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Euro Projects Recruitment Business Leaders Zoom Call 19th October Summary - Preparing for Brexit

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Stephen Brown

Euro Projects Recruitment Business Leaders Zoom Call

For Manufacturing, Engineering, Technology, Transportation & Logistics Professionals

HR & COVID-19 Update + Preparing for Brexit

Summary of Key Points: 19th October 2020

Covid-19 & Business Update

Luke Smith from Euro Projects Recruitment

Thank you for attending our 25th Zoom Call bringing you the latest information relevant to navigating the latest challenges in business.

Today we focussed on Brexit and were very grateful to David Gage and David Yewdall, partners at Smith and Williamson for joining us to share their advice.

Firstly, we have had some news on what is happening in the economy and our markets as a result of Covid-19 and Brexit and then we heard from Helen Dyke from Irwin Mitchell on the latest impacts Covid-19 is having on the legal side of employing people.

 

Economic & Financial Update:

In the last week Northern Ireland have returned to a full ‘circuit breaker lock down’ and Wales announced today that they will be going into a ‘firebreak’ lockdown at 18:00 on Friday 23rd October until Monday 9th November.

England has so far resisted this option as Chancellor Rishi Sunak warns against the economic impact of another full lockdown, saying we already face an economic emergency.

Businesses outside hospitality and entertainment remain open and essential travel between the 3 tier areas of English lockdown and mixing within work remains allowable, which is a relief to keeping some businesses open.

Unemployment is expected to exceed 8% by the end of October when the Job Retention comes to an end.

Brexit talks remained un-concluded last week, despite a previous deadline of the 15th October set by Boris Johnson and the 31st October will be the hard stop on negotiations set by the EU.

Some businesses are experiencing a pre-Brexit bounce, similar to that leading up to previous deadlines, caused by European customers of UK businesses seeking to increase buffer stocks. Of course stock is only required once so this pre-ordering will reduce orders at a later date.

To secure essential supplies such as medicines, the UK Government has signed agreements with four ferry operators to provide capacity equivalent to 3,000 trucks per week during the transition period on 1st January 2021.

Only one in 8 firms are said to be prepared for Brexit.

 

Furlough & Employment Law Update:

Helen Dyke, Senior Associate Solicitor, Irwin Mitchell LLP

DDI: 0121 214 5242

Mobile: 07435966985

  1. The Chancellor has announced that the Job Support Scheme which starts on Sunday 1 November will provide additional support to businesses forced to close due to national or local lockdowns. The government will pay up to two thirds of an employee’s salary. The outline is explained in this bulletin:

https://imbusiness.passle.net/post/102ghxy/breaking-government-will-pay-up-to-two-thirds-of-an-employees-salary-if-unable

  1. New Regulations have come into force in England which imposes potentially, large fines for employers who allow staff who are self-isolating to work anywhere other than their homes:

https://imbusiness.passle.net/post/102gh4y/employers-face-1-000-fine-for-breaching-self-isolation-rules

  1. The government has published a factsheet which fills in some of the gaps about how the Job Support Scheme will work:

https://imbusiness.passle.net/post/102gfms/job-support-scheme-the-details

https://imbusiness.passle.net/post/102gfk0/chancellor-announces-new-job-support-scheme-to-help-protect-viable-jobs

  1. Details of Irwin Mitchell’s Brexit specialist team and how they can help can be found at:

https://www.irwinmitchell.com/news-and-insights/in-focus/brexit/business

If anyone needs help (e.g. Banking, Commercial litigation, Corporate, Data protection and GDPR, Intellectual property, Employment and Immigration) please contact Helen and she will direct you to the right team.

 

Preparing for Brexit:

As we prepare for Brexit we anticipate that there will be a focus for businesses on employee mobility and VAT implications on the movement of goods in and out of the UK.

David Yewdall, Tax Partner, Smith & Williamson LLP

DDI: 0121 710 5235 : david.yewdall@smithandwilliamson.com

David Yewdall is an employment taxes specialist.

  • What will be the biggest impact on workforce management as a result of BREXIT?

The biggest impact could be allowing continued flexibility on where people can work. International employees may begin to work for UK businesses within their home country which could complicate social security obligations for those UK based organisations, as well as in other areas.

EU social security legislation will not apply when the UK leaves the EU so you may be paying employment taxes for the UK but also a much higher percentage if the employee resides overseas (e.g. French social security can be up to a top limit of 47% compared to 2% in the UK). 

If a business has social security arrangements in place for international employees before the UK leaves the EU these will remain in place so long as a ‘cross border link’ exists. If nothing is in place there is a risk the business could have home and host country social security liabilities. This will need to be clarified and validated in the next few weeks.

If there are no existing agreements in place it’s unclear what the stand point will be on this – more information will follow after the 31st of October. If you have clients or you are an organisation that is operating overseas, you need to know your obligations!

David Gage, VAT Director, Smith & Williamson LLP

DDI: 0117 376 2068 : david.gage@smithandwilliamson.com

David Gage is a VAT expert.

  • What are the biggest concerns for clients in respect of the movement of goods from the UK to Europe and vice versa?

The biggest concern for clients moving goods will be delays at borders and the associated tariffs / customs cost at each border. This will likely come as part of a no deal Brexit.

In most cases you will be expected to have a UK or EU VAT registration number if you are the importer of record and removing goods from the UK to Europe and vice versa. Moving goods through Dover will likely become very slow and busy if there is a no deal Brexit and alternative ports should be considered.

The best option is to prepare for a no deal Brexit as there is very limited time for the appropriate governments and EU countries to agree on Brexit terms.

Distance selling thresholds for the sale of goods to private individuals will disappear and those that sell online will need EU VAT registration numbers in each EU country that they do business in.

Customs declarations will be required as goods will not be in free circulation. You should determine whether you will do this yourselves or get a freight/customs agent to handle these on your behalf.

Goods from the EU will now be imports, not acquisitions. Goods into the EU will now be exports, not dispatches meaning different VAT rules apply.

In advance of the 1 January 2021 you should review/understand your supply chains, review any agreements with your customers to determine who is responsible for paying any VAT/customs duties due and consider what EU VAT registrations are required (and register if appropriate). You may also need to appoint fiscal VAT representatives in certain EU member states.  

Businesses should also note the extra VAT and customs compliance costs.

  • In respect of selling of professional services into a post-Brexit Europe, how do you see the impacts of Potential Tariffs and VAT Reverse Charge Rules?

Reverse charge rules will still operate in same way.

‘The Davids’ have kindly offered to pick up any further questions by email. 

Smith and Williamson are also producing Brexit specific updates and if you would like to receive them please email Amanda Grace at Smith and Williamson: Amanda.Grace@smithandwilliamson.com

Disclaimer:

This presentation is of a general nature and is not a substitute for professional advice. No responsibility can be accepted for the consequences of any action taken or refrained from as a result of what is said.

Tax legislation is that prevailing at the time, is subject to change without notice and depends on individual circumstances. Clients should always seek appropriate tax advice from their financial adviser before making financial decisions.

 

Other dates and topics of our Zoom Calls for your diary:

  • 2nd November, Covid-19’s Impact on the Aerospace Industry with Andrew Churchill, Chairman of  JJ Churchill Ltd.
  • 16th November, Covid-19’s Impact on the Automotive Industry with George Gillespie, President of SMMT and Chairman of Horiba MIRA.
  • 30th November, Covid-19’s Impact on innovation with Terry Spall, President of Institute of Mechanical Engineers (IMechE)

Euro Projects Recruitment is delighted to invite you to the next Business Leaders Zoom Call with a focus on the future of the Global Aerospace Industry and special guest Andrew Churchill, Executive Chairman of JJ Churchill.

We will also be joined by Stephen Brown discussing the current economic impact of Covid and Brexit on UK employment and Helen Dyke of Irwin Mitchell on employment law.

Join us at 2.00pm on Monday 2nd November 2020:

https://us02web.zoom.us/j/87360533499?pwd=dCsvVkc3VDR1TmtzZTA3R1ZOaFcwZz09

Meeting ID: 873 6053 3499

Passcode: 670572

 

In the meantime, read about the latest candidates and salary levels in your industry in our Recruitment Review and Salary Survey:

https://www.europrojects.co.uk/recruitment-review-and-salary-survey