Q&A Brexit

We answer some of the questions below:

We transport goods to Northern Ireland for a customer. Does this qualify as export transport (0% VAT)?

Is a VAT registration in the UK mandatory?

Are British employees allowed to keep working in the Netherlands after Brexit?

We bill to companies in the UK. Do we have to state other matters on the invoice since 2021?

Do these subcontractors and self-employed persons individuals need a work permit now, post Brexit?

As an EU established company, can I import goods without paying import duties in the UK?

Can I, as UK based company, still hire employees who are Dutch nationals residing in the Netherlands?

As an US based company, can I export our goods located in a third party warehouse in the Netherlands to the UK?

What impact will the Brexit have on the social security position of my employees?

Do I have to pay import duties when importing repair goods into the EU?

We transport goods to Northern Ireland for a customer. Does this qualify as export transport (0% VAT)?

According to the Brexit protocol, Northern Ireland is for the time being considered to be part of the European Union for supplies of goods. Therefore, in principle there is no situation of export transport to which the 0% VAT rate can apply.

Customers from the United Kingdom (UK) have requested us to import goods into the UK ourselves when delivering goods. Is a VAT registration in the UK mandatory?

A VAT registration in the UK will normally be necessary, as the goods are delivered to the buyers after import into the territory of the UK. Specific exceptions may apply. An exception applies in any case for the delivery of goods to Northern Ireland.

We currently have employees with the UK nationality, working for us in the Netherlands. Some of them have lived and worked in the Netherlands since before Brexit. Are these employees allowed to keep working in the Netherlands after Brexit?

Individuals who do not have an EU nationality are principally not allowed to reside and work in the Netherlands. For UK nationals who wish reside and work in the Netherlands after Brexit, the regular Dutch immigration rules apply. An exception applies to UK nationals who established legal residency in the Netherlands before Brexit took place (in 2020 or sooner). This last group can apply for a Dutch residence permit via a simplified procedure.

We bill to companies in the UK. Do we have to state other matters on the invoice since 2021 and where should the turnover now be processed in the VAT return?

Changes to the invoice statements are necessary. In many cases, the processing in the VAT return is also different. The exact changes for the VAT return depend on various factors, such as whether it concerns the provision of services or the supply of goods. In the case of the supply of goods, it is important whether the goods are transported to Northern Ireland or not.

For projects in the Netherlands we work with UK based subcontractors and self-employed persons. The employees and contractors deployed are already active on the project. Do these individuals need a work permit now, post Brexit? What are my liabilities as principal or main contractor?

Employees and contractors with the UK nationality are not free to work or provide services in the EU. For each individual a work permit needs to be obtained before the job starts. This is a complex and lenghty process and leads in many cases to the practical impossibility to acquire a work permit in time. For you as principal, this means that you are at high risk to be held liable for penalties resulting from illegal employment, even though they are not your own employees.

As an EU established company, can I import goods without paying import duties in the UK?

In order to import goods into the UK without paying import duties, the goods must be of EU origin. The EU-UK Trade and Cooperation Agreement (TCA) includes rules about how the origin of goods must be determined. In many manufacturing processes, products include components that are sourced from non-EU countries. The rules of origin will then depend on the classification of the end product. If you want certainty on the origin of your end product, a Binding Origin Information (BOI) can be obtained in the EU. When your product does not have EU origin, import duties will become due in the UK. As you pay import duties on the customs value of the product, the determination of the customs value becomes more relevant.

Can I, as UK based company, still hire employees who are Dutch nationals residing in the Netherlands? Does Brexit have any particular consequences?

The Brexit does not impact the possibility to hire overseas employees. As in every situation, you will have to determine if the employee has a legal work status in the country of work. The place of residence and work also determines the tax liability of the employee. In this situation you will be required to respect Dutch tax legislation, and register as a withholding agent fort he payment of Dutch tax and social security contributions with the Dutch tax administration.

As an United States (US) based company, can I export our goods located in a third party warehouse in the Netherlands to the UK as of 1 January 2021?

No, when goods are stored in a warehouse, an export declaration must be submitted to export the goods from the warehouse to the UK. As of 1 January 2021 the exporter must be established in the EU. This means that an US based company cannot be the exporter of record on an export declaration. You must appoint another party in the supply chain / sales contract to be the exporter. Please note that in case of re-export declarations, the rule to be established in the EU does not apply. Please consult with your customs specialist for the opportunities in this respect.

We are a Netherlands based company and we frequently assign employees to work with our UK group company or on project in the UK. These employees have typically remained under the Dutch social security system, obtaining an A1 statement. How does Brexit impact the social security position of these UK posted workers?

In the EU, cross border social security is regulated by EU regulation 883/04. This regulation no longer applies in the relationship with the UK, at least not for new assignments. Assignment situations that already existed pre-Brexit (before 2021), and where a valid A1 is in place, will be respected. For new postings, secondments, the Netherlands and UK agreed to follow the principles from the EU regulation. This means that assignees can remain subject to the social security system of their home country, also post-Brexit. We do wish to remark that application procedures have changed, especially those on the UK side.

My goods are manufactured in France and have EU origin. I export these goods from France to UK B2B customers. After a month, the imported goods in the UK are damaged and need to be shipped back to France for repair. Do I need to pay import duties upon import into the EU?

No, there is a special arrangement in the EU-UK TCA deal for repair goods in order to prevent paying duties upon return. You need to clearly state that it concerns repair goods on commercial documents.