What are Standard Contractual Clauses (SCC) and where can we get them from?

The Information Commissioner's Office (ICO) has confirmed that  Standard Contractual Clauses (SCC) will likely be the only safeguard that small and medium-sized enterprises (SME) can rely upon if the UK does not obtain an adequacy decision. SCCs are sets of model clauses developed by the EU Commission that currently cover the following scenarios:

  • data controller based in the EU transferring to a data processor based in a ‘third country’; and 
  • data controller based in the EU transferring to another data controller based in a ‘third country’.

The SCCs are in the process of being updated so that they will cover all transfer scenarios (e.g. EU processor to UK controller and EU processor to UK processor). It is hoped that the new SCCs will be published before the end of the bridging period.

Are additional safeguards, such as Standard Contractual Clauses (SCC), already put in place now meaningless?

Many organisations will have already devoted considerable time putting in place additional safeguards such as Standard Contractual Clauses (SCC). However, the Information Commissioner's Office (ICO) has stated that this was not time wasted as doing so was a “sensible precaution”.

Although the bridging mechanism shows both the EU’s and UK’s intention to reach an adequacy decision, this may take longer than six months meaning that an additional transfer mechanism would likely be required.

Furthermore, an additional safeguard is still required for transfers of personal data to the USA following the decision of the ECJ in Schrems II that the EU-US Privacy Shield is an invalid transfer mechanism. 

Is the Information Commissioner's Office (ICO) GDPR guidance still relevant to UK organisations?

Yes, the Information Commissioner's Office (ICO) guidance published about the EU GDPR remains relevant. This is because the principles of the EU GDPR have been incorporated into UK domestic law via the UK GDPR. Organisations should also keep up-to-date with any UK-GDPR specific guidance introduced by the ICO. The ICO’s consent guidance specifically refers to the UK GDPR.

Can my business transfer personal data to the US following the EU Exit transition period?

The UK Government had previously confirmed that it would continue to recognise the EU-US Privacy Shield following the end of the transition period. However, the decision of the Court of Justice of the European Union (“CJEU”) in Schrems II has complicated the position by invalidating the EU-US Privacy Shield. 

Therefore, to lawfully transfer personal data to the US, UK based organisations will need to ensure that they have an additional safeguard in place in accordance with Article 46 of the UK GDPR or failing that, can rely on a derogation under Article 49 of the UK GDPR. 

When will UK organisations need to appoint a representative in the EU?

Article 27 of the EU GDPR requires organisations not established in the EU that offer good or services to, or monitor the behaviour of, EU based individuals, to appoint an EU-based representative to:

  • act as their point of contact for individuals and local data protection authorities;
  • maintain records of the organisation's data processing activities; and
  • make data processing records available to the Information Commissioner's Office (ICO)

Organisations will need to authorise the representative, in writing, to act on their behalf regarding their compliance with the EU GDPR. Details of an organisation’s representative must be provided to EEA-based individuals.

This arrangement is reciprocated under the UK GDPR meaning that an EU-based company without a subsidiary in the UK, targeting goods or services to people in the UK, will need to appoint a UK-based representative. 

The ICO has published guidance on the appointment of representatives

Are there any exemptions to appointing a representative?

It is not necessary to appoint a local representative if:

  • the organisation is a public authority; or
  • the processing is only occasional, of low risk to the data protection rights of individuals, and does not involve special category or criminal offence data on a large scale. 

My business is not directly targeting people (living in the EU), but my products are supplied to the EU market through, for example, an online retailer. Do we still need to appoint an EU representative?

If your business is not directly targeting the EU market, you do not need to appoint an EU representative. For example, a manufacturer of specialist tools who sells the tools in the EU but does not do direct marketing or process customer data relating to individuals in the EU, does not need to appoint a representative. However, if you plan to start direct marketing or marketing in trade publications in the EU, the need to appoint an EU representative would likely be triggered.

There are certain exemptions that can apply in relation to appointing a representative, for example, if the data processing is occasional and low risk. However, specific advice should be obtained if you are unsure whether you need to appoint a representative.

What happens to personal data collected or processed before the end of the transition period?

The EU GDPR will continue to apply to any personal data obtained or processed in the UK about non-UK data subjects before the end of the transition period (known as legacy data) until the UK obtains an adequacy decision (at which point it would become subject to the UK GDPR and DPA 2018). 

Personal data about UK data subjects processed in the UK before the end of the transition period falls under the UK GDPR and DPA 2018 from the end of the transition period.

Customs

What does it mean to be trading under the Northern Ireland Protocol?

A business is trading under the NI Protocol if the business is VAT registered and either:

  • Your goods are located in NI at the time of sale
  • You receive goods in NI from VAT registered EU businesses for business purposes
  • You sell or move goods from NI to an EU member state. 

When trading under the NI Protocol, a business must use an “XI” prefix in front of their VAT number when communicating with an EU customer or supplier. A trader can check whether they're trading under the NI protocol and self-identify with HMRC using the same link.

Will there be customs duty payable on the movement of goods from the UK mainland to Northern Ireland?

There will be no customs duty or tariffs payable on goods coming into NI from the rest of the UK unless the goods are ‘at risk’ of being supplied into the EU market.

There has been a mention of ‘new tariffs’ in relation to imports now the European Union (EU) transition period has ended, what does this mean?

On the 19 May 2020, the UK Government announced the UK's new Most Favoured Nation (MFN) Tariff regime, UK Global Tariff (UKGT), would replace the EU's Common External Tariff on 1 January 2021. The UK Government has streamlined and simplified nearly 6,000 tariff lines, removed the EU’s Meaursing table and eliminated tariffs on a wide range of products.

Businesses in Northern Ireland must also refer to the NI/EU tariff  for goods entering Northern Ireland that are “at risk”, as any tariffs that may be payable on these goods would be levied at the rate applied in the EU.

What customs duties apply to goods deemed ‘at risk’?

EU customs duties will apply to goods entering Northern Ireland from GB and non-EU countries if those goods are ‘at risk’ of entering the EU. 

No customs duties will be payable, however, if goods entering Northern Ireland from GB are not ‘at risk’ of entering the EU's Single Market.

For goods entering Northern Ireland from third countries not considered to be ‘at  risk’, the customs duties applicable in Northern Ireland will be the same as in the other parts of the UK.

What are the conditions required for goods to be considered not ‘at risk’?

Article 5(2) of the Northern Ireland Protocol states that goods will not be at risk if they:

(a) will not be subject to commercial processing in Northern Ireland; and 
(b) fulfil the criteria established by the Joint Committee in accordance with the fourth subparagraph of this paragraph

The Joint Committee determination of goods not at risk was published on 17 December 2020. This defines what commercial processing is for the purposes of point (a) above and the further conditions that must be met under (b) above. Note that conditions (a) and (b) must both be met for goods to be considered not ‘at risk’.

What is 'commercial processing'?

Commercial processing is defined in Article 2 of the Joint Committee determination of goods not at risk. 

Businesses with an annual turnover of less than £500,000 will not be subject to the commercial processing test. In addition, processing undertaken for the following purposes will not be considered as ‘commercial processing’ where the processing is in Northern Ireland and is for the sole purpose of:

  • the sale of food to an end-consumer in the United Kingdom;  
  • construction where the processed goods form a permanent part of a structure that is constructed and located in Northern Ireland by the importer; 
  • direct provision to the recipient of health or care services by the importer in Northern Ireland;
  • not-for-profit activities in Northern Ireland, where there is no subsequent sale of the processed good by the importer; or 
  • the final use of animal feed on premises located in Northern Ireland by the importer

The term ‘processing’ means any alteration of goods, any transformation of goods in any way, or any subjecting of goods to operations other than for the purpose of preserving them in good condition or for adding or affixing marks, labels, seals or any other documentation to ensure compliance with any specific requirements.

When is a good considered not at risk of subsequently being moved into the European Union?

There are two ways that goods brought into Northern Ireland from Great Britain are not ‘at risk’. You should consider which of these two options is most suitable for your business. Goods will be not ‘at risk’ where:

  • the applicable EU tariff is zero (including goods which originate in the UK where you are able to claim a preferential rate of duty under the UK-EU Trade and Cooperation Agreement).
  • the goods are for sale to, or for final use by, end consumers located in the UK and are brought into Northern Ireland by a trader authorised under the UK Trader Scheme

What documentation do I need to prepare or file for goods not “at risk”?

The business must be authorised for the UK Trader Scheme to declare the goods brought into NI as not ‘at risk’.
Supporting evidence for each consignment moved into NI will need to be kept for 5 years. Examples of evidence to support not ‘at risk’ declaration include:

  • Commercial receipts and invoices
  • Delivery receipts
  • VAT invoice
  • Commercial contracts and purchase orders

In the absence of this authorisation confirming your goods are not at risk, the goods will be deemed at risk and relevant duties may apply. 

What is the Tariff Waiver Scheme?

Subject to certain conditions, it may be possible for you to claim a waiver for duty on goods that you bring to Northern Ireland from Great Britain. This is available if your goods are “at risk” and are subject to a positive tariff rate.

Claims under the Tariff Waiver Scheme must be made on your import declaration and you must submit a duty waiver form to HMRC following the submission of your customs declarations with further details of the claims you have made.

Where can I get further help and support?

HMRC is investing a further £16 million in a grant programme to fund employee training and IT improvements for customs intermediaries, traders and hauliers that make customs declarations. Businesses that complete customs declarations now have until 31 January 2022, or earlier if funding is fully allocated, to apply for grant funding to help them increase their capacity to do so. 

What if I am involved in trade with EU countries?

The UK EU Trade and Cooperation Agreement (TCA) eliminates customs duties on products originating in the UK or EU. The TCA has been written to encourage production of goods between the EU and the UK. It will not allow for the free movement of goods that are not of EU/UK origin between the EU and the UK (e.g. Chinese goods imported into the EU then exported to the UK). In determining whether preferential or reduced rates of customs duty are available on the import of products, the origin of the imported products is key.

When does a product originate in the UK/EU?

There are 2 basic rules of origin:

1.    Wholly obtained - e.g. an animal born and raised in a specific country, or a plant grown in a country would be wholly obtained in that country.

2.    Substantial or sufficient transformation - 3 major criteria usually used in a trade agreement for determining this:

  • A change in tariff classification (“tariff shift”)
  • A percentage of value-added
  • Having undergone a specific manufacturing process.

What if I am involved in trade with non-EU countries?

If you export to non-EU (third countries), you will need to continue to file an export declaration as is current practice.
 

How is EU Exit going to affect our business selling to and buying from Europe?

The Northern Ireland Protocol is designed to prevent a hard border on the island of Ireland, therefore in the main the flow of goods between Northern Ireland, the Republic of Ireland and the rest of the EU should remain unaffected and customs declarations will not be required for goods moving directly between NI and the EU.

From a VAT perspective, the movements of goods between Northern Ireland and EU Member States will be treated as dispatches and acquisitions (as was previously the case). However Northern Ireland businesses must now use an “XI” prefix in front of their VAT registration number when trading under the NI protocol.

Are there different rules for animal origin products?

Yes. The UK Government has published guidance on importing animals, animal products and high-risk food and feed not of animal origin from 1 January 2021. If your products are of animal origin, additional documentation such as health certificates signed by vets are required for exporting these products across borders.

Where you are importing goods of animal origin into the UK, you must provide the correct certification with your import and enter the EU through a Border Control Post (BCP), previously known as border inspection post (BIP) or designated point of entry (DPE), where checks will be carried out to make sure that the import conditions have been met. In some cases, you may need an import licence or authorisation.

What checks will be carried out on agri-food products sold to the rest of the UK?

The Northern Ireland Protocol allows for 'unfettered access' for Northern Ireland businesses to the rest of the UK. However, Northern Ireland agri-food producers will be required to continue to align with EU [Sanitary and Phytosanitary] rules. 

What checks will be carried out on agri-food products entering Northern Ireland?

Agri-food goods entering Northern Ireland from Great Britain do so via a Border Inspection Post or Designated Point of Entry as required by EU law. They are subject to identity and documentary checks and physical examination by UK authorities as required by the relevant EU rules. There is however a three-month grace period until 31 March 2021 for products of animal origin and plant products entering NI. 

Are there any additional costs we will have to factor into our supply chain?

The requirement for veterinary documentation and customs agents’ charges to move the goods compliantly will result in additional costs.  However, the UK government has confirmed that where a business is moving live animals or products of animal origin from GB to NI, the business does not need to pay for the Export Health Certificates they need. Instead, the veterinarians carrying out these checks will invoice the government directly. 

As a small business, is it feasible to complete customs paperwork or is a customs agent essential?

The Trader Support Service (TSS) has been designed to facilitate businesses in submitting their customs declarations (for goods moving directly between GB and NI), although many businesses do submit declarations themselves, this can be complex and time consuming for those business that do not have previous experience in this area. 

Customs declarations for goods moving into and out of Northern Ireland can be lodged to HMRC via an online platform, without TSS support, however, this can also be complex and investing in the necessary software to lodge them yourself can be expensive. 

Yet, if you expect to be submitting a large number of declarations, it may be more cost effective for you to undertake this yourself. HMRC offers grants and training to help you undertake the completion of customs declarations in-house. Before making your decision, compare in-house costs to using a customs agent and consider the following:

  • Do you have the in-house expertise to do customs documentation?
  • Do you have the volume of business?
  • Is it more costs effective to do it in house or appoint an agent?
  • Do you have time to prepare and train staff?

Do simplified import procedures apply to both suppliers and customs brokers?

What export documents will be needed for sending goods to EU countries?

As an NI business, there is no requirement for any import or export documentation to accompany your goods as these remain dispatches and acquisitions. For GB businesses, as GB will now be considered a third country to the EU (and vice versa), there now exists a hard border between GB and the EU. This means, regardless of the tariff position, border control procedures will be in place and therefore businesses now need to make customs declarations (C88), ensuring they have classified and valued their goods and evidenced whether they have UK/EU origin. 

Will every single shipment require a certain export document?

Each consignment will require an export declaration. Suppliers should be aware of their terms of trade (“Incoterms”) with their customers as these will determine who is responsible for filing import and export declarations.

Do we have to register for an EORI number to import?

Since January 1 2021, you need an EORI number to move goods between the UK and the EU. If you do not have one, you may have increased costs and delays. For example, if HMRC cannot clear your goods you may have to pay storage fees. For Northern Ireland businesses, an XI EORI number is needed to move goods between NI and non-EU countries (including GB), make a declaration in NI and get a customs decision in NI. In order to get an EORI that starts with XI, a business must already have an EORI that starts with GB. It is possible for a business to apply for a GB and XI EORI number at the same time.

If I already have a deferment account, can I use this for imports and exports after the EU Transition Period?

Businesses in Northern Ireland will be able to use an existing Duty Deferment account provided it is supported by a Customs Comprehensive Guarantee. However, if the value of your imports increase, you should revisit the value of your deferment account limit (and your guarantee) to ensure you can continue to import an increased level of imports and not breach your deferment account limit.

Can I import and export in the EU without an establishment?

For the business to act as a declarant (importer of record) and clear goods in the EU, an EU establishment will be required, or an indirect representative that is resident in the importing country should be appointed to undertake customs formalities in the EU on your behalf. It is also understood that in order to operate a Duty Deferment account in the EU, an EU establishment will be required.

For customs duty purposes, what is classed as an establishment?

An establishment is usually determined on a case-by-case basis based on each trader's individual circumstances. However, indicators of an establishment include having human and technical resources available to carry out normal business activities or make some business decisions in the country in question.

What changes should we be planning for now and what additional data fields will we have to capture?

Where you have an EU or global market now that the EU Transition Period has ended, it is important that you have sufficient systems in place so that the correct documentation can be produced. It is vital you understand your supply chain to determine who is responsible for filing what and when. For example, a declaration for imports and exports is completed on a C88 form and requires detailed information from various sources.

What are UK Freeports and how will they operate?

The Department for International Trade announced in August 2019 that the UK government intended to establish up to 10 Freeports across the UK. Freeports are generally secure customs zones traditionally located at ports that allows business to be undertaken inside a country’s land border, but where different custom’s rules apply. 

However, the UK government is proposing a bespoke UK Freeport model which include multiple customs zones located within or away from a port as well as a tax site, all within a Freeport outer boundary where additional planning, regeneration and innovation measures would apply.

To date a bidding process has been undertaken in England which is currently under evaluation. Discussions are ongoing with the devolved administrations as to the establishment of Freeports in the Scotland, Wales and Northern Ireland.

VAT

Will evidence of export to support zero rated goods change?

Businesses should prepare and continue to collect the necessary evidence for export in line with HM Revenue & Customs (HMRC) for VAT zero rating.

What rates of VAT will apply in Northern Ireland?

Northern Ireland will remain part of the United Kingdom’s (UK) VAT system but will maintain alignment with European Union (EU) VAT rules on goods. This means that Northern Ireland will be bound in the same way as the rest of the UK on certain UK VAT changes. 

However, the Northern Ireland Protocol also allows the UK Government to apply Northern Ireland VAT exemptions and reductions, including zero rating, corresponding to those applicable in Ireland. 

There is no further information available at this time on any VAT rate changes in Northern Ireland. 

When do you expect to have more clarity on VAT rates in Northern Ireland?

Currently NI is aligning with UK VAT rates. There is no indication whether this will change in the future. Businesses should continue to use UK VAT rates.  

How will goods supplied from the UK (excluding Northern Ireland) to an EU Member State be treated from a VAT perspective, post the Transition Period?

The supply of goods from the UK (excluding Northern Ireland) to other EU Member States (which involves the physical movement to an EU member state) will constitute an export for VAT purposes. This means a requirement to collect the relevant evidence to support VAT zero rating, where applicable.

Will HMRC still be responsible for the collection of VAT and customs and excise duties in Northern Ireland?

HMRC will remain responsible for the collection of VAT and other indirect taxes in Northern Ireland and the rest of the UK.

As a Northern Ireland business, will I still need to submit Intrastat and EC Sales Lists?

Northern Ireland business will continue to file both arrival and dispatch Intrastat declarations for the foreseeable future (in respect of movements of goods between NI and the EU). This sale of goods should also be reflected in an EC Sales List. However, EC Sales Lists reporting for the provision of services from NI to EU member states are no longer required. 

Can I still avail of EU simplifications such as triangulation?

Given Northern Ireland will be bound by EU VAT rules, NI businesses and those classified as trading under the NI protocol should be able to avail of these simplifications. Triangulation simplifications will no longer be available to GB businesses where they act as the “middleman” or where the goods originate or are destined for GB. 

Are there any changes to how I should handle my VAT compliance requirements moving forward?

UK VAT compliance filing arrangements should remain the same in relation to current deadlines and how VAT returns are filed. However, taxpayers should be aware of the further digital changes for VAT for returns starting on or after 1 April 2021. 
 

Can we still avail of EU VAT case law decisions, and will they be binding on the UK in future?

Post 01 January 2021 there remains uncertainty as to the mechanism by which Northern Ireland businesses may rely on EU VAT case law. However, given the Northern Ireland Protocol requires the UK to implement certain EU VAT law into the UK legislation, it is likely that any future European Court of Justice (ECJ) case law would need to be accepted by UK courts for the decision to be binding on Northern Ireland business. This point is not clear at the time of writing.

How will EU exit impact on services being sold from Northern Ireland into Europe and worldwide?

The supply of services will follow UK VAT rules only, in contrast to supplies of goods. With respect to services provided to non-UK business customers, these will generally be outside the scope of UK VAT, with the overseas customer responsible for any local taxes upon receipt. Where services are supplies to private overseas customers, the default position is that UK VAT should continue to be charged, unless the supply falls into one of the exceptions (of which there are many) - in certain cases an overseas VAT registration could be required depending upon the specifics. HMRC's guidance on this is in Notice 741A, which covers both the basic rules and the exceptions. 

How should businesses treat the movement of goods from Northern Ireland to an EU Member state?

A movement of goods from Northern Ireland to an EU Member State will be treated as an EU dispatch from a VAT perspective i.e. there will be no change.

How is the movement of goods from an EU Member state to Northern Ireland treated?

The VAT rules for these types of supplies will remain the same. These continue to be treated as acquisitions with acquisition VAT being due where appropriate. Intrastat arrivals declarations will have to be completed subject to normal thresholds. 

How do I treat a sale of goods from Northern Ireland to the mainland UK?

These transactions should remain to be treated as a UK domestic sale. Depending upon the nature of the goods, UK VAT remains chargeable at the applicable rate.

How do I treat a purchase of goods from Great Britain to Northern Ireland?

Whilst this is technically an export from GB to the EU, the seller of these goods should continue to charge UK VAT at the appropriate rate. The customer should use the invoice provided as evidence for reclaiming this VAT charged. This will not apply to exceptions such as goods which are subject to the domestic reverse charge. In this instance, the customer will continue to account for UK VAT on these goods. 

How do businesses treat the movement of own goods from Northern Ireland to Great Britain?

As per HMRC guidance, a business will not be required to account for VAT when it moves its goods from Northern Ireland to Great Britain unless these goods have been subject to a sale or supply. 

How do businesses treat the movement of own goods from Great Britain to Northern Ireland?

Unlike the above scenario, the business will have to account for VAT on the movement of these goods. This should be included as output VAT on the VAT return. However, where the goods are being used for taxable sales, the VAT may also be reclaimed as input VAT on its UK VAT return subject to the normal rules. 
 

What about domestic Northern Ireland purchases?

These should be chargeable at the applicable rate of VAT in Northern Ireland. Currently these are UK VAT rates.

What about distance sales?

Where a business in Northern Ireland sells goods to a non-business consumer in an EU Member State, (i.e. a distance sale), UK VAT will be due up until the point where the Member State distance selling threshold is breached, at which point VAT is chargeable in that Member State at the Member State's applicable rate of VAT. Please note that these rules will be subject to change come 1 July 2021 with the introduction of the EU’s e-commerce package which introduces a One Stop Shop for distance sales. 

As a Northern Ireland business, will I still be able to use the One Stop Shop (OSS)?

The EU Commission has confirmed that taxable persons established in Northern Ireland or Member States should be able to use the OSS for declaring and paying VAT due on their intra-EU distance sales of goods. 

As a Northern Ireland business, will I still be able to avail of the EU VAT Refund scheme?

Taxable persons established in Northern Ireland should be able to request a refund of VAT paid in Member States on goods only via the EU VAT refund scheme and vice versa. Any EU VAT incurred on services will need to be refunded by making a claim directly with the EU jurisdiction in question. 

How will margin schemes be impacted?

HMRC has confirmed that margins schemes involving goods, other than motor vehicles, will not generally apply for sales in NI where stock has been purchased in GB, with VAT accounting required under normal rules. However, these margin schemes should remain unchanged for sales of goods that are purchased in NI or the EU and sold in NI or the EU. 

Where sellers are in GB, the margin scheme will remain available for stock purchased in NI or GB, albeit the position is a little unclear for goods purchased in the EU for sale in GB. 

What are the new rules for online sales of overseas goods coming into GB?

HMRC have introduced new rules on consignments so that imports from outside the UK valued below £135 must have the VAT collected at the point of sale. This change will require the overseas seller to register for UK VAT to account for UK output VAT at the point of sale. 

Are there any other considerations?

HMRC has confirmed that where goods sold on board ferries between GB and NI, UK VAT will be due and accounted for on the seller’s UK VAT return. Where goods are sold on journeys that visit GB and NI as part of a voyage to third countries the sale will be treated as outside the scope of UK VAT and where goods are sold on journeys between NI and an EU member state they are taxed in the place of departure, as is the case currently.

People movement and migration

People movement and migration: Employers

What is the impact of exiting the European Union (EU) on people and immigration?

Due to the impact of EU Exit, ‘free movement of people’ ended on 31 December 2020. From 1 January 2021, most European Economic Area (EEA) nationals are no longer able to come to the United Kingdom (UK) and work, without first getting a work visa. EEA nationals and workers include people from all countries in the EU, EEA countries (Lichtenstein, Norway and Iceland) and Switzerland. The one exception to this relates to Irish passport holders, who have the right to live and work in the UK.

EEA nationals and their family members who resided in the UK before 31 December 2020 can apply for proof of their right to remain in the UK by 30 June 2021 under the EU Settlement Scheme. An application must be made by that date; if an application is not made, the EEA national will not have proof of their right to live and work in the UK. 

Following the end of the EU Transition Period on 31 December 2020 EEA nationals, in most cases, are permitted to enter the UK for up to six months as a ‘visitor’ without a visa. EEA nationals will not be allowed to work if they enter on this basis. If an EEA national wants to enter the UK for work after 31 December 2020, in most circumstances, they will have to apply for a work visa before entering the UK.

There has also been an impact on British passport holders travelling to the EU after 31 December 2020. British passport holders will not need a work visa to work in Ireland, but may need a work visa if they are travelling to work elsewhere in the EU. A British passport holder, travelling to the EU for work purposes after 31 December 2020 should seek advice before doing so. Specific advice for UK nationals living abroad after EU Exit, including on residency rules, health and benefits is available online through a series of ‘Living in country’ guides.

What are the implications of immigration changes for employers?

One of the key issues facing businesses is the uncertainty around recruiting and retaining staff, especially if they employ staff from the EU. Free movement of EEA workers ended on 31 December 2020. From 1 January 2021, it is now more complex and more expensive to recruit EEA workers, as the UK has introduced a new immigration system. Under this new system, an employer will require a UK Sponsor Licence and migrant employees must meet English Language requirements, as well as other requirements such as a salary threshold, or being suitable for particular job roles which are defined as a ‘shortage occupation’.

Northern Ireland businesses should consider their long-term recruitment plans and consider their future workforce needs now. The current visa costs for non-EEA nationals are applied to EEA nationals in the new immigration system, meaning that the fees for a three year visa could now be up to £5,000. 

From 1 January 2021, employers who have not previously sponsored workers in the UK, will need to develop and adopt governance models, policies and processes. Employers should obtain a Sponsor License to enable them to employ EEA workers who will arrive in the UK from 1 January 2021.

What is the EU Settlement Scheme?

The EU Settlement Scheme is a mandatory application scheme under which all EEA nationals resident in the UK by 31 December 2020, must make an application by 30 June 2021 to protect their rights. You should apply for the scheme if:

  • You or your family members are an EU, EEA or Swiss citizen
  • You reside in the UK on or before 31 December 2020

The EU Settlement Scheme opened on 30 March 2019 and applications are free. You must make an application by 30 June 2021. Successful applicants will be granted either Settled Status or Pre-Settled Status, depending on their circumstances and the length of time they have lived in the UK. You do not need make an application under the EU Settlement Scheme if you have ‘Indefinite Leave to Remain’ in the UK, or if you are an Irish citizen. However, in some situations, you may wish to do so and you should take advice accordingly.

If an EEA national does not make an application under the EU Settlement Scheme, it is not clear if they will have proof of their right to live and work in the UK. As such, it is a possibility that employers will not be able to continue employing staff who have not applied under the scheme as their ‘Right to Work’ may be in question.

Non-EEA family members of an EEA National who are in the UK on the basis of EU law prior to 31 December 2020 should also make an application by 30 June 2021 to protect their rights.

Settled Status

Settled Status is generally granted to a person who has lived in the UK for a continuous period of five years or more by 31 December 2020. This means that for five consecutive years, the person has been in the UK for at least six months in any 12-month period.

Exceptions apply however, for example, if the applicant has been absent from the UK for reasons such as childbirth, serious illness, study, vocational training or compulsory military training. This is sometimes referred to as the ‘continuity of residence’, which we cover in more detail in the next question. Successful applicants can stay in the UK indefinitely (assuming they do not breach UK criminal law at any point) and will be able to apply for British citizenship (if eligible) 12 months after receiving Settled Status. However, it should be noted that Settled Status can be lost if the holder spends more than five years outside the UK.

Pre-Settled Status

Pre-Settled Status is usually granted if a person does not have five years continuous residence when they apply to the EU Settlement Scheme, but started living in the UK by 31 December 2020. Successful applicants can stay in the UK for up to five years from the date they get Pre-Settled Status. However, applicants should apply for Settled Status once they have acquired five years continuous residence in the UK. We have provided more detail in the next question.

If a person will reach five years continuous residence at some point before 30 June 2021, they could choose to wait to apply for Settled Status so that they reach five years continuous residence when they make the application. This means that if their application is successful, they will get Settled Status without having to first make an application for Pre-Settled Status, and then make another application for Settled Status in the future. With either status, the applicant will be able to:

  • Work in the UK
  • Use the National Health Service
  •  Enrol in education or continue studying
  • Travel in and out of the UK
  • If eligible, access to some public funds such as benefits and pensions

For more information, watch our People Movement and Immigration tutorial

What is continuity of residence and why is it important?

This regulation applies for the purpose of calculating periods of continuous residence in the UK. This is important as it allows the EU national to have periods of absence while still fulfilling continuous residence rules for the purpose of applying for Settled or Pre-Settled status through the EU Settlement Scheme. Continuity of residence is not affected by:

  • Periods of absence from the United Kingdom which do not exceed six months in total in any rolling 12 month period.
  • Periods of absence from the United Kingdom on compulsory military service.
  • One absence from the United Kingdom not exceeding twelve months for an important reason such as pregnancy and childbirth, serious illness, study or vocational training or an overseas posting.

Continuity of residence is broken when:

  • A person serves a sentence of imprisonment
  • A deportation or exclusion order is made in relation to a person
  • A person is removed from the United Kingdom under these Regulations

Contact Advice NI on 0800 138 6545 if you or your employee want help on calculating continuous residence. They offer free, independent, multilingual, advice over the phone, online and face-to-face to EU nationals in relation to the EU Settlement Scheme. 

What is the Points Based Immigration System?

The UK's new points-based immigration system took effect from 1 January 2021, once freedom of movement within the EU ended. The new immigration system treats EU and non-EU citizens equally and aims to attract people who can contribute to the UK’s economy. Irish citizens will continue to enter, live and work in the UK as they do now.

The new immigration application process to work, live and study in the UK from 1 January 2021 opened in autumn 2020. A visa is not required to enter the UK when visiting for up to 6 months. The new points-based system requires 70 points from applicants and is focused on the most ‘highly skilled workers’, ‘skilled workers’, ‘students’ and a range of ‘other specialist workers’. EU citizens moving to the UK to work must get a visa in advance.

There are three mandatory criteria which add up to 50 points; the applicant must

  • Have a job offer from an approved sponsor
  • Have a job offer at the required skill level 
  • Meet specific English language requirements

In addition to these mandatory criteria, applicants must earn enough points through additional criteria such as: 

  • Specific education level 
  • How the salary compares to the going rate for the field in which they wish to work
  • Whether there is a shortage of workers in the particular field or whether they are a 'new entrant' into the labour market (i.e. under the age of 27)

What is a Frontier Worker and how will they be affected?

A Frontier Worker is an EEA worker who lives in one EU state, works in another and returns home regularly. An example of this in a Northern Ireland context is an EEA worker living in Dundalk and working in Newry, or living in Donegal and working in Strabane.
Frontier Workers who have worked in the UK by 31 December 2020 will need to apply before 30 June 2021 for a specific ‘Frontier Worker’ permit to enable them to continue to work in the UK on the same basis. Irish citizens do not need to apply for a Frontier Worker permit.

This is an important immigration application for EEA nationals who:

  • Do not hold a British or Irish Passport
  • Have worked in the UK by 31 December 2020
  • Have kept working in the UK at least once every 12 months since they started working here
  • Live 'primarily' outside of the UK – they must generally have spent less than 180 days in total in the UK over the course of any 12 month period 

Guidance has been issued on situations where a Frontier Worker will retain their status if they were not working and this includes the following situations:

  • You are temporarily unable to work because of an illness or accident
  • You were working for more than one year but are now involuntarily unemployed, and you’re registered as a jobseeker
  • You became involuntarily unemployed and are either looking for work or doing vocational training
  • You are temporarily unable to work because you are pregnant or had given birth
  • You are unable to come to the UK and work because of coronavirus (COVID-19)


The application is free and can be made online.

What should employers do now?

If you have not yet done so, you should take steps to understand the makeup of your workforce by carrying out a workforce audit. For example, do you know how many EEA and non-EEA personnel you employ directly, or how reliant your business and supply chain is on labour from the EEA? You should identify the employees in your business affected by EU Exit.

Those impacted will include:

  • Workers from the EEA
  • EEA workers who commute from the Republic of Ireland to work in your business, noting that Irish passport holders are not impacted by EU Exit
  • Workers who are UK nationals but have family members from the EEA
  • Students from the EEA working in your business, for example completing a scholarship or student placement
  • Any British passport holders that are required to travel to the EEA for work (this does not include travel to Ireland)

You should also consider whether there are tasks or departments that are heavily reliant on EEA workers. Are those workers being supported to make an EU Settlement Scheme application by 30 June 2021? Does your business need to mitigate employment risks? What is the potential cost of not helping the relevant employees? Essentially an organisation needs to gauge their immigration risk, identify those who need to make immigration applications and take action as set out below:

  • Keep updated on new rules following EU Exit including checking how the new rules apply, signing up to receive email alerts when new information is published or signing up for Home Office email alerts to check the status of EU nationals in the UK.
  • Speak to your employees about the upcoming EU Settlement Scheme deadline and immigration changes. Let them know you are aware of the issues and are looking at ways to address them. If employees know they are valued and supported, this will help increase their loyalty to your organisation. For more information, read our build effective relationships with your employees guide.
  • Retain skills so you can avoid losing vital skills and knowledge if a staff member leaves. You may wish to consider cross-skilling employees so that key skills and business knowledge are spread throughout your workforce. Read our knowledge management and business growth guide to find out how to share knowledge in your business.
  • Provide your employees with support and guidance on how they can make an application under the EU Settlement Scheme or as a Frontier Worker, or apply for British and Irish nationality. Note that some countries do not allow dual citizenship, so employees should check with their embassy in the UK to see if their home country allows dual citizenship. 
  • Make employees aware of the EU Settlement Scheme: employer toolkit, which offers tools and information to support EU citizens and their families on the EU Settlement Scheme.
  • Understand the increased complexity to your business of employing EEA citizens from 1 January 2021, including information about sponsorship fees, skill levels and salary thresholds). If you intend to recruit EEA citizens from outside the UK going forward, it is likely that you will need to apply for a UK Sponsor Licence. This should be actioned as soon as possible to enable you to continue to employ EEA citizens under the new points based system. For more information, read the guide on how to apply for a Tier 2 or 5 Sponsor Licence and how to sponsor a migrant worker.
  • Be mindful of discrimination. Ensure any support you offer is made available to all employees in your business whether they are UK citizens, EEA nationals or from outside the EEA. For more information, read our guide on prevent unlawful discrimination and promoting diversity.

What timelines should my business be aware of?

Businesses should be aware of the following timelines:

  • 31 December 2020: End of freedom of movement for EEA workers to the UK
  • Businesses should consider their long-term recruitment plans given this change
  • 1 January 2021: Sponsorship Licence Application Businesses who wish to recruit EEA workers from 1 January 2021 should apply for a Sponsor License. Your business should look into the new Points Based Immigration System and sponsorship application process now and read the guide on how to apply for a Tier 2 or 5 Sponsor Licence and how to sponsor a migrant worker
  • Employers who have not previously sponsored migrants in the UK will need to develop and adopt governance models, policies and processes ahead of applying for a Sponsor Licence
  • 30 June 2021, EU Settlement Scheme application deadline for EEA workers living in the UK before 31 December
  • 30 June 2021, Frontier Worker permit application deadline for EEA workers who live in the EU but work in the UK

Has the Common Travel Area (CTA) been affected?

The Common Travel Area (CTA) has not changed as a result of the UK exiting the EU. Employers should note that Irish nationals do not need immigration permission to work in the UK and British nationals do not need immigration permission to work in Ireland. The associated rights and entitlements of the CTA includes access to employment, healthcare, education, social benefits, as well as the right to vote in certain elections.

Following a statement to changes to the Immigration Rules on 14 May 2020, non-EEA family members of those born in Northern Ireland, and who consequently are entitled to British and/or Irish nationality will now also be able to apply for status under the EU Settlement Scheme regardless of whether their Northern Irish family member holds British or Irish citizenship. 

Are Right to Work checks affected?

There will be no change to the way EU, EEA and Swiss citizens prove their right to work until at least 30 June 2021. Employers should conduct right to work checks on EU, EEA and Swiss citizens in the same way as now until at least 1 July2021.

Job applicants can prove their right to work using any of the following:

  • Valid passport or national identity card if they’re an EU, EEA or Swiss citizen
  • Valid biometric residence card if they are a non-EU, non-EEA or non-Swiss citizen family member
  • Settled or Pre-Settled Status under the EU Settlement Scheme using the Home Office online right to work checking service

The government has advised that employers should not require EU, EEA and Swiss citizens to provide proof of their pre-settled or settled status until after 30 June 2021.

Employers will also not be required to undertake retrospective checks on existing EU employees after 30 June 2021. For more information read the right to work checklist.

Irish citizens will continue to have the right to work in the UK and will continue to prove their right to work as they do now, for example by using their passport. Also read right to work checks and ensure your workers are eligible to work in the UK.

Where can I get more information about the EU Settlement Scheme?

The EU Settlement Scheme: Employer Toolkit contains relevant materials for you to provide clear and accurate information to the EU citizens and family members you employ.

These materials include:

These can be downloaded and used in the workplace to raise awareness for staff that may be affected. If an employee has applied to the EU Settlement Scheme and needs help or information about their application, they should contact the EU Settlement Resolution Centre.

What are the rules when sending my workers to the EU?

There are new rules that you need to be aware of when sending your workers to the EU from 1 January 2021. 

Employers who wish to send workers to the EU for to work will need to check the rules for each individual European Member State that they wish to send workers to. Entry requirements vary and you may have to arrange for workers to obtain a visa and/or work permit. 

If you are travelling for less than 90 days in a 180-day period, you will not need a visa if you are:

  • going to a business meeting, attending a conference, attending cultural or sports events or exchanges;
  • travelling for journalistic or media purposes.

Employers should also consider the following matters when seeking to send workers to the EU:

Passports: Employees will need to ensure their passports will remain valid for longer than 6 months following the date of travel. 

Insurance: Where the UK or an EU member state is responsible for the healthcare of an individual, they will be entitled to reciprocal necessary healthcare cover akin to that provided by the European Health Insurance Card (EHIC). This can include categories of cross-border workers. 

Existing EHIC cards will be able to be used until their expiry date. After this point, employees will need to ensure they obtain a replacement "GHIC" card to maintain access to reciprocal healthcare cover.

Please note old style 'EHIC cards' and 'GHIC cards' do not apply to Norway, Iceland, Liechtenstein or Switzerland.

Please note healthcare provision under these schemes does not replace the need for travel insurance – for example they do not include cover being flown back to the UK after an accident. If you are a business that sends workers abroad, you should also check whether you need indemnity insurance for your employees.

Recognition of Professional Qualifications

As of the 1st January 2021, the mutual recognition of professional qualifications (MRPQ) between the EU and the UK no longer applies. UK nationals, irrespective of where they acquired their qualifications, and EU citizens with qualifications acquired in the United Kingdom will need to have their qualifications recognised in the relevant Member State on the basis of each country's existing individual rules applicable to the qualifications of third-country nationals as of the end of the transition period.

However, if you have already had these qualifications recognised by the relevant EU regulator before the end of the transition period (31st December 2020), there will be no change.

From January 2021, employees with recognised professional qualifications may need to seek recognition with the appropriate UK, EU or Member state level body in order to continue participating in cross border working. Employees may also contact the relevant regulatory body for their profession regarding recognising professional qualifications while working in the European Union.