On 31 December 2020, the United Kingdom joined the end of the Brexit development period and formally left the EU Single Market. After so many years of barrier-free business with continental Europe, it can be exciting to navigate this new era. Many small companies are still unsure of the changes that have now been added regarding trading with the EU.
Customers in Europe will need an EU EORI number to get goods from the UK.
- Rules of Origin – If goods shipped to the EU have more than 50% non-EU or non-British parts, these will bring tariffs. UK firms want to self-certify the origin of goods that are being shipped to the EU.
- Postponed VAT accounting – Since 1 January 2021, there is no distinction between accounting for VAT on shipped goods from the EU and exported goods from the rest of the world.
Postponed VAT Accounting (PVA)
PVA supports businesses to account for and collect import VAT on the same VAT Return, suggesting that businesses do not have to pay VAT upfront and recover it later. This is a significant benefit when operating cash flow. PVA can be used if:
1) You have a UK company that is registered for VAT.
2) You Import business goods at a net value of more than £140.
3) You Choose to use PVA on Customs documents.
4) You Use your VAT registration and EORI numbers of the declaration.
The areas highlighted above can be difficult and challenging to drive but guaranteeing that you have both the right technology and expert support is vital to running a smooth business.
Cash Flow Impacts
A recent study has revealed that due to Brexit and the pandemic, the average time taken for businesses to get the debt has doubled since 2019. With the continuous change, this trend may develop further as we head through 2021, making cash flow control more vital than ever. With some staff still being furloughed and remote working requirements, cloud technology can be used to help increase cash flow in UK businesses.
Here is an example of how a cloud-based app can improve cash flow. It can support on-time payments with personalized invoice notes that look like they have come from you. Build on great relationships with automatic “thank you” emails. Set up automated reminders to ensure bills do not remain un-chased.
Now the UK is experiencing the most rapidly changing business conditions for decades. However, using a mixture of the latest technology and with advisers such as UHY, businesses in the UK can decrease the risk and plan for the future.
Envolta Comes to Help
Here is when Envolta comes to help. Envolta strives to build long-term cohesive relationships with each of their clients. They get returns from their commitment to superior customer service. Your time is required, and their team is always available to take your call so you can move on to the next task.
Envolta gives you the independence and safety of a more advanced accounting platform without being “under” during the system implementation process. Since they work with little to medium-sized businesses, they know how big “business as usual” is. They aim to make this change process, from desktop to the cloud, as straightforward and error-free as potential.
Their accounting specialists know how big your budget is, so they keep all of their assistance on a flat fee structure. After examining your business, they will recommend the types of financial aid you will need. So you end up settling for the help you need and nothing you don’t.