Why UK Companies have been advised to move to the EU Post-Brexit

business in the UK after brexit

By Caitlyn Buchanan, 05.02.2021

On 1st January 2021, the United Kingdom ceased to be a part of the EU single market and customs union changing business in the UK after Brexit. The conclusion of Brexit has inevitably resulted in additional bureaucracy that now poses a serious threat for certain business operations across European borders. More and more small and medium-sized enterprises (SMEs) in the UK have reported difficulty in securing transport firms to carry their goods to the continent due to the new requirement to provide VAT and tariff guarantees.

How can UK Companies avoid border issues caused by Brexit?

New regulations have caused a burden for business in the UK after Brexit. The Department for International Trade (DIT) has advised UK Companies that the best way to avoid border issues and VAT problems is to register new firms within the EU. By moving operations into the EU, companies can establish a base from where goods can be distributed far more freely which can help to avoid cross-border delays, additional charges, and paperwork.

What are the Rules regarding Tariff Charges?

The EU-UK Trade and Cooperation Agreement (TCA) states that tariff duties are eliminated for trade between the EU and the UK when “rules on origin” are met. These rules seek to ensure that the goods are principally composed of UK inputs. EU registered businesses have been advised to actively claim the 0% tariff rate on UK origin goods. Importers must obtain a ‘Statement on Origin’ from the UK supplier and claim the zero rate on import declarations.

Any non-EU origin goods that come through the UK into the EU may be subject to tariffs. This also applies to UK goods which exceed the permitted levels of non-EU content.

How can EU Companies continue to sell into the UK?

The EU no longer validates UK VAT numbers because the UK is no longer part of the EU-wide VAT system. This means that EU Businesses are now required to register for a UK VAT number and charge British VAT at the point of sale instead of at the point of importation. This applies to products that are valued at less than £135. All British VAT collected must then be handed over to Her Majesty’s Revenue and Customs (HMRC).

Many EU based businesses reported that they have temporarily stopped selling to individual customers in the UK due to this policy. Some companies are now taking time to register for UK VAT and adapt to the new policy. Other companies have expressed that they are not interested in collecting British taxes on behalf of the British government and have now stopped doing business in the UK after Brexit.

Why not move your UK company to Ireland?

The Republic of Ireland has a shared land border with the UK via Northern Ireland putting it in a unique position. The trade deal states that customs checks will take place in the Irish Sea allowing the open border to remain between Northern Ireland and the Republic of Ireland. Some of the new regulatory checks can be avoided because Northern Ireland will continue to be aligned with the European Single Market in a limited way.

The key advantage of establishing an Irish business is that exports can pass from Ireland through the UK to their destination with reduced customs checks and controls. Additionally, as an EU Member State, the Republic of Ireland maintains the EU Free Trade agreement allowing these businesses to trade across European borders freely.


It is expected to take months for UK Companies to gauge the full impact of these new rules on their businesses. The UK government has decided to phase in the new controls over the first six months of 2021. More information on business in the UK after Brexit is available at gov.uk/transition.

We can assist you to register a company in the EU with minimal hassle and in most cases without the need to physically travel. This is ideal given the increased COVID-19 restrictions recently announced by the governments of many EU countries. Please Contact Us today and our experts will assess your business needs and advise on your country of choice.

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