The impact of Brexit

January 2021

For almost half a century, the UK was a member of the European Union. Twice it applied in the 1960’s for membership of, what was then, the European Economic Community. It was, in fact, a tough choice for the UK to join at that time, but it finally entered in 1973.

And now; Britain is out again.

It is not my job here to analyse all the ‘whys and wherefores’ but I have to admit that I deeply regret the 2016 decision for the UK to leave the EU. I would have loved a “Remain” and I am still sad about the “Leave” outcome.

However, it does not help to complain. Brexit needs to be skilfully managed by our governments, businesses and also by us, the members of Russell Bedford International, as the trusted advisors to our clients.

Brexit impacts on people, customs, tax and company and commercial law.

People / Individuals

The EU freedom of movement of persons no longer exists with respect to Great Britain. German citizens, for example, do not need a visa for tourist or business trips lasting up to 180 days. But anyone wanting to move to the UK to work or to study must apply for a visa beforehand.

The EU directive, which regulated social security for international employment relationships, no longer applies. Health and social insurance, citizenship, residence status, private pension provisions, even driving licences and all of those formerly well-established ‘life conditions’, need to be checked carefully when UK citizens and European citizens connect.


All goods entering the customs territory of the EU from the UK, or vice versa, are subject to custom formalities laid down by the legislation of the EU. This is already quite a challenge for companies, starting with registration at the custom’s authorities and getting an EORI number (Economic Operator´s and Identification number). Many details have to be considered in relation to import, export, re-export, Northern Ireland regulations and transit procedures.


The UK now has a new tax status; it is a Non-EU country (third country). VAT treatment of EU goods to the UK is now aligned with those from outside the EU, which means that UK VAT is imposed on imports from the EU.

All European businesses dealing or trading with the UK need to carefully control their companies’ operations and processes. After the December deal, there are still uncertainties for the UK and European countries (maintenance of VAT registrations, fiscal representations etc.), however our local Russell Bedford tax experts, who are familiar with the legislation in their country, can help clients navigate these uncertainties.

Changes in Corporate and Income tax also need to be carefully considered, for example, withholding tax exemption for dividends between companies.

Corporate and commercial law

An example of another complicated topic is related to European companies, like the SE (Societas Europaea), who can no longer have their registered office in the UK.

Newly concluded commercial contracts should take into account Brexit clauses on potential future areas of application, taxes, customs duties and clauses due for a significant adverse change in the legal situation.

We, the European partners and offices of Russell Bedford International, can help your business through this challenging and uncertain period. If you have questions or need support, please contact one of our European offices:

About the author

Klaus-Peter Hillebrand
Berlin, Germany

Klaus-Peter is the chairman of Russell Bedford’s Berlin member firm, Domus AG.

He has many years of professional experience in auditing and advising companies with a focus on real estate management. His are of specialism is in Cooperative Law.

He is an honorary professor in the field of auditing and cooperative auditing at the EBZ Business School Bochum, University of Applied Sciences and the European Education Centre for the housing and real estate industry.

Since 2008, Klaus-Peter has been a member of Russell Bedford’s International Board representing the EMEA region.

Author: Klaus-Peter Hillebrand - Domus AG, Berlin, Germany

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