Trade in goods and services

Posted on 24 June 2021

Trade in goods:

Significant volumes of goods of all descriptions are shipped every day between the UK and the EU. We have already seen that businesses involved in exporting or importing goods have faced significant challenges in terms of delays, paperwork and cost:

  • The TCA has provided for tariff-free trade in goods, but there are still customs formalities to comply with. Customs declarations must now be made for all goods imported into the EU from the UK. As for goods coming from the EU into the UK, the UK Government has decided to allow importers to defer their declarations until 1 January 2022.
  • In addition, complex rules of origin apply meaning that only "UK origin goods" can benefit from tariff-free trade under the TCA (and vice versa). This is to ensure that, for example, the UK is not simply a conduit for the sale of non-UK goods into the EU in order to avoid tariffs.
  • For example, electrical goods made in Asia and shipped to the UK will now not be regarded as "UK origin goods" when exported to the EU and so will attract a tariff. This has meant some businesses considering opening EU-based hubs for distribution to EU customers.
  • Notably under the Northern Ireland protocol, the Province remains part of the EU for trade purpose and so tariffs and duties may apply to the shipment of goods from Great Britain to Northern Ireland. Political discussions continue as to how to minimise the impact of these rules which were intended to avoid a hard border between the north and south of Ireland.

Trade in services:

  • Most companies or individuals providing cross UK/EU border services will find they are materially affected by Brexit. In light of the COVID-19 pandemic, business travel has been severely restricted over the past year and continues to be constrained.
  • For retailers the impact could be felt as regards the cross border provision of financial and insurance services, sales and marketing services, back office admin or customer support services.
  • The lack of any substantial agreement on trade in services in the TCA means that that it may be unlawful to "fly in fly out" to provide certain services in certain EU Member States. This is particularly one to watch for promoters and sales staff – who may be required under the terms of agreements to attend promotional events outside of the UK on a short-term basis. Business travellers should check visa requirements and any other local restrictions on permitted activities by non-EU business travellers. Even where it is permitted, visas may be required and restrictions placed on the types of activity permitted.
  • Prior planning and a review of applicable local laws will be essential for individuals and groups traveling to the EU who will need to assess the legalities of providing services on a country by country basis.
  • Indirect taxes have been at the forefront of some of the main problems facing retailers in a post-Brexit world. Customs duties have never been as critical to many businesses given their impact on the movement of goods. There have been a considerable amount of media coverage over items which were being held at ports until the correct customs tariff classification were applied, causing a knock on effect for retailers and related businesses.


  • VAT – As a result of some of the recent changes, in some instances, some retailer companies based in the EU which sell to UK customers have temporarily or permanently suspended such sales (e.g. a Dutch company made headlines in taking such action). The reason for this is that the point at which VAT is collected is no longer the point of importation (i.e. into the UK) and instead is the point of sale (i.e. the EU country where the seller is based). This has meant HMRC requiring such businesses to register for UK VAT and account for such VAT to HMRC which is not something all businesses are minded to do, or have the resources to dedicate to such practices.

For an update on tax changes for fashion importers and exporters, including those relating to sales VAT, import VAT, customs duty, and border controls and procedures, please click here.


  • There are no plans to water down pre-Brexit EU consumer laws, which were and remain part of UK law and nothing in the initial post-Brexit era suggests that this is about to change imminently, at least when UK consumers are buying from UK businesses (though some technical changes have occurred as a result of the UK's exit).
  • In contrast, there are now additional complexities for UK consumers purchasing from EU-based businesses, which will become more acute when issues arise with those purchases. As explained further below, UK retailers selling to EU customers must also be alive to EU and national consumer protection laws in the relevant countries for those customers, and may find themselves subject to both regulatory enforcement and consumer actions in those territories. 
  • When selling products or services to UK or EU consumers, UK retailers will therefore still need to continue to comply with rules on misleading advertising, unfair terms, and rights to refunds. EU laws in these areas have been carried forward into UK law post-Brexit. Over time, however, UK consumer law may diverge from EU law and so retailers may need to consider two sets of rules.
  • A number of changes to EU consumer laws will take place over the next few years and this will no doubt introduce additional compliance costs, for example, through different sets of terms and conditions being required. For example, EU Member States must implement the Sale of Goods Directive into their national laws by 1 July 2021 and apply the measures from 1 January 2022. UK traders supplying to EU-based consumers will therefore need to review the laws in each relevant Member State where they trade. Another relevant development is the Enforcement and Modernisation Directive which Member States must implement by 28 November 2021, and apply from 28 May 2022, and which introduces a range of new obligations for traders, and new rights for consumers, backed by significant penalties for breaches of EU consumer laws.
  • In relation to advertising, many of the rules covered by the relevant Codes reflect EU law or UK law derived from EU law. For now, no changes are anticipated to the existing regime, though under the Protocol, advertising in Northern Ireland will need to comply with EU rules, in the event that these change (this could, for example, impact in the future on advertising of foods and medicines).

Product marking:

  • One issue that will impact many retailers relates to the product marking system, which indicates conformity with health, safety and environmental protection standards for certain products, including electrical products and toys.
  • The UK now has a new UK Conformity Assessed (UKCA) regime for goods sold on the GB market (England, Wales and Scotland), replacing the EU CE regime.
  • While the UK Government has provided for a transitional period (until 1 January 2022) during which most products sold in the UK can continue to have the EU CE mark, the new UKCA mark is not recognised in the EU. It also cannot be used alone for goods placed on the market in Northern Ireland, which has its own regime and requires the CE marking or UK(NI) marking.
  • In addition, some products require the new UKCA marking immediately (e.g. those that require mandatory third party conformity assessment in the UK).
  • For more information on the UK's new product marking regime, click here.

Read more about the impact of Brexit on trade and goods in services.

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