The B word – Are you prepared for Brexit?

The B word – Are you prepared for Brexit?

On Thursday 23rd of June 2016 the UK voted in favour of leaving the EU. Now, four and a half years later we are preparing to leave at the end of the month. Throughout this time there has been much confusion and a lot of back and forth but as of the 31st December 2020 we will be out, deal or no deal!

We still don’t know exactly what to expect, but after this date we do know that there will be changes to key processes such as VAT and customs that may affect your business.  At Solutions, our experts are on hand to support and advise you to ensure your business takes the right steps to prepare for these changes.

How will Brexit affect my business?

In broad terms, and outside of niche industries such as farming or medical research, the following areas of business will likely have to be examined and potentially revised with regards to either the new regulations that the UK and EU will agree, or a no-deal scenario should agreements not be reached.

This is largely because the UK will no longer recognise institutions that oversee these areas, or will no longer be a part of the EU free trade area:

  • Import and export of goods to and from EU countries, including associated VAT payments, VAT refund claims and (potentially) custom and excise duties.
  • State aid, including grants and block exemptions.
  • Transport and logistics, including fulfilment.
  • Product safety or eco-compliance, including packaging and labelling that references EU licensing.
  • Copyright, trademarks and patents.
  • Environmental industrial standards, including emissions.
  • Transfer of personal data between the EU and UK.
  • Mutual recognition of qualifications and relevant licences (including audit, banking and insurance licences).

Sage have put together a Brexit Hub helping to guide businesses through these confusing times. 

Are you a UK business with UK customers?

This is how you could be affected…

Most business in the UK will need to make changes once the transition period is over however, these changes will be at varying degrees depending on the business itself.

For example, you might be a car maintenance business serving only UK customers, but the replacement parts you require might not be manufactured in the UK. Even items manufactured outside of the EU might be centrally warehoused in the EU before being dispatched to you. With this in mind, there may be delays at ports for ‘goods in’ customs clearance areas in the initial period following the end of the transition period.

Additionally, there may be extra costs involved with customs import duties that you formerly didn’t have to pay, and significant administrative overheads, including utilising an EORI number. However, for the first 6 months of 2021 there will be a postponement of vat option available on imports of goods, meaning you will not have to pay vat immediately on goods entering the country. However, if you want a more permanent long-term solution, you may have to source new local suppliers to avoid possible delays and/or plan for these delays and fees in your existing procedures.

How will Brexit affect your Sage software?

From the 1st of January the sale and purchase of goods to and from the EU will have a new VAT structure which will see most items become Zero rated. It is likely therefore that VAT codes 4 and 8 will no longer be applicable.

So, from the 1st of Jan 2021:

  • All EU customers will require their customer default vat code changing to zero rated
  • All EU suppliers will require their customer default vat code changing to zero rated

In addition to this, all sales orders and purchase orders not delivered or received on 31st December 2021 will require the vat code changing to zero rated on a line by line basis.

You will need an EORI (Economic Operators Registration and Identification) number which you will receive once you’ve registered with the HMRC. This will need to be entered in your company details and visible on various layouts.


Per stock code you can now enter a 10 digit commodity code and country of origin, all of which are available on sage 200 build summer 2019 which is version 12.00.0035 and later.

Are Sage Products ready for these changes?

Sage has a project teams who are focusing on preparing for implementations influenced by Brexit, whatever the outcome. As a Platinum Partner we are constantly being updated regarding the improvements made by Sage, so you can feel at ease that you are in safe and knowledgeable hands.

Such projects include a programme of work designed to ensure all areas of Sage products will be ready for Brexit, regardless of whether a free trade agreement is reached between the UK and EU.

Having a strong focus on legal compliance, customers can trust that whatever software you have the team at Sage will give you the tools to ensure you are Brexit-prepared.

Solutions are constantly striving to ensure our customers businesses are as efficient as possible. With a talented team of support staff and consultants we have the knowledge and skills to support you with these changes.