"Time is running out" government warns businesses


Date: 20 October 2020

European Union and UK flags on a clock

The government is urging business leaders to prepare for Australia-style trading arrangements from 1 January as it launches its Time is running out campaign.

The stark call to action comes as the government is warning that the whole UK must prepare to leave the EU on Australia-style terms based on "simple principles of global free trade", after it says the European Council has left the UK "without a basis to continue trade negotiations if there was no fundamental change in the EU's negotiating position".

HMRC has written to 200,000 traders who trade with the EU to set out the new customs and tax rules coming into place and how to deal with them.

"At the end of this year we are leaving the EU Single Market and Customs Union and this means there are both new challenges and new opportunities for businesses," said Michael Gove, the chancellor of the Duchy of Lancaster.

"Make no mistake, there are changes coming in just 75 days and time is running out for businesses to act," he said. "It is on all of us to put in the work now so that we can embrace the new opportunities available to an independent trading nation with control of its own borders, territorial waters and laws."

The government has published the Border Operating Model which, it says, gives traders "the clarity they need to prepare for new rules". It has also invested £705m in jobs, infrastructure and technology at the border and provided £84m in grants to grow the customs intermediary sector.

Recognising the impact of coronavirus on businesses' ability to prepare, the UK has also taken the decision to introduce new border controls in three stages up until 1 July 2021.

Business secretary Alok Sharma said: "There will be no extension to the transition period, so there is no time to waste. There will be a guaranteed set of changes for which businesses need to prepare for, so I urge all businesses across the country to check gov.uk/transition to see what action they need to take."

He said there are actions businesses need to take now, regardless of whether the UK ends up with Australian or Canadian-style trading arrangements:

  • If you sell goods to the EU, you must prepare for new customs procedures;
  • If you travel to the EU for work, you need to check if you need a visa or work permit;
  • If you employ overseas nationals, you will need to prepare your business for the new immigration system. From 1 January 2021, if you want to hire anyone from outside the UK, including from the EU, you must be a Home Office licensed sponsor;
  • If you are a UK business or organisation that receives personal data from contacts in the EEA, you may need to take extra steps to ensure that the data can continue to flow legally;
  • If you provide services in the EU, you must ensure that your qualifications are recognised by EU regulations to be able to practice or service clients in the EU.

Businesses can get a personalised summary of the actions they need to take by using the tool on gov.uk/transition.

Business groups have expressed their concern that UK firms are currently facing both the coronavirus pandemic and an uncertain end to the transition period.

Allie Renison, senior policy advisor at the Institute of Directors (IoD), said: "Few would doubt that getting ready for no deal in the middle of a pandemic will be a Herculean task for many businesses. Our figures show that most directors think that Covid will magnify the impact of no deal … To help businesses prepare, government must work closely with directors to aid their planning, providing information as soon as it comes to light. Financial support for small firms in particular should be stepped up, whether through vouchers or tax reliefs."

Written by Rachel Miller.

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