Brexit Update: Customs Declarations and Changes for Employees

Brexit Update: Customs Declarations and Changes for Employees

To prepare for Brexit, HMRC has announced funding initiatives to train customs agents; meanwhile, UK employees working in the EU will also experience Brexit changes.

HMRC Funding

In September 2019, the UK government launched a £16 million funding initiative to help businesses handle the associated IT costs and training requirements of post-Brexit customs declarations. Following that announcement, in October 2019, HMRC revealed a similar initiative: £10 million in grants to help businesses increase their capacity to manage customs declarations when the UK eventually leaves the EU.

Availability: All businesses based in the UK, or those with branches in the UK, will be able to apply for the HMRC grant. In more detail, the money will go towards helping businesses increase their post-Brexit customs declarations capacity by recruiting new employees. Grant allocations include:

  • Up to £3,000 for recruitment (per employee)
  • Up to £10,000 for salary costs (per employee, for up to 3 months)

50% of the funding will be made available upfront. The remaining 50% will be made available when the employee has completed 1 month in their post.

Applications: The £10 million in funds will be available until 31 January 2020 - or until all funding has been allocated. Businesses that previously applied for the September wave of funding are eligible for the new HMRC grants and may still apply.

Applications should be made through the HMRC website portal.

UK Employees Working in the EU

The UK government has also issued Brexit guidance regarding the application of EU Social Security Coordination Regulations, should the UK leave the EU without a deal.

Under the current arrangement, the regulations ensure that EU employees do not pay ‘double’ social security contributions should they be working outside their home country. If the UK leaves the EU without a deal, those regulations will no longer apply: in that situation, UK employers and employees may need to start making social security contributions in both the UK and their country of employment, simultaneously.

HMRC Guidance: In the event of a ‘no deal’ Brexit, UK employers should take the following steps to manage their social security obligations:

  • UK employees currently working in the EU (or the EEA or Switzerland) and in possession of the UK A1/E101 form, will continue to pay UK National Insurance Contributions for the time stipulated on the form.
  • Should the A1/E101 validity period go beyond the date on which the UK leaves the EU, the employer must contact the relevant EU (EEA/Swiss) authority to verify their social security contribution obligations.
  • Employers should receive a replacement A1/E101 after Brexit to ensure their employees continue to make the appropriate social security contributions. Employers can access application forms on the HMRC portal.

Reciprocal Arrangement: Negotiations to maintain reciprocal social security coordination between the UK and the EU are ongoing. The current proposition is to maintain the reciprocal arrangement in a transitional period until 31 December 2020 - at which point a new arrangement will come into effect.

The UK government has an updated social security resource page for UK employers sending their employees to work in the EU, the EEA, or Switzerland under a no-deal Brexit scenario.

Learn more about the UK’s social security system, and the impact of Brexit, on activpayroll’s UK Global Insight Page.

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