Brexit series: Round-up


Adjusting to the post-Brexit environment

Natasha Frangos, Head of Corporate, was joined by Jeremy Thomson-Cook, Chief Economist at Equals Group, to deliver first hand insight into all things Brexit. View the recording above (also here).

Post-Brexit trading for UK businesses

haysmacintyre’s VAT experts, Kamlesh Chauhan and Stephen Patey, teamed up with MSI Global Alliance members Cathal Cusack from Cusack Garvey and Peter Kranendonk from Ruitenburg Adviseurs & Accountants, to record two Q&A sessions on post-Brexit trading for both B2B and B2C UK businesses.
View the B2B recording here.
View the B2C recording here.


Lizama Thahir, Senior Associate at Westkin Associates, presented at a live webinar which covered: general opportunities for businesses in Brexit, workplace visas for EU nationals and an overview of business immigration options post Brexit. View the recording here.

Related withholding tax changes

Mark Allwood, Tax Partner, and Sarah Wilson-Nolan, Senior Tax Manager, conduct a Q&A session on the related withholding tax changes caused by Brexit. View the recording here.

Post-Brexit employment tax issues

Nick Bustin, Employment Tax Director, and George Milmine, Senior Tax Manager, discuss the post-Brexit employment tax issues. The session focuses on two main topics: working from home/remote working and protocol for Social Security Coordination. View the recording here.

Financial reporting and audit implications

David Lineen, Audit Technical Director, presents on the financial reporting and audit implications of Brexit. The session focuses on key topics such as ‘front half’ disclosure, measurement of accounting balances and transactions, going concern and financial reporting. View the recording here.

Brexit series: The related withholding tax changes


The session responded to a variety of questions including:

  • What was the position before Brexit?
  • What changed when we left the EU?
  • What role does a double tax treaty have?
  • Will UK businesses see an increase in their tax burden going forward?
  • Do you expect that the loss of the Interest and Royalties Directive will make European headed groups think twice about entering the UK market?


Brexit series – Financial reporting and audit implications


We are pleased to share a presentation from David Lineen, Audit Technical Director, on the financial reporting and audit implications of Brexit.

The session focuses on the below key topics:

  • ‘Front half’ disclosure
  • Measurement of accounting balances and transactions
  • Going concern
  • Financial reporting

Download a copy of the slides below.

Brexit series: immigration


We are pleased to share the recording of our immigration webinar with Lizama Thahir, which covered the following topics:

  • General opportunities for businesses in Brexit
  • Workplace visas for EU nationals
  • Overview of business immigration options post Brexit

Thank you to everyone who attended the session and to Lizama for sharing her insightful views.

View the recording above.

Download the slides here.

Post Brexit trading for UK businesses


haysmacintyre’s VAT experts, Kamlesh Chauhan and Stephen Patey, teamed up with MSI Global Alliance members Cathal Cusack from Cusack Garvey and Peter Kranendonk from Ruitenburg Adviseurs & Accountants, to record two Q&A sessions on post Brexit trading for UK businesses. Focusing on both B2B and B2C, the session responded to a variety of questions including:

  • What is the difference for UK businesses selling goods/services to EU businesses/consumers post Brexit?
  • Are businesses required to pay import VAT and Customs Duty for goods sent to, and received, from the EU?
  • What are the new rules being introduced for EU B2C sales from 1st of July?
  • Is it worth setting up EU premises to distribute goods within the EU?
  • Can businesses set up an Irish company and sell products through this company?
  • What overseas EU VAT registration issues may arise?

View B2B recording above.

View B2C recording here.

Navigating currency markets

GBP – New beginnings or a Brexit hangover? Sterling potentially undervalued

It might seem a little controversial to call the Pound undervalued, having seen its value against the US Dollar rise over 20% since the height of the COVID-19 pandemic, but there are other dynamics to consider. Without getting drawn into the pros and cons, Brexit, as a market risk event at least, is seemingly no longer a factor. Admittedly, the UK-EU agreement is overwhelmingly ‘thin’, and Britain now faces the task of handling post-Brexit trade disruptions, which seem to have had minimal effect on the Pound, but for now, these are non-drivers for Sterling. Volatility measures for the Pound have also calmed in a reflection of increased certainty over the UK’s economic future, with some on course to return to levels not seen since before the Global Financial Crisis.

The bullish case for Sterling in 2021 is underscored by the UK’s vaccination programme, which is undeniably a winner compared to the US and major Eurozone nations. Virus headlines dominate the G10 FX space, and with good reason – those economies have been decimated by lockdown measures. The UK is on course to have most people vaccinated by the summer, meaning a reopening of the economy and greater growth prospects for H2 this year. One caveat to mention is virus mutations, which may leave the Pound vulnerable if new coronavirus strains reduce the efficacy of UK vaccines.

Looking longer-term, Sterling is heavily undervalued when considering market positioning and historical conditions. In the post-referendum world, investors were largely underweight Sterling, but we’ve seen that shift to a small, but not overcrowded, overweight position since the start of the year. At the time of writing, the Pound is trading almost 13.75% below the Sterling-Dollar 20-year average and around 11.5% below the Sterling-Euro 20-year average; an additional case can be made for mean-reversion in 2021.

EUR – Laggard under Lagarde and political turbulence

Put simply, a poor pandemic response means the Eurozone’s economy will struggle to get off the ground in 2021. Looking back to December 2020, the consensus call of a collection of economists cited in a Bloomberg article, was for a bullish Euro view of around $1.25, based on vaccine optimism. Fast-forward to March 2021, and it’s hard to escape the wave of Eurozone-negative sentiment across mainstream media. Europe’s vaccine woes dominate G10 FX news and will do for the foreseeable future as it has widespread implications for 2021 Eurozone growth. Market participants are expected to shed a little of their Euro positioning in the coming months but could plough back into the common currency in Q3/Q4, pending better global growth conditions.

Looking more holistically, Europe could be facing renewed existential concerns in the coming year, with several political events in play that could benefit the Eurosceptic cause. Elections are pending in France and Germany, the bloc’s two largest economies, while Italy remains a concern. Former European Central Bank Chief, Mario Draghi, faces the unenviable task of turning Italy’s fortunes around but will be aided by the EU’s new fiscal weapon, the Recovery and Resilience Facility – designed to hand out grants and low-interest loans to help the EU’s 27 members recover from the pandemic.

USD – Normalising global relations, runaway stock market, too much stimulus?

While the outlook could be GBP-bullish, EUR-bearish, at least for the first half of 2021, the US Dollar’s valuation path is more open to interpretation. Markets went into a full-blown risk rally following Joe Biden’s Presidential election victory, with the dynamic of stocks higher, Dollar lower firmly in play. Arguably, the rally has room to continue, despite equities hovering around record highs, although it would be short-sighted to suggest that this dynamic can continue ad infinitum. Turning to global politics, the new administration has strongly suggested it will try and diffuse Trump-era political tensions, despite indicating the broad continuation of nationalistic trade policies. Domestically, the Biden administration has made it clear that it will do everything to support the pandemic recovery, having passed a $1.9tn fiscal relief package through the House of Representatives.

Looking at Commodity Futures Trading Commission data, Dollar positioning is already at historically bearish levels in a post-Global Financial Crisis era; however, the case for Dollar appreciation rests on more than a rebalancing of portfolios. Another massive dose of fiscal stimulus is expected to help spur the US economy back to growth conditions, quicker than the EU, especially if virus worries subside by the end of Q2. In this scenario, the Federal Reserve will move away from ultra-easy monetary conditions; a gradual tightening of policy may add to the Dollar’s attractiveness in the latter months of 2021.

The cap on Dollar strength depends on us revisiting an old adversary – the global growth climate. Assuming most major economies are well on the way to recovering from the pandemic in Q3/Q4, it could be a strong case for a shift out of G10 towards the Emerging Markets. In particular, China’s economy is set to keep outgrowing the US; without relying on supporting a massive deficit, the yield advantage on offer will prove a strong headwind for the Greenback.

Adjusting to the post-Brexit environment


Starting the series on 11 February, Natasha Frangos, Head of Corporate, was joined by Jeremy Thomson-Cook, Chief Economist at Equals Group, to discuss how UK businesses can navigate the new export and services rules.

If you’re interested in watching the full webinar and Q&A session, please watch the video above.

A Brexit deal agreed – the positives and negatives

The webinar began with a breakdown of the ‘Christmas Eve Deal’ agreed between the UK and EU, that took effect on 1 January 2021.

So, what are the positive takeaways from the deal? Firstly, Thomson-Cook stressed that a deal itself was a positive, considered against the ramifications of a ‘no deal scenario’ that many feared.

Goods exporters will be pleased to see that zero tariffs apply for trade, and European Conference of Ministers of Transport (ECMT) permits aren’t necessary when moving between the UK and EU.

Moving from the ground to the skies, UK airlines are still permitted to deliver cargo and passengers to the EU under the new deal, but onward legs are now no longer possible.

However, there are negative points too, particularly for UK services doing business with the EU. The loss of automatic recognition of qualifications will be keenly felt, requiring UK professionals to now register with each individual EU nation. For goods importers and exporters, the increased paperwork around customs duties and rules of origin is sure to increase time and cost.

Equally, both sides were unable to agree a plan to minimise border disruptions around physical checks on goods of a biological nature, threatening disruption and delays at UK ports.

While the positives have certainly been welcomed, the negatives to the UK-EU deal threaten uncertainty in months to come, which will inevitably lead to higher costs, more time spent on process and paperwork, and a decreased focus on productivity and profit.

So what does this mean for goods importers and exporters?

Importers and exporters will have been grateful to see zero tariffs on the movement of goods, although greater rules of origin apply now the UK is classed as a ‘third country’ in EU law.

Exporters must establish the applicable rule of origin classified by the Government, then develop origin determination, calculation, certification and the record-keeping process. This significant increase in process will come with an equivalent cost for businesses. Importers will also be required to provide more paperwork: a statement that they have documentary proof that the goods in question comply with the rules of origin.

We may see businesses reshoring to the EU as a result, especially given the notably low tolerances for waiving import and export duties.

Similarly, hauliers will be relieved that that ECMT permits won’t be required when travelling between the UK and EU, but this is also dampened by new rules – namely the increased paperwork now required at customs.

In the subsequent Q&A, Thomson-Cook touched on the UK recently applying to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), remarking that the UK opening up new customer and supplier bases will be beneficial, but the logistical difficulties of trading at a distance mean that the effect might be limited.

And for UK Services?

UK services are currently still trading on transition rules, with a deal to be agreed in March that will hopefully maintain uninterrupted business with the EU.

The biggest change may be the loss of the passporting provision, meaning that UK businesses will need to set up offices in every EU country that they wish to operate in.

Businesses will also have to assess the various ‘modes’ of business between the EU and UK, to ensure that they meet the necessary regulatory requirements for supplying EU customers.

As mentioned above, the loss of automatic recognition of qualifications is also a change that UK businesses will need to address quickly – applying for recognition in each individual member nation separately and taking into account that processes and requirements may differ significantly.

In the Q&A following his presentation, Thomson-Cook was asked how Brexit is likely to impact the UK job market. A sizeable question, this largely hinges on which sector is under examination. The COVID-19 furlough scheme has kept the market in a ‘cryogenic stasis’, he remarked, and a true picture will only emerge once the support schemes end. From an immigration perspective, the points-based immigration system has prompted a real issue in the services sector where local employers in the UK are now denied access to EU talent pools.

In the long term, this immigration change may lead to rising wages in these sectors, or potentially a significant decline in these services as staffing issues emerge. However, in the short term, office-based sectors are likely to see little effect of this change, with the key consequence being the notable increase in the amount of professional advice and support needed to navigate the post-Brexit circumstances.

Keeping an eye on Sterling

Since the Brexit transition ended on 1 January 2021, the British Pound has performed the best out of all G10 currencies, Thomson-Cook noted. However, this comes with an advisory that many in the industry expect that it will be the first to fall once the world begins to recover from COVID-19.

The UK’s recovery may be hindered by a second-round effect of Brexit, Thomson-Cook predicted – whether this takes the form of smaller issues that snowball (such as increased operational costs leading to decreased profitability) or larger pitfalls (such as ongoing negotiations over financial services).

Whilst COVID-19 is an acute pressure on the UK economy, he remarked, Brexit will likely function more as a categoric weakening in the long term. The ‘constructive ambiguity’ approach favoured by the Bank of England and potential tax hikes in the March Budget also hold potential to dampen the UK’s economic outlook, leaving Sterling in a tricky position through 2021.

The big topic in markets at the moment, Thomson-Cook remarked, is whether the UK will see inflation rise – and how long-lasting this may be. The current rallies in stock markets can be laid at the feet of ‘the great reflation trade’, namely how the inflation is expected to rise as the world recovers from the COVID-19 pandemic.

Given the hit to demand – across almost all sectors – as a result of the pandemic, inflation is unlikely to rise until consumers are enabled to spend some of their lockdown savings. Whilst global stimulus packages are welcome, Thomson-Cook compared their effect on the markets to similar packages following the 2008 Global Financial Crash, where significant inflation was predicted but never materialised.

Business and consumers can both expect interest rates to remain low, he predicted, until consumer spending picks up and inflation can rise in conjunction.

Future topics featuring in haysmacintyre’s Brexit series includes post Brexit trading for UK businesses, immigration, withholding tax, employment tax and more. Our website will be updated with further information in due course.

Post Brexit summary: FAQ’s for B2B businesses

UK businesses

Following the deal made with the EU, what is the difference for UK businesses selling goods to businesses in the EU post Brexit?

Although it was publicised that there would be no tariffs under the deal, this only applies to goods that comply with certain rules of origin (broadly speaking they are made from materials originating in the UK). Therefore, it is still important to check whether Customs Duty may apply to goods that are being sent to the EU, especially if UK businesses are importing components from outside the EU.

UK businesses will no longer have to report sales on an EC Sales List for goods sent to the EU.

What is the difference for UK businesses selling services to businesses in the EU post Brexit?

With the exception of certain services where the place of supply is covered by special rules (ie services relating to land, performances, and electronically supplied services), services will be treated as being exported services (or specified services with credit) which will be zero-rated for UK businesses. This will be of interest to Financial Services businesses in the UK trading with the EU as, post Brexit, some of their previously exempt services could qualify for VAT on associated costs to be recovered.

Is Intrastat and EC Sales List reporting still required?

If you were already submitting Intrastat forms, you will still need to submit arrival forms at least for 2021. However, you no longer need to submit dispatches forms for goods leaving the UK.

EC Sales Lists will not be required unless you are a business established in Northern Ireland, in which case special rules apply (see below).

How do I pay for UK VAT on imported goods from the EU?

If you are importing goods from the EU or the rest of the world, you should account for VAT using what is known as ‘postponed VAT accounting’ in your UK VAT returns. This means that you will not be required to pay import VAT in order to clear the goods when they enter the UK. You will need to obtain and use your UK EORI number for the importation and advise the shipping agent that you wish to use ‘postponed VAT accounting’.

Provided you are able to claim back VAT in full, it will simply form an accounting entry in your VAT returns. If you are partly exempt or otherwise unable to recover VAT in full, you would enter the amount of VAT in box 4 that you are entitled to claim.

What if you are involved in moving goods to and from Northern Ireland?

Due to the requirements of the Northern Ireland Protocol (the Protocol), Northern Ireland is in the unique position of still being part of the EU VAT system as well as the UK VAT system. Businesses will need to notify HMRC that they are trading goods covered by the Protocol and such businesses need to apply EU rules and use a special ‘XI’ VAT number prefix instead of GB for the movement of these goods.

Customs entries will be required when moving goods between the rest of the UK and Northern Ireland and the Government has set up a free Trader Support Service to help with this. Businesses will need to apply for a special ‘XI’ EORI code with HMRC to complete entries.

As a result of remaining within the EU, certain EU simplifications for VAT will still apply for some movements of goods involving Northern Ireland.

What overseas EU VAT registration issues may arise?

For the sale of goods delivered to the EU where it is the UK business who is responsible for the delivery to the recipient (ie delivery duty paid (DDP)), the UK business is responsible for the import VAT and Customs Duty that may arise when the goods enter into the EU member state concerned.

EU registration issues may also arise as a result of the UK losing access to a variety of EU simplifications that were in place before Brexit, these include the following:

  • The loss of the call-off stock concession; any stock held overseas in an EU member state that is sold to a client would lead to a requirement to register for VAT.
  • The loss of the supply and install simplification (and potentially other ‘land-related supplies’) could lead to a need to register in the EU state where the goods are installed (or where the land in the ‘land-related services’ is located).
  • The loss of the triangulation simplification would lead to a need to register in another EU state, where you arrange for a supplier in one EU member state to deliver goods directly to a client in another EU state.

UK businesses can ask their client to be the importer in which case no UK VAT would be charged to the client, but the client would be responsible for import VAT and any duty (there shouldn’t be any under the terms of the deal for most goods, see above) when the goods reach the EU member state concerned (ie on DAP terms).

If UK businesses are selling goods to multiple EU member states, another option would be to obtain EU premises, register for VAT in that EU member state concerned, and to fulfil all EU orders from these premises to avoid having to register in multiple countries.

Non-UK businesses selling into the UK

What are the requirements for non-UK businesses selling goods to UK businesses?

If you are a business without an establishment in the UK, the VAT treatment will depend on who is responsible for the import of the goods into the UK. If your client is responsible for the import, they will be responsible for accounting for the import VAT on the importation and there will be no requirement for the non-UK business to register for UK VAT.

However, if the non-UK business is responsible for importing the goods into the UK, import VAT and Customs Duty will have to be paid by the non-UK business and it will be required to register for UK VAT and obtain a UK EORI number.

There is no requirement for non-UK businesses without an establishment in the UK to appoint a fiscal representative, but you must have an indirect UK customs agent who will be jointly and severally liable for any customs debts that may arise.

What has changed for non-UK businesses selling consignment stock in the UK?

As a result of the UK leaving the EU, the EU simplifications that were in place before Brexit for call-off stock are no longer in place. To the extent that any stock is held in the UK (for example, stock that is required at short notice for an ‘emergency’) would lead to a requirement to register for UK VAT.

If you are a business affected by the changes above and require any assistance with UK VAT registration or assistance in respect of EU B2B sales, we have a dedicated team of experts experienced in this area and would be pleased to help. We would be pleased to advise you further and can assist with VAT registration applications as well as any future compliance requirements. If you wish to discuss any aspect further, please contact Kamlesh Chauhan, Senior Manager, on 020 7969 5584 or via email at

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