The UK and EU are currently negotiating trading terms for a future relationship beyond 11pm on 31 December 2020 when the transition period ends. Whatever the outcome, things will change for businesses and individuals as they trade with and travel to the EU, so it is important to prepare now. The BVRLA publishes regular EU Exit Bulletins and other resources to help members prepare for 1 January and beyond.
Join us at our next EU Exit-focussed Industry Outlook webinar taking place on Thursday 10 December.
Keep updated
The BVRLA's regular EU Exit Bulletins keep you updated by email on the latest developments of interest to the vehicle rental, leasing and fleet sectors. Anybody working for a member organisation can sign up to receive BVRLA updates or you can read them here...
Latest EU Exit Bulletin
Read previous EU Exit Bulletins here
30 November 2020
Government warns UK firms to act now on EU data flows
The UK Government is advising businesses to act now and work with EU/EEA organisations that transfer personal data to them to put in place alternative transfer mechanisms, such as Standard Contractual Clauses (SCCs) to ensure that data can continue to flow lawfully from 1 January.
The EU is currently conducting a data adequacy assessment of the UK and with only weeks to go until the end of the transition period, the EU has yet to signal that the UK’s data protection regime is adequate. If the EU grants a positive adequacy decision by 1 January 2021, it would mean that personal data can flow freely from the EU/EEA to the UK, as it does now.
Guidance for hauliers and commercial drivers
The Government has published guidance in the form of a ‘Haulier Handbook’, as a one-stop-shop for hauliers and commercial operators working internationally, providing key information on how to prepare vehicles and goods to ensure a smooth process and help minimise disruption at the border.
Green Cards and GB stickers required on vehicles
The Government is advising that UK drivers are likely to need a Green Card to drive their vehicles in the EU (including the Republic of Ireland) from 1 January 2021.
A Green Card, which is an international certificate of motor insurance, is accepted in the 48 countries that are part of the Green Card scheme. UK drivers and operators should take action to ensure that they have Green Cards for all vehicles and trailers from 1 January 2021. You can get Green Cards from the insurance company insuring the vehicle or trailer.
Drivers will also need to display a GB sticker to the rear of the vehicle and trailer, even if the number plates include the GB identifier under the EU logo. Vehicles registered in Great Britain or Northern Ireland don’t need to display a GB sticker to drive in Ireland.
Information about the UK points-based immigration system
Information for employers to help them prepare for the UK’s new point-based immigration system from 1 January 2021 has been updated to include links to a new podcast on the future of immigration.
Trading under World Trade Organisation (WTO) rules
Guidance has been updated to reflect the latest information about trading under WTO rules from 1 January 2021 if no trade agreement exists between the UK and another country.
WTO rules state that the same trading terms must be applied to all WTO members, unless there is a trade agreement between two or more countries. This is known as Most Favoured Nation (MFN) treatment. The UK currently trades with many countries on WTO terms, including China, India, Brazil and Saudi Arabia.
Resources to support businesses that trade with the EU
The Government has produced a series of videos explaining what businesses need to do to be ready for 1 January 2021, covering a range of subjects including exports and imports, customs, commodity codes and controlled goods.
The Department for International Trade is also hosting a series of one-hour webinars between 3 and 17 December tailored for UK businesses who import and export goods. You can register now for the next webinar on 3 December at 10:30 am.
HMRC is also hosting a series of webinars between 1 and 4 December to provide support with customs declarations.
New public sector procurement process
The Government has published the first of two Procurement Policy Notes, introducing the new ‘Find a Tender’ service, a new e-notification service that will be used to post and view public sector procurement notices from 1 January.
Protection of trademarks and intellectual property
The Government has updated its guidance for businesses and organisations holding EU trademarks at the end of the transition period. On the 1 January 2021, the Intellectual Property Office will create a comparable UK trademark for all right holders with an existing EU trademark.
Information for customers and users of IP about how the IP system and the Intellectual Property Office will operate after the end of the transition period has also been published.
Support for trading in or via Northern Ireland
From 1st January 2021, the Northern Ireland Protocol will come into effect and as a result there will be changes to the way goods move between Great Britain and Northern Ireland.
To help businesses and traders of all sizes to navigate these changes, the UK Government has launched the Trader Support Service and businesses are being encouraged to sign up now. The service will:
- Provide a free end-to-end support package to manage import and safety and security declarations on behalf of traders.
- Educate businesses on what the Northern Ireland Protocol means for them, and the steps they need to take to comply with it. This includes online training sessions and webinars happening now.
- Help to complete relevant declaration forms for all businesses moving goods into Northern Ireland under new processes in the Northern Ireland Protocol that start from 1 January.
The Government has published some useful information resources to support individuals and businesses as they prepare for EU Exit:
- A dedicated UK transition website where you can answer a few questions to get a personalised list of actions and also sign up to receive alerts.
- A simple checker tool to help individuals and businesses to find out what steps they need to take to get prepared for 1 January.
- A series of free business support webinars to help business leaders to check the new rules and understand the actions they need to take.
- A collection of useful videos on trading with the EU beyond 1 January have also been produced.
Keep informed
This section sets out some of the issues that BVRLA members should consider when making plans for the end of the EU Exit transition period and the possibility of an EU Free Trade Agreement or ‘No Deal’ scenario.
This is a live section that the BVRLA will be adding to as more details become clear. If there are any areas that members would like to see added, further details requested or more resources provided please email policy@bvrla.co.uk.
End of transition considerations for BVRLA members
Buying vehicles
UK Global Tariff
- As part of the EU Customs Union the UK did not have its own set of tariffs for goods imported into the UK but instead relied on the tariff schedule set at an EU level.
- Following the UK’s departure from the EU the UK has the ability to unilaterally set its own tariff levels. These are the tariffs that will be levied on imports from countries with which the UK does not have a bilateral free trade agreement (FTA).
- Government consulted on its tariff framework and in June published the UK Global Tariff which sets out the UK tariff regime.
- The duty on imported new and used cars, vans and HGVs was set at 10%. For many parts there is more variance, but most were set at 2% or 4%.
- Any vehicle arriving after 1 January which does not come from a country where the UK has an FTA will incur these duties, irrespective of when they were ordered.
- VAT is also due on the value of the vehicle when it is imported to the UK. When calculating the value of the vehicle for VAT purposes, duty, along with accessories and delivery charges are included. More details can be found on the gov.uk website.
Actions: Check processes and talk to manufacturer partners about their strategies and pricing.
Rules of origin
- Rules of origin are how a customs authority classify where imports have come from for international trade purposes. A car has multiple components: bumpers, brakes, clutches, computer software, leather seats and rubber tyres, etc. These can be made in different countries and shipped as needed to be assembled into the final product. With multiple components adding value, it can be very difficult to determine origin for some products.
- A standard part of any FTA are rules around “Product Specific Rules of Origin”. These require a certain percentage of the value of a product (i.e. the parts used to manufacture it) to be produced in the country claiming to export that product for it to qualify as being made there. If a product does not meet these conditions, it will still face the duties even if there is an FTA.
- These provisions are necessary to remove the possibly of a firm performing nominal manufacturing in a country in order to take advantage of its trade agreements and thus avoid duties.
- These agreements will often count the valued added in the nation the product is destined for towards the provision, this is call ‘cumulation’. E.g. if a car built in the UK uses parts from the EU and is then exported to the EU then those EU parts will count towards it meeting the rules of origin requirements.
- Any details on the percentage of value that would need to be added and the possible cumulation rules will be under negotiations in the EU-UK FTA talks.
- However, there are risks that the rules of origin requirements and culmination rules will be set in ways that mean some vehicles will still incur a tariff even if an EU-UK FTA is agreed. This is specifically a concern for battery electric vehicles (BEVs) where the battery is often a huge part of the value of the vehicle and batteries are imported from outside the EU or UK. This is discussed here.
Actions: Check with you partners if their product(s) are at risk of not meeting “Product Specific Rules of Origin” and facing a duty irrespective of FTAs.
Accessing vehicles from the EU
- Check with your suppliers and ensure they are prepared. Regardless of whether there is a deal or not there will be new customs procedures from 1 January 2021.
- If you deal directly with suppliers in the EU (more likely for those dealing with caravans or specialist vans/HGVs in their business) there are actions you need to take. Guidance can be found on the gov.uk website.
- The UK has allowed for the deferring of customs for the first 6 months of 2021. Have conversations with your suppliers and internally as to how this will work in your business. Irrespective of a deal there could be VAT and VAT accounting implications.
- Import VAT will be payable but postponed import VAT accounting will allow this VAT to be paid via a VAT return instead of at the time of importation. This new approach applies to imports from the EU and from the Rest of the World
Actions: Review how you source your vehicles and if your suppliers are ready for the changes in the process. If you directly import, ensure you are prepared for the customs changes and your EU partners are as well.
Using vehicles
VAT and your vehicles entering the EU
- The UK is leaving the EU VAT regime. Northern Ireland will stay in the EU VAT regime for goods but leaves for services.
- Some of the current rules around place of supply of services no longer apply for services in the EU. Some member states apply use and enjoyment rules which require domestic VAT to the charged when services are used and enjoyed in that country
- For rental and leasing operators if your vehicles are taken into the EU from the UK, the EU member state may apply use and enjoyment provisions and require a VAT apportionment based upon the time the rental or lease vehicle is in that EU member state with VAT due to the EU member.
- Similarly, if you have vehicles in the EU which enter the UK then UK VAT will be due on the short-term and long-term hire of means of transport to the extent that it is used and enjoyed in the UK. For long-term hire B2B where the customer is a UK business, the reverse charge will apply if the supplier is not established in the UK.
- Long term hire place of supply of service rules for B2B and B2C should also be considered. For B2B, the place of supply will continue to be the EU country of the hirer and a reverse charge will apply, but this is overridden if the vehicle use and enjoyment is in the UK, then UK VAT is due. For B2C the place of supply is where the customer belongs. Where the customer is based in the UK and use and enjoyment is outside the UK, no UK VAT is applicable. Conversely, UK VAT is chargeable if the customer is non-UK but use and enjoyment is in the UK
Actions: Review your VAT procedures and ensure you are prepared to for the changes, especially around UK use and enjoyment provisions.
VAT and sale of used vehicles from GB into Northern Ireland
- After the end of the transition period, the Northern Ireland Protocol will come into effect.
- The EU second-hand margin scheme can only be used for goods purchased within the EU. This will mean that the EU scheme cannot be used for goods purchased in or from Great Britain and moved to Northern Ireland after the end of the transition period. Without the scheme, VAT is charged on the full sales value, rather than the margin. The margin scheme for second hand cars is explained further on the gov.uk website.
- Government plans on taking this up with the European Commission to see if an exception can be agreed to enable it to set aside the current legal obligation under the Protocol.
Actions: Review your VAT procedures and ensure you are prepared pay VAT on the full sales value and not the margin for previously eligible used cars moving from GB to NI.
VAT and movement of vehicles (owned or through sale) from GB into Northern Ireland
- When a VAT registered business moves goods from Great Britain into Northern Ireland, VAT will be due. The business will need to account for VAT on the movement. This should be included as output VAT on the VAT return.
- Where the goods are being used for taxable sales, the VAT may also be reclaimed as input VAT on its UK VAT return, subject to the normal rules.
- Where a business uses the goods for exempt activities, or where the goods are put to a taxable use and also exempt use, it may be required to make an adjustment to its partial exemption calculations.
Actions: Review your VAT procedures and ensure you are prepared to pay VAT even when moving your own vehicles between GB and NI.
Customs procedures and vehicle movements between NI and GB
- Moving vehicles from GB to NI will require an import declaration. Firms should sign-up for support to do this on the gov.uk website.
- There is the possibly that if the vehicle is accompanied by the company selling it (i.e. staff by driving it to NI) then it could be declared as Merchandise in Baggage (MiB). The process for MiB relating to NI is still to be published.
- If an individual buys a personal car in GB and moves it to NI there’s no customs declarations needed. The Northern Ireland Protocol does not apply declaration requirements to individuals moving their own goods.
- The EU tariff may be charged on vehicles moving into NI if the goods are ‘at risk’ of moving into the EU from NI and there is no EU-UK FTA. The at risk provisions are still under discussion with the EU and further detail will be published in due course.
- Moving goods from NI to GB requires no declarations.
Actions: Review your sales and trade with NI, if you move vehicles, sign-up for support. Continue to monitor the FTA outcome, ‘at risk’ provisions and MiB process.
Driving into the EU
- Government has advised that UK motorists wishing to travel to EU and EEA member states, Switzerland, Serbia and Andorra should prepare to carry Green Cards for journeys from 1 January 2021 onwards, including when driving in Ireland.
- Green Cards will not be required to drive from Great Britain into Northern Ireland.
- The Government intends for the UK to remain part of the Green Card-free circulation area, and continues to urge the European Commission to issue an Implementing Decision that would ensure that UK motorists can drive in the EU without a Green Card, and vice versa, and are not subject to systematic border checks on insurance. However, until this is confirmed, motorists should carry green cards.
- New rules on Green Cards mean that they can now be printed out on white paper. They can also be issued electronically and printed by customers.
- The Motor Insurers’ Bureau have confirmed that insurance providers can issue hand written Green Cards to motorists, but that this should be limited to exceptional circumstances.
- VE103s are still needed in the EU and the rules around them are unchanged. However, there is an expectation that enforcement by EU police forces could increase.
- Drivers will also need to display a GB sticker to the rear of the vehicle and trailer, even if the number plates include the GB identifier under the EU logo. Vehicles registered in Great Britain or Northern Ireland don’t need to display a GB sticker to drive in Ireland.
- The UK will not be part of the EU automated electronic data exchange mechanism established to share vehicle keeper data around certain traffic offences (including speeding, using a forbidden lane, not stopping at a red light and others). It will still provide this information where requested but through a much more resource intensive manual DVLA process. More information is available on the gov.uk website.
Logistics in Kent
- Goods vehicles doing domestic logistics operations in Kent (i.e. those not leaving the country) will not have to get a Kent Access Permit (KAP) from the web service.
- The guidance published in the Border Operating Model states that, during the traffic restriction periods, it is advisable that all drivers who are transporting goods domestically carry paperwork detailing their journey so any possible delays can be minimised.
- Proposed amendments to the rules, (details of which can be found online) would allow HGV drivers working for hauliers based in East Kent to continue to use local roads to move goods around the county without risking enforcement action through issuing a Local Haulier Permit.
- Kent-based hauliers will still be required to have used the service and secured a KAP if they are travelling internationally via Port of Dover or Eurotunnel. Those hauliers eligible for these permits will be contacted separately with more information.
Actions: Review your processes for within Kent and consider providing paperwork with the vehicles to minimise delays or applying for a Local Haulier Permit if applicable.
Driving licences
- Driving licence recognition arrangements do not form part of the Free Trade Agreement discussions.
- The UK is currently engaging in bilateral discussions with individual EU Member States to agree the arrangements that will apply from 1 January 2021.
- Existing arrangements will continue unchanged for the duration of the transition period – until 31 December 2020. This means that EU driving licences will continue to be valid within the UK, and residents do not currently need to exchange their licences.
- Future arrangements around EU licenses in the UK will be publicised on the gov.uk website.
- UK license holders may require an international driving permit (IDP) to drive in some countries. This is also part of the ongoing bilateral discussions. More information is available on the gov.uk website.
Actions: Monitor GOV.UK for updates. Prepare for possible changes in the rules that could impact EU driving licence holders.
Data flows and the EU
- The UK does not yet have a data adequacy agreement with the EU confirming that its GDPR rules meet EU standards.
- Firms should ensure that their dataflows from the EU to the UK are able to continue irrespective of the granting of an adequacy agreement. The flows may be customer data, HR files, or any other data covered by GDPR. Members should examine their dataflows and where they store their data.
- For most firms, Standard Contractual Clauses (SCCs) will be sufficient to ensure data will be able to continue to flow irrespective of the adequacy agreement, or if data flows are internal to a multinational firm binding corporate rules (BCRs) could be the correct route. The ICO has detailed guidance on mitigation measures.
- If there is no adequacy agreement, the Withdrawal Agreement comes into effect and certain legacy data will be required to be treated in line with EU law. More information can be found on the gov.uk website.
- There are a number of countries which the EU views as adequate third countries (ATCs). The UK will roll over the EU's adequacy decisions as they stand at the end of the year, meaning no change for data sent to these countries.
- For data flows to the UK from ATCs, to date 11 of the 12 ATCs have confirmed they intend to allow free flows to the UK after the end of 2020. However, members will need to monitor this situation as ATCs may review this status if the EU does not grant the UK adequacy.
Actions: Review your data flows, considering what impact no adequacy agreement could have and if mitigations need to be examined.
CO2 Regulations (CAFÉ limits)
- From 1 January 2020 cars, vans and HGVs sold in Great Britain will no longer count towards EU CO2 targets for manufacturers.
- Vehicles registered in Northern Ireland will continue to count towards EU CO2 targets.
- Government has introduced its own CO2 standards for cars registered in GB which broadly mirror the targets and fines of the EU standards, with some alterations where it was felt that it was needed for the continuity of the intention of the regulations. The regulations can be found online for cars and for HGVs.
- When moving vehicles from NI to GB and the reverse there will be no need for firms or individuals to take any action around CO2 reporting. DVLA will automatically resolve this challenge.
Actions: Be aware that the CO2 regulations framework has changed, and this may have impacts on manufacturer strategy.
Accounting and audit impacts
Letters have been sent to the accounting and audit sectors on UK accounting and audit framework from 1 January 2021. These can be found on the gov.uk website. Some key takeaways are below:
- All UK incorporated companies that are currently required to use EU-adopted IFRS will need to use UK-adopted international accounting standards for financial years that begin on or after 1 January 2021. On 1 January 2021, UK-adopted international accounting standards and EU-adopted IFRS will be identical.
- UK incorporated companies or groups with securities admitted to trading on an EEA regulated market, or UK incorporated groups that issue debt from a subsidiary incorporated in the EEA, will need to comply with local regulatory provisions from the 1 January 2021.
- The Transparency Directive currently permits use of UK GAAP for companies not required to prepare consolidated accounts. However, after the transition period, it is likely that companies that are currently permitted to use UK GAAP in respect of securities admitted to trading on a regulated market in the EEA will need to prepare an additional set of accounts that comply with the relevant Transparency Directive requirements.
- Intermediate parent companies in the UK that have an EEA parent using EU-adopted IFRS to produce group accounts can benefit from the exemption in s.401 of the Companies Act 2006from the requirement to produce consolidated accounts at the UK sub-group level. This is because the UK has granted equivalence to EU-adopted IFRS.
- If the EEA parent produces group accounts that are not equivalent to those required by UK law, then the UK intermediate parent company will need to produce consolidated accounts at the UK sub-group level.
- UK incorporated subsidiaries with an EEA parent can no longer rely on the parent’s non-financial information statement. Where the UK subsidiary is itself in scope of producing a non-financial information statement, then this will need to be separately produced for financial years that begin on or after 1 January 2021. This should be included within its strategic report.
- EEA companies with transferable securities admitted to trading on a UK regulated market who use Member State GAAP, for financial years beginning on or after 1 January 2021 will need to prepare accounts in accordance with the law of the UK.
- The subsidiaries audit exemption will no longer be available for subsidiaries of EEA parents. This means that UK registered large or medium sized subsidiaries, with an immediate EEA parent, will need to have their accounts audited for financial years that begin on or after 1 January 2021. This will also apply to UK registered small subsidiaries that cannot otherwise access the small companies audit exemption.
Actions: Be aware of changes in accounting and auditing procedures that may impact your firm. This is of specific relevance to EEA parent or subsidiary firms.
Read more on...
General business advice
30 November 2020 update
Trading under World Trade Organisation (WTO) rules
Guidance has been updated to reflect the latest information about trading under WTO rules from 1 January 2021 if no trade agreement exists between the UK and another country.
WTO rules state that the same trading terms must be applied to all WTO members, unless there is a trade agreement between two or more countries. This is known as Most Favoured Nation (MFN)treatment. The UK currently trades with many countries on WTO terms, including China, India, Brazil and Saudi Arabia.
Resources to support businesses that trade with the EU
The Government has produced a series of videos explaining what businesses need to do to be ready for 1 January 2021, covering a range of subjects including exports and imports, customs, commodity codes and controlled goods.
The Department for International Trade is also hosting a series of one-hour webinars between 3 and 17 December tailored for UK businesses who import and export goods. You can register now for the next webinar on 3 December at 10:30 am.
HMRC is also hosting a series of webinars between 1 and 4 December to provide support with customs declarations.
New public sector procurement process
The Government has published the first of two Procurement Policy Notes, introducing the new ‘Find a Tender’ service, a new e-notification service that will be used to post and view public sector procurement notices from 1 January.
13 November 2020 update
New process for tendering for public sector contracts
From 1 January 2021, businesses will be able to use ‘Find a Tender’ online service to view public procurement notices published by UK contracting authorities. This will replace the requirement to publish notices in the Official Journal of the European Union.
You will still be able to use existing portals such as Contracts Finder, MOD Defence Contracts Online, Public Contracts Scotland, Sell2Wales and eTendersNI to view low value or location specific notices.
FCA invites members to ‘Brexit webinar’
The Financial Conduct Authority is inviting members to register to attend a webinar taking place at 10am on 18 November to discuss what the end of the EU Exit transition period will mean for firms. There will be presentations from specialists and an opportunity to ask questions.
The hour-long webinar is aimed at senior level staff in FCA-regulated firms who are involved in EU Exit preparations and the regulator is encouraging representatives from smaller firms to attend.
The regulator has also published Key requirements of firms on the FCA website to help prepare businesses for their new obligations when the EU transition period ends on 31 December 2020.
Trade negotiations
13 November 2020
Update on Trade Agreements
The Government has published details of the latest trade agreements, adding Côte d’Ivoire (Ivory Coast) and Ukraine to the list of countries and territories with whom the UK now has a signed trade agreement. The new agreements will take effect on 1 January 2021 and are expected to represent around £401m and £1,533m in UK trade.
Trading with developing nations
From 1 January 2021, eligible developing countries will be able to get trade preferences through the UK Generalised Scheme of Preferences, reducing or removing tariffs on imports into the UK. The announcement means that imports from 47 of the world’s least developed countries, including Bangladesh and Malawi, will not face any tariffs, supporting their economic development through business and trade.
29 October 2020 update
The UK’s trade relationship with Japan
The UK-Japan Comprehensive Economic Partnership Agreement (CEPA) was signed on 23 October.
The Government has published a parliamentary report containing an overview of the agreement, economic analysis of trade between the UK and Japan and an explanation of any changes or significant differences between the UK-Japan trade agreement and the EU-Japan trade agreement. An impact assessment has also been published to provide information on the potential economic impacts of the agreement.
Existing UK trade agreements with non-EU countries
The Government has updated its guidance on Existing UK trade agreements with non-EU countries to reflect the signing of the UK-Japan Agreement.
The guidance includes information on the trade agreements the UK has already signed and our discussions with countries the EU has a trade agreement with. The UK is seeking to reproduce the effects of existing EU agreements for when they no longer apply to the UK after 31 December 2020.
If we do not reproduce the effects of an existing EU agreement, trade with other World Trade Organization (WTO) members will take place on WTO terms from 1 January 2021.
22 October 2020 update
Update on the progress of EU trade negotiations
Responding to a statement made yesterday by EU Chief Negotiator Michael Barnier, in which he acknowledged that movement would be needed from both sides in the talks if agreement was to be reached, the Prime Minister has issued a statement confirming that the UK will welcome the EU team to London to resume negotiations later this week.
17 September 2020 update
The UK secures a Free Trade Agreement with Japan
The UK’s first major trade deal as an independent trading nation has been made with Japan. The deal will give UK businesses the benefit of tariff-free trade on 99% of exports to Japan in a deal expected to be worth an estimated £15.2 billion.
The deal is also an important step towards joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), giving UK businesses a gateway to the Asia-Pacific region and help to increase the resilience and diversity of our supply chains.
20 August 2020 update
The UK Government has published a list of countries and trading blocs with whom they have a signed trade agreement that is expected to take effect when existing EU trade agreements no longer apply to the UK, from 1 January 2021.
There is also a list of countries and trading blocs with who trade discussions are still underway and EU trading terms are still in place.
If the UK Government does not reproduce the effects of an existing EU agreement, trade with other World Trade Organization (WTO) members will take place on WTO terms when EU trade agreements cease to apply to the UK. Find out more about trading under WTO terms.
13 August 2020 update
Negotiations with the EU
- 5th round negotiations continue following 6 weeks of intense discussions
- Negotiations may continue well into Autumn
- Still significant differences between what the two sides want, particularly around ‘level playing field’ and fisheries
- Businesses are being advised to prepare now as it is looking unlikely that a deal will be reached.
Negotiations with the USA
- 3rd round negotiations continue with the USA, the second largest negotiation market
- USA has said it will apply tariffs to the EU and officials are trying to remove the threat of punitive tariffs being applied to the UK
- Time isn’t as much a pressure as with EU negotiations because the UK is not losing market access at the end of the year.
Negotiations with Australia and New Zealand
- 1st round of negotiations have taken place. Nothing yet to report as it was mainly introductory, outlining what each party hopes to achieve.
Data management
30 November 2020 update
Government warns UK firms to act now on EU data flows
The UK Government is advising businesses to act now and work with EU/EEA organisations that transfer personal data to them to put in place alternative transfer mechanisms, such as Standard Contractual Clauses (SCCs) to ensure that data can continue to flow lawfully from 1 January.
The EU is currently conducting a data adequacy assessment of the UK and with only weeks to go until the end of the transition period, the EU has yet to signal that the UK’s data protection regime is adequate. If the EU grants a positive adequacy decision by 1 January 2021, it would mean that personal data can flow freely from the EU/EEA to the UK, as it does now.
13 November 2020 update
Managing data internationally beyond 1 January
Members who receive and transfer personal data to or from organisations abroad, including the European Economic Area (EEA) are being invited to register to attend a webinar taking place at 11am on Wednesday 18 November. This webinar will provide information on the actions you should take to prepare your business for new rules from January 2021 and will discuss The UK Data Prote ction regime from January 2021, Data Adequacy and Data Preparedne ss.
Experts from the Department for Business Energy and Industrial Strategy and the Department for Culture Media and Sport will be hosting the webinar and attendees will have the opportunity to ask questions. The BVRLA is keen to hear from members on issues relating to data preparedness and what the implications will be for members’ businesses should the EU not grant an Adequacy Agreement to the UK. Email BVRLA Senior Policy Adviser, Thomas McLennan with your views.
Financial support and advice
13 November 2020 update
Claiming VAT refunds from EU countries
The Government has published guidance on how to claim VAT from EU member states from 1 January 2021 advising that you can continue to use the EU VAT refund system to claim a VAT refund on expenses incurred before 1 January 2021 in EU member states, until 11pm on 31 March 2021.
You will not be able to use the EU VAT refund system to claim refunds of VAT on expenses incurred in an EU member state on or after 1 January 2021.
20 August 2020 update
Be aware of mobile roaming charges from January
From 1 January 2021, the guarantee of free mobile phone roaming throughout the EU, Iceland, Liechtenstein and Norway will end. Members are advised to check with your phone operator to find out about any roaming charges that you or any employees going overseas might incur from January.
13 August 2020 update
EU funding
Businesses are being reminded that they can still apply for EU funding under the current spending framework and a full list of funds available is published on the Gov.UK website. The deadline for applications will depend on which fund is being applied for.
Customs declaration grants
The UK Government is offering three customs declaration grants to help businesses with funding for recruitment, training and IT improvements to enable their business to complete customs declarations. PricewaterhouseCoopers (PwC) is administering the scheme on behalf of the HMRC and applications should be made online through PwC.
Trading online
Rules relating to online activities
Guidance has been published on the eCommerce Directive after the transition period, as rules relating to online activities in EEA countries may newly apply to UK online service providers who operate in those countries from 1 January 2021.
The eCommerce Directive currently allows EEA online service providers to operate in any EEA country, while only following relevant rules in the country in which they are established. This framework will no longer apply to UK providers as the UK will have left the EEA. Firms are being advised to prepare for these changes now.
13 August 2020 update
.EU domain names
From 1 January 2021, you’ll no longer be able to register or renew an .eu domain name if your organisation, business or undertaking is established in the UK but not in the EU/European Economic Area (EEA), or you live outside of the EU/EEA and are not an EU/EEA citizen. Businesses with an .eu domain name should check eligibility and, if necessary, discuss with your local domain name registrar whether to transfer your internet presence to another top-level domain.
Protecting your business and brand
30 November 2020 update
Protection of trademarks and intellectual property
The Government has updated its guidance for businesses and organisations holding EU trademarks at the end of the transition period. On the 1 January 2021, the Intellectual Property Office will create a comparable UK trademark for all right holders with an existing EU trademark.
Information for customers and users of IP about how the IP system and the Intellectual Property Office will operate after the end of the transition period has also been published.
13 November 2020 update
Support on managing intellectual property
The Intellectual Property Office is inviting members to register to attend a webinar taking place at 2pm on Tuesday 17th November to hear about changes to registration of EU Trademarks and Designs and changes to copyright licencing.
The IPO will also provide an update on operational changes to office processes for the registration of trademarks, designs and patents after the end of the transition period.
29 October 2020 update
Free webinars discussing legal changes from 1 January
The Ministry of Justice, Law Society and Bar Council are holding a series of free webinars, including:
11 November 2020, 10:00 - 11:00 End of transition and intellectual property. Register here to attend this webinar, exploring how in future UK businesses and lawyers can both protect and enforce their Intellectual Property rights across Europe.
13 August 2020 update
International trademark registrations
International trademark registrations protected in the EU under the Madrid Protocol will no longer enjoy protection when the transition period ends. To address this, on 1 January 2021, the UK Government will create a comparable trademark (IR) in relation to each international (EU) trademark designation which has protected status immediately before 1 January 2021.
Northern Ireland and the UK internal market
30 November 2020 update
Support for trading in or via Northern Ireland
From 1st January 2021, the Northern Ireland Protocol will come into effect and as a result there will be changes to the way goods move between Great Britain and Northern Ireland. To help businesses and traders of all sizes to navigate these changes, the UK Government has launched the Trader Support Service and businesses are being encouraged to sign up now. The service will:
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- Provide a free end-to-end support package to manage import and safety and security declarations on behalf of traders.
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- Educate businesses on what the Northern Ireland Protocol means for them, and the steps they need to take to comply with it. This includes online training sessions and webinars happening now.
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- Help to complete relevant declaration forms for all businesses moving goods into Northern Ireland under new processes in the Northern Ireland Protocol that start from 1 January.
13 November 2020 update
Placing manufactured goods into Northern Ireland
Guidance has been published on what you need to do to comply with regulations on manufactured goods you place on the Northern Ireland market from 1 January 2021.
There are different rules for goods regulated under the old approach, goods covered by national rules (non-harmonised) and certain other goods, such as medical devices and civil explosives. EU rules will continue to apply to most ‘old approach goods’ in Northern Ireland, which includes vehicles.
Section 2 of the Guidance on Moving goods under the Northern Ireland Protocol has also been updated.
29 October 2020 update
The Northern Ireland Protocol and the movement of goods
New guidance has been published on moving excise goods as freight under the Northern Ireland Protocol in addition to guidance on Accounting for VAT on goods moving between Great Britain and Northern Ireland from 1 January 2021.
For those who move goods from Great Britain to Northern Ireland, or vice versa, the Trader Support Service is also available to provide guidance and support relating to the Northern Ireland Protocol.
17 September 2020 update
CMA to oversee new ‘Office for the Internal Market’
The UK government has laid out plans to establish an independent monitoring body, the Office for the Internal Market (OIM), who will oversee the functioning of the UK internal market.
The body will sit within the Competition and Markets Authority (CMA) and provide independent, technical advice to parliament and the devolved administrations on regulation that may damage the UK’s internal market.
The CMA will have powers to monitor and report on the effectiveness of the internal market, and will need to report on the functioning of the internal market every 12 months, and the effectiveness of the bill’s provisions on mutual recognition and non-discrimination every five years.
Controversial UK Internal Market Bill presented to Parliament
The Government presented the UK Internal Market Bill to Parliament on 9 September, which is designed to guarantee that companies can trade unhindered in every part of the UK.
The Bill has made headlines for the controversial provision that would allow ministers to disregard parts of the Northern Ireland protocol. The Institute for Government believes that the UK Government should be prepared to compromise on the Internal Market Bill, claiming that “the stage is now set for a major stand-off between the UK government and devolved administrations.”
In a meeting of the Withdrawal Agreement Joint Committee on 10 September, Vice President Šefčovič detailed the European Union’s concerns, and requested that the UK withdraw the UK Internal Market Bill. The UK Government made clear that the legislative timetable for the Bill would continue as planned.
20 August 2020 update
Government sets out plans for seamless trade between UK nations
The Government has laid out plans to ensure that businesses across the whole of the UK will continue to enjoy seamless internal trade when we leave the transition period at the end of the year.
The Department for Business Energy & Industrial Strategy has conducted a four-week consultation on its plans for the UK Internal Market, in which it sets out options to protect the flow of goods and services within the UK.
Many businesses depend on trade with the home nations more than any other partner. In Scotland, sales of produce to the rest of the UK are worth £52.1 billion per year, accounting for over 60% of all exports, more than all other nations which Scotland trades with combined. Similarly, about 50% of Northern Ireland’s sales are to Great Britain and 75% of exports of Welsh goods are consumed in other parts of the UK.
From 1 January 2021, powers in at least 70 policy areas previously exercised at an EU level will flow directly to the devolved administrations in Edinburgh, Cardiff, and Belfast for the first time. This will give the devolved administrations power over more issues than they have ever had before, without removing any of their current powers.
13 August 2020 update
Northern Ireland Protocol
New guidance has been published to provide support for UK businesses moving goods into, out of, or through Northern Ireland. Businesses will need to engage in new processes under the Northern Ireland Protocol, which takes effect on 1 January 2021.
The Government states that changes for goods moving from Great Britain to Northern Ireland will be kept to an absolute minimum with a new Trader Support Service, available to all traders at no cost to provide wraparound support, alongside the published guidance.
Customs and the movement of goods
30 November 2020 update
Guidance for hauliers and commercial drivers
The Government has published guidance in the form of a ‘Haulier Handbook’, as a one-stop-shop forhauliers and commercial operators working internationally, providing key information on how to prepare vehicles and goods to ensure a smooth process and help minimise disruption at the border.
13 November 2020 update
Completing customs import declarations
HMRC is inviting members to register to attend one of a series of webinars taking place between 13 and 18 November designed to explain how to make import declarations to goods between the EU and Great Britain, including simplified and supplementary declarations. Key terminology and new processes will also be explained.
The Government has published a list of customs agents and fast parcel operators who can help submit customs declarations.
29 October 2020 update
Preparing businesses who move goods between GB and EU
HMRC has written to VAT-registered businesses highlighting actions that they need to take to prepare for new processes for moving goods between Great Britain and the EU from 1 January 2021.
They explain what businesses need to do to prepare for new processes, including:
- making sure they have a UK Economic Operator Registration and Identification (EORI) number
- deciding how they will make customs declarations
- checking if their imported goods are eligible for staged import controls
These actions will not change regardless of the outcome of the Government’s negotiations with the EU. The updated Border Operating Model provides further detail on how the GB-EU border will work and the actions that traders, hauliers and passengers need to take.
Guidance updated for international road haulage
Guidance on carrying out international road haulage has been updated explaining what UK goods vehicle operators need to do to ensure that they are adhering to the rules when carrying out international road haulage as of 1 January 2021.
The guidance provides advice on what documentation is needed, including VE103 certificates when taking rented or lease vehicles abroad.
Applications open for ECMT permits on 2 November
The Government has updated its guidance on International road haulage permits: ECMT permits 2021 explaining the criteria for allocating ECMT permits and confirming what hauliers need to do as new rules will be in place from 1 January 2021 for those who carry goods to, from or through the EU.
Hauliers will be able to apply for a permit from 2 November via a digital application system and are advised to read the information on Gov.uk explaining what ECMT permits are for as well as the updated guidance.
22 October 2020 update
Government launches plans to keep trade flowing
The Department for Transport has announced its plans to keep trade flowing by minimising the risk of disruption at the end of the transition period.
A new communication campaign targeting hauliers through radio, press and digital advertising is being launched to make sure that hauliers are aware of the upcoming changes and have the correct documentation, reducing the risk of delays at the border.
It will be mandatory for all heavy goods vehicles (HGVs) using the Short Straits channel crossings to obtain a digital Kent Access Permit (KAP) and hauliers are being encouraged to apply for a European Conference of Ministers of Transport (ECMT) permit as a precautionary measure. Following the end of the transition period, ECMT permits may be needed to support hauliers accessing the EU.
30 September 2020 update
Government warns of potential delays affecting the flow of goods
The Government has published a Reasonable Worst Case Scenario outlining the potential disruption to freight travelling between Great Britain and the EU at the end of the transition period, stating that on 1 January 2021, 40-70% of trucks travelling to the EU might not be ready for new border controls.
The lack of capacity to hold unready trucks at the French ports, or to turn away freight prior to boarding in the UK, could reduce the flow rate to 60-80% of normal levels.
While the assumption is that the risk of long queues and a constraint to flow would diminish in the first three months, the actual flow of goods would depend on the length of time it takes those exporting/importing businesses that were not ready on 1 January to get ready for new requirements. There also remains a risk of continuing disruption caused by Schengen controls being applied rigorously at the juxtaposed controls at the Port of Dover and Eurotunnel.
17 September 2020 update
Government writes to businesses about new trade arrangements with the EU
HMRC has written to businesses about the new trading arrangements when the UK leaves the EU single market and customs Union, highlighting actions that need to be taken now to continue trading with the EU from 1 January 2021, including:
- Make sure you have a GB EORI number
- Decide how you’re going to make customs declarations
- See if your imported goods are eligible for staged controls
- Decide how you will account for import VAT when you make a customs declaration
- Check if Import VAT is due at the border
- Check the Controlled goods list to see if you need to complete declarations from January. If your goods are not on the list you can choose to delay import declarations until July 2021
- Check the government’s tariff tables and consider how your trade will be affected
- Sign up for the new Trader Support Service, if you move goods between Great Britain and Northern Ireland or bring goods into Northern Ireland from outside the UK
Video guidance for businesses who are brand new to customs
HMRC has created a series of short videos aimed at helping those businesses brand new to customs:
- What is Customs?
- What you need to know to bring goods into the UK?
- What you need to do to send goods out of the UK?
The Government has published a list of customs agents and fast parcel operators who can help submit customs declarations from 1 January 2021.
20 August 2020 update
Preparing for import and export requirements
From January 2021, traders who are exporting goods to the EU will need to make export declarations and ensure they have the right certificates and licences required for entry.
In order to fulfil the import process, traders will need to:
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Have a GB Economic Operator Registration and Identification - or EORI number before moving their goods.
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Have the commodity Code of their goods – which will be needed to make a customs declaration and of course to calculate duties on an import.
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Know the customs value of their goods – the rules for which are based on the WTO valuation agreement.
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Have considered whether they are able to, and would benefit from, using any of the available simplifications or facilitations, including deferring customs declarations for standard goods.
Chancellor of the Duchy of Lancaster Michael Gove made a statement in the House of Commons confirming that in order to give businesses more time to adjust, border controls would be introduced in three stages up to 1 July 2021.
13 August 2020 update
Phased approach to new border controls for trade
As of 1 January 2021, the UK will operate a full, external border as a sovereign nation. This means that controls will be placed on the movement of goods between Great Britain and the EU. To afford industry extra time to make necessary arrangements, the UK Government has taken the decision to introduce the new border controls in three stages up until 1 July 2021.
The Border Operating Model provides clarity and certainty for the border industry and businesses, including technical detail on how the border with the EU will work after the transition period and the actions that traders, hauliers, ports and carriers need to take.
Driving abroad
The BVRLA has a dedicated Taking a Vehicle Abroad web page containing all the information that members and customers need to know.
30 November 2020 update
Green Cards and GB stickers required on vehicles
The Government is advising that UK drivers are likely to need a Green Card to drive their vehicles in the EU (including the Republic of Ireland) from 1 January 2021.
A Green Card, which is an international certificate of motor insurance, is accepted in the 48 countries that are part of the Green Card scheme. UK drivers and operators should take action to ensure that they have Green Cards for all vehicles and trailers from 1 January 2021. You can get Green Cards from the insurance company insuring the vehicle or trailer.
Drivers will also need to display a GB sticker to the rear of the vehicle and trailer, even if the number plates include the GB identifier under the EU logo. Vehicles registered in Great Britain or Northern Ireland don’t need to display a GB sticker to drive in Ireland.
Guidance for hauliers and commercial drivers
The Government has published guidance in the form of a ‘Haulier Handbook’, as a one-stop-shop forhauliers and commercial operators working internationally, providing key information on how to prepare vehicles and goods to ensure a smooth process and help minimise disruption at the border.
13 November 2020 update
New regulations remove UK’s obligation to share vehicle keeper data
The Government has published new regulations removing the obligation on the UK to facilitate cross-border exchange of information on road safety related traffic offences with EU Member States.
This new statutory instrument will revoke the UK’s obligation to provide vehicle keeper data to EU Member States and the UK will not process requests for vehicle keeper data from enquiring EU Member States associated with the following eight traffic offences: speeding; not using a seatbelt; not stopping at a red traffic light; drink-driving; driving under the influence of drugs; not wearing a safety helmet; using a forbidden lane; and illegally using a mobile or another communication device while driving.
30 September 2020 update
Green cards: Motorists advised to check documentation requirements for travelling abroad
The Government has confirmed that, although the UK wants to remain part of the Green Card-free circulation area, this is subject to the European Commission issuing an implementing decision that would ensure that UK motorists can drive in the EU without a Green Card.
In the absence of this decision, UK motorists wishing to travel to EEA member states, Switzerland, Serbia and Andorra may need to carry Green Cards or other valid proof of motor insurance from 1 January.
Motorists are advised to contact their motor insurance provider a month before travel in order to be provided with a Green Card for their vehicle and trailer. New rules on Green Cards mean that if they are required, they can now be printed out by policy-holders on white paper.
For updates on documentation requirements when driving rented or leased vehicles abroad, check the Taking a Vehicle Abroad page.
20 August 2020 update
New rules for those taking pets abroad
Members may want to make customers aware that should they intend to drive abroad with a pet, new rules will apply from 1 January requiring them to act now.
The UK Government has applied to the European Commission to be listed in the EU Pet Travel Scheme and is awaiting a decision. Those taking pets abroad are advised to contact their vet at least 4 months before travelling to get the latest advice.
The updated Guidance on Pet Travel to Europe from 1 January provides full details on what steps need to be taken should the UK not be listed in the scheme.
Emission regulations
22 October 2020 update
UK will mirror EU CO2 targets post EU Exit
The Government has confirmed that the UK will mirror the EU CO2 regulations for UK registrations from January 2021.
As of next year, registrations in the UK will no longer count towards manufacturer’s EU CO2 targets. This means that manufacturers will have to meet ambitious CO2 targets in the UK after the end of the transition period, with mirrored fines and planned future reductions of 15% for cars and vans by 2025, and 37.5% for cars and a 31% for vans by 2030.
The BVRLA remains concerned about whether manufacturers will maintain an adequate supply of electric vehicles into the UK beyond January and is in regular discussion with Government on this matter.
Keep in touch
The BVRLA is keen to hear the views of members on matters relating to EU Exit policy that can support the vehicle rental, leasing and fleet industry. Members can provide input and insight by emailing the BVRLA policy team, who liaises regularly with Government to ensure that the views of the industry are heard.
EU Exit Policy Asks
29 October 2020 update
Automotive industry highlights cost of no deal
The SMMT estimates that a 10% World Trade Organisation (WTO) tariff would increase the cost of UK-made electric cars exported to the EU by an average £2,000 per vehicle. In September, production of the latest battery electric vehicles (BEVs) grew 37.0% year-on-year, with the overwhelming majority (76.6%) exported, many of these into the EU.
Last week, the BVRLA wrote to policymakers urging them to get a free trade deal done, stating that failure to do so would be disastrous for the fleet industry, estimating that tariffs imposed on new car and van imports from the EU would add £2.1 billion to the fleet sector’s annual new car costs. Tariffs would also risk hindering a green recovery with fleets needing to spend an extra £2.8 billion on battery electric cars over the next five years.
22 October 2020 update
Government warned of the impact on fleets of having no free trade agreement
The BVRLA has written to senior Government officials warning of the estimated costs that will burden the fleet industry if the UK and EU fail to reach a free trade agreement.
With 72% of fleet cars and 68% of vans estimated to be sourced from the EU, the impact of not having a free trade deal would be disastrous for the fleet industry. Tariffs would add £2.1 billion a year to the UK fleet sector’s car renewal costs and £310 million a year to the sector’s van renewal costs, according to industry figures.
In a letter sent to senior ministers and policymakers, the BVRLA has asked the Government to:
- Continue to work with the EU to reach a deal
- Protect order banks by confirming that, in the event of no EU-UK free trade agreement, there will be a waiver on the tariffs on cars, vans, HGVs and parts ordered before the end of the year which arrive after 1 January 2021.
- Implement a tariff review process now for certain key sectors to request tariff level reviews post 1 January 2021 once their full impact is apparent.
- Create a process now for firms to apply for temporary tariff waivers on specific products when there is not sufficient UK supply.
- Support the BEV market by providing additional tax incentives and grants that will maintain the supply and cost competitiveness of BEVs in the UK.
17 September 2020 update
Automotive industry unites in calls for free trade deal with EU
The SMMT has joined organisations representing EU and UK vehicle and parts manufacturers to call for urgent agreement of an ambitious free trade deal before the end of the transition period in just 15 weeks’ time.
New calculations show the catastrophic impact of ‘no deal’ with World Trade Organisation (WTO) tariffs putting production of some 3 million EU and UK built cars and vans at risk over next five years.
‘No deal’ would mean combined EU-UK trade losses worth up to €110 billion to 2025, on top of around €100 billion in lost production value so far this year because of the Covid-19 pandemic.
Covering the cost of the tariffs, far higher than the small margins of most manufacturers, would almost certainly need to be passed on to consumers, making vehicles more expensive, reducing choice, and impacting demand. Automotive suppliers’ products will also be hit by tariffs. This will make production more expensive or will lead to more imports of parts from other competitive countries.
The BVRLA understands that over 70% of fleet and business car purchases are built in the EU - all of these are at risk.
The association’s members will have to pay the tariffs or pass them on to their customers. This would be disastrous for fleets and would seriously slow the decarbonisation agenda.
UK fleets are not in a position post-Covid to absorb these costs and automotive demand will stall.
It will also become more expensive for essential user fleets to operate and significantly increase the cost for fleets looking to do the right thing and replace their vehicles with Battery Electric Vehicles.
The tariffs on parts will impact the whole life cost of vehicles and have impacts on contracts that members have already signed. Orders are already in the pipeline which would land in 2021 and these must not be hit with a tariff.
The BVRLA is asking for a deal with no tariffs and ensuring an easy flow of vehicles and parts through the border.
