Brexit: Consequences for services
When you provide services or receive them from a British party, Brexit will have consequences for you as an entrepreneur, as of January 1, 2021. In the case of a hard Brexit the WTO regulations will apply and trade with the United Kingdom is comparable to other non-EU countries. In the case of a soft Brexit, agreements will have been made to simplify trade. At the time of publishing this article (November 2020) it is not yet known what agreements (if any) are made. Therefore we advise you to prepare for a hard Brexit.
Consequences service industry to and from British companies
There can be limitations on the possibilities to provide and receive services in the UK. Employees from the EU will find it harder to be allowed in the UK, goods that are necessary for these services (for example, tools) are harder to import and export and taxation and regulations in regard to providing services can change, roaming expenses may apply and some Dutch professional qualifications are no longer recognized by the UK. You need to inform yourself if you have contracts with the UK.
Current bids can continue. However, you will have to deal with the new regulations in regard to work permits and customs. New bids for services will, most likely, follow the WTO regulations. International trade in the service industry will follow the regulations of the General Agreement on Trade in Services (GATS). The Homepage for the service industry of the WTO is a good place to start as an entrepreneur.
Even with a soft Brexit you will need to check the consequences of the UK exit for your VAT. The most current information regarding VAT can be found here on the website of the British government. Additionally, inform yourself about how the new customs might affect your activities.
Complicated service provisions
Service provision to and from the UK will, in short, be more complicated after the transitional period, There is even a risk that some services can no longer be provided. To prepare you further in regard to the coming changes, the Government information for entrepreneurs on Brexit is a good place to start.
Data streams that go to and from the UK will no longer fall under the EU-legislation as of January 1, 2021. It will affect your company as well, when you make use of this, including storing files on an external server in the UK.
Measures digital services
The Dutch government advises in the cases above to make a risk analysis of your digital service suppliers. It may be, depending on this analysis, be desirable to find alternatives for the current services and products.
Registration personal information
Check if you register personal information in the United Kingdom. Brexit may affect the way in which this information is protected in the UK. It is possible the British legislation no longer meets the privacy conditions as set in the AVG. (Dutch GDPR). In that case you will need to act. The Dutch Authority Personal Information* provides information regarding the transfer of personal information to non-EU countries.
When you provide digital services, the VAT levy depends on to whom and where you supply. To business clients outside the EU, this will always count as abroad. Bear in mind that the MOSS scheme will expire for digital services to the UK. Read more about Brexit and MOSS on the website of the European Union.
When you deal with digital data and/or services from and to the UK, you will need to check whether you are affected and need to make changes. The Brexit counter* will provide you with further information what you will need to do.
When you do business in the UK, or work with parties that do that, Brexit will demand you to research your management in this area. When you have the correct information you can implement this in the period before January 1, 2021.
Support: Brexit Impact Scan and Brexit-voucher
The government will meet you halfway concerning the correct information. The Brexit Impact Scan* by the RVO advices you on the basis of a questionnaire. Companies in need of external advice or support can request a Brexit-voucher. This is a compensation for SME-businesses that may be affected by Brexit. The voucher cover 50% of the expenses of professional advice, up to €2.500,-. Both your enterprise and the Brexit-consultant will need to meet a few conditions.
Want to know more about the Brexit consequences?
The Brexit changes are complex, unclear and manifold. Above we have listed the most general consequences you, as an entrepreneur, will have to deal with. It is too much to go into all the details and some topics will be left unspoken. Please visit Government information for entrepreneurs on Brexit for more information. Or read more about Brexit and employment here, and logistics in this article.
*Need help navigating the Dutch websites? Reach out to us.
**Article (currently) only in Dutch