UK-EU Trade Deal, how does it affect my business?

UK-EU Trade Deal, how does it affect my business?

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We now have a trade agreement with the EU, it has taken longer than anybody thought possible.

The trade agreement spans 1200 pages of legal jargon and I defy any small business manager to have the time and patience to have read every page (and understood each point). There are many sources of information and interpretation available outlining the different aspects of the agreement, from travel to fishing, there are too many elements of the agreement to take on board at once and not all of them will be relevant to each situation.

Whether you trade directly with EU countries or are solely UK based, the new UK-EU trade deal will impact your business either directly or indirectly.

Through this article I will try to outline the key points small business managers should be aware of now and action if required.

First, let's consider the different types of UK based businesses and the relationships they will have with EU countries.

Direct trading

- These are businesses who export, import or both with countries within the European Union. Until 1st January 2021, trading was relatively simple and cost effective with little governmental control, however with our exit from the EU trading has become significantly more difficult and legislative. Understanding the changes and how they impact your day-to-day business will no doubt be causing headaches.

Indirect trading

- Even if you have a very simple business model with no direct trading links with countries within the EU, I am confident that if you purchase products or services within the UK, you will be trading indirectly with the EU. Our trading links with Europe are so embedded, that the majority of UK businesses you trade with, will directly trade with the EU, any effect they feel (i.e. tariffs, delays, changes to requirements) will have a cascade effect on their supply chain through higher prices or delays to supply.

Businesses which only trade on an indirect basis have little scope to manage the situation themselves and are at the mercy of their suppliers to an extent. There hs been a plethora of articles and resources during the last couple of years all aimed at preparing business for the effects of 'Brexit'. Now we are over the finish line there are several tasks which can help to manage the potential risks for indirect trading.

  • Speak with your suppliers to understand the potential impact they may be experiencing, some sources may suggest sending a questionnaire asking for responses, success with this format is quite hit and miss as the time and effort required to complete a questionnaire may be excessive for the type of trading relationship you have. A more effective option is to engage directly with each supplier and talk, build the relationship and ask supportive questions to gain the responses you are seeking.
  • With the information gained from your supplier, highlight all potential risks and create a risk profile for each, outlining possible mitigation techniques (Accept, Avoid, Transfer, Treat).


Businesses who trade directly with countries in the EU have significantly more responsibility and require greater understanding of the potential pitfalls which may lay ahead of new trading relationships.

I have assembled a number of key areas which I feel will have the greatest impact on how small business trade with central Europe:

VAT and Duty

Duty Deferment Account

If you don't already have one, you will need to apply for a Duty Deferment Account to allow you to consolidate any duty payable on imports from Europe into a monthly invoice. Without this, any items you import which either carry VAT or are outside of the Tariff Free structure will nee to be paid before the goods can enter the country.

You can apply for a Duty Deferment Account on the website.

Product Commodity Codes

Whilst the UK were part of the EU, although important, when trading within the EU the use of product commodity codes carried similar levels of importance as if trading with a UK company. Now we have left the EU, the use of the correct commodity code for products you wish to export has become a pre-requisite. Without the correct commodity code, goods will be rejected by EU border checks.

You can check for the Correct Commodity Code on the website.

Import Duty

Although the UK and EU now have a tariff free trade agreement in place, there are certain product categories which may still have tariffs or restrictions applied.

You can check Applicable Tariffs and Restrictions on the website.

GB EORI Number

If you trade with the EU you will need to ensure you have a current and valid GB EORI number. Assigned to importers and exporters by HMRC, the EORI number is used for customs clearance and customs entry declarations on all products imports or exports travelling to or from the EU and countries outside of the EU.

You can apply for a GB EORI Number on the website.


EU Supplier VAT Requirements

There have been reports in the days following the end of the transition period of companies within Europe beginning to cease trading with the UK (BBC News Report). As part of the trade agreement, the assignment of VAT on the most products is not at point of entry into the UK (Standard process for trading with another country outside of the EU) but at point of sale. This now places the requirement on EU based companies to register with HMRC for a VAT account and to pay the VAT on purchases from UK customers.

In light of this it is important to understand what impact your suppliers have had with this, are they aware of the requirement, and what their intention is regarding to ongoing supply.

Goods Processed Outside of UK/EU

For goods to qualify for zero tariffs, they need to have origins within either the EU or UK, goods purchased from outside of the UK, modified and then exported to the EU may incur tariffs.

The Institute of Government have provided useful guidance on this topic and have highlighted the following examples:

"Cane sugar imported from the Caribbean and refined in the UK will not qualify for access to the EU tariff-free, nor will basmati rice imported from India and milled in the UK. Any meat product must contain only meat from animals born and raised in the UK or the EU".

Travelling and Working

EU Business Travel

As part of the agreement, there have been restrictions to free travel for UK business within the EU region. The restrictions are relatively minimal with a maximum of short term travel limited to a total of 90 days within a 180 day period, although this restriction appears to allow for extensive travel, without careful monitoring companies could find themselves close to the limits.

This restriction does not automatically apply to 'sales trips' or trips for the purpose of direct selling, this type of trip may require additional travel permits and restrictions.

Service Selling or Working Within the EU

Businesses which have previously sold services or solutions which require the use of UK based resources working in an EU country will need to study the available information contained on as there are numerous different potential restrictions contained within the Trade Agreement Annexes.

Although there is now an overarching trade agreement with the EU bloc, each country within the union has specific requirements or restrictions and it is important to ensure that before travel your business is in full compliance.

Personal Data and Contracts

Personal Data and GDPR

The UK government has suggested that the GDPR regulations will remain part of the UK law and there is no intention to change this, however GDPR is an EU requirement and the UK now has the ability to adapt to accommodate different data legislation from other countries. At the moment there is no additional consideration need by any UK business, however with the plethora of potential trade agreements the government is working on, there may at some point be further legislation enacted.

Business Supplier Agreement Jurisdiction

Before our exit from the EU, most business trading agreements opted to place jurisdiction within the UK but abiding by the laws of the EU. From the start of 2021 this may not be the most advantageous position for UK business as it would keep UK business tied to EU law in preference to UK law. It is advisable as a matter of urgency to check all current trading agreements you may have in place with suppliers or customer in mainland Europe and either attempt to renegotiate this clause or add these contracts to your risk register and consider options to mitigate this risk.

This article is intended as a brief outline of potential risks or changes which may impact UK small business in the wake of our exit from the European Union. It is advisable research the new agreement in greater detail if you feel there may be impacts to your business. There are a number of sources of accurate and unbiased information available, a few sources have been highlighted throughout this article and below is a short list of the most important sources:

The Full Trading Agreement Document (Full unabridged PDF version)

The UK Government Summary Document (The Government's summary of the key points of the Trade agreement)

UK Trade Agreements with Non-EU Countries ( list of all current trade agreements)

Institute of Governments Trade Agreement Summary (Summary of trade after Brexit)

If you require any support or guidance on Brexit or any other aspect of Purchasing and Supply chain please view other areas of our website or complete our contact form and we will be in contact shortly.



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