On 24 December 2020, the European Union and the United Kingdom reached an agreement in principle on the EU-UK Trade and Cooperation Agreement. Content on the site is being monitored to reflect this and the changes.
Northern Ireland has left the European Union single market in services on 1 January 2021 together with the rest of the UK.
Northern Ireland will remain part of the UK single market in services.
The Northern Ireland Protocol which provides for special treatment for trade in goods in Northern Ireland does not apply to services.
The European Union and the United Kingdom have now reached an agreement in principle on the EU-UK Trade and Cooperation Agreement. The Trade and Cooperation Agreement covers professional and business services (e.g. legal, auditing, architectural services), delivery and telecommunication services, computer-related and digital services, financial services, research and development services, most transport services and environmental services.
The Agreement provides for a significant level of openness for trade in services and investment. There will be change.
Trade in Services – What Next?
If your business provides services cross-border on the island of Ireland or to GB, you should review and act on any changes in the rules on doing business that may apply to you from 1 January 2021.
This section will outline the key areas of change and signpost you where possible.
- To read more about changes to services outlined in the Trade and Cooperation agreement , see section 2 of the EU recently published Q&A on Services and Investment, click here.
- To read more from GOV.UK on selling services to the EU, Switzerland, Norway, Iceland and Liechtenstein, click here.
Some Key Areas Explored…
- There is no distinction between Great Britain and Northern Ireland in relation to trade in services. The special provisions of the Northern Ireland protocol apply only to goods.
- Customs procedures and duties apply to goods only and not to services.
- In most sectors, there will be few immediate direct changes. Most of the rules about doing business in the other jurisdiction will remain highly aligned and similar. The UK has replaced most existing EU regulations with new identical rules.
- The Common Travel Area will preserve the rights of Irish and UK citizens to travel to live and work in the other jurisdiction. They will have immediate settled status, with guarantees for many health social services and other rights.
- EU 26 (i.e. non-Irish non-UK citizens) will be subject to immigration controls in the United Kingdom. UK citizens will be subject to immigration controls in EU 26 countries (all of the EU except Ireland). There will be visa-free movement for social visits and some short-term business reasons, the details of which will depend on the immigration rules in the country concerned
- In some areas, many involving larger-scale providers, such as in certain financial services, communications, transport and a few other sectors, there are single EU-wide authorizations and licenses which will no longer apply to the United Kingdom and will no longer be available to United Kingdom-based businesses. These kinds of service providers would require a new authorization to do business cross-border.
- In road transport, the existing rights of providers to undertake cross-border services has been confirmed but with new more limited rights in relation to cabotage (journeys within other the jurisdiction).
- The EU wide system of qualifications recognition no longer applies. However, the Irish and UK governments have pledged to have their regulators cooperate to continue to recognize qualifications granted in the other jurisdiction insofar as possible.
- The TCA continues the mutual recognition of EU and UK data protection regulation until 1 July 2021, to allow time to conclude a long-term recognition arrangement. If this is not done by that date, businesses will need to put in place additional protections when moving private data between the EU and the UK.
Based in Northern Ireland – The Government has updated its guidance on structuring businesses in the European Union and EEA after 1 January 2021. It contains useful links to Companies House resources. Find out if your business will need to report new information to Companies House after Brexit, and how to do this for more information from GOV.UK click here.
If your business or group includes a company formed in Ireland, new requirements ‘may’ apply, unless it has a director who is an Irish citizen. You may need to obtain a bond to the value of €25,000 or a certificate from the Irish Revenue Commissioners to certify that your company has a real and continuous link with a business in Ireland. See the guidance on the Irish Companies Registration Office website here.
Based in Ireland – Businesses in Ireland whose group includes a UK incorporated company or branch should review the UK Government’s guidance on company registration changes from 1 January 2021. For more information, click here.
Guidance on changes in companies registration procedures for Non UK companies is available from the UK Companies House here.
Based in Northern Ireland
EU/EEA Public Sector Contracts – Businesses that hold, rely on, or intend to tender for public sector contracts in Ireland or another EU state, should take note of the important changes that now apply, i.e. after 1 January 2021.
The EU rules on the procurement of public sector and certain utilities contracts will no longer apply to the United Kingdom.
The UK is joining the World Trade Organisation’s Agreement on Government Procurement, of which the European Union is already a member. This provides a level of continued access to public sector contracts in other EU states. However, the terms and conditions of access as well the enforceability of the rules, will change. Businesses that may be affected should review the position as it applies to them, and consider what steps they may need to take.
The UK Government has published guidance on overseas public sector contracts after 1 January 2021. The guidance includes important links that provide detailed information on the Agreement on Government Procurement. To view this guidance, click here.
Based in Ireland
UK Public Sector Contracts – Businesses in Ireland that hold, rely on, or intend to tender for public sector contracts in Northern Ireland or Great Britain should take note of the important changes that now apply, i.e. after 1 January 2021. The EU rules on the procurement of public sector and certain utilities contracts will no longer apply to the United Kingdom.
The UK is joining the World Trade Organisation’s Agreement on Government Procurement, of which the European Union is already a member. This provides for some level of continued access to public sector contracts in the UK. The terms and conditions of access as well ass the enforceability of the rules will change. Businesses that may be affected should investigate the position as it applies to their business, and consider whether any steps are required.
The Office of Government Procurement has published a detailed information note on the effect of Brexit on public sector contracts. It also discusses the Agreement on Government Procurement which applies between the United Kingdom and European Union after 1 January 2021. It is available for download here.
The OGP has established a dedicated Brexit contact point. For Brexit related queries, please email Brexit@opg.gov.ie.
Under the Northern Ireland Protocol, Northern Ireland will hold a dual position with regard to VAT, customs and the single market.
For services, Northern Ireland will follow UK VAT rules and not EU VAT rules. However, EU VAT law will continue to apply in relation to the movement of goods.
Therefore, Northern Ireland businesses could have to operate a dual set of VAT rules – EU VAT rules for goods and UK VAT rules for services.
- For companies based in Northern Ireland, click here for more information.
- For companies based in Ireland, click here for more information.
Additional information is available in the European Commission Brexit Readiness Notice in the field of VAT for Services. To view this guidance, click here.
If you wish to explore VAT in more depth we do have a dedicated section on our website which will go into more detail for businesses B2B and B2C and can be accessed here.
Under the Northern Ireland Protocol certain EU laws, including the requirements of the General Product Safety Directive, Safety of Toys Directive, Low Voltage Directive, Appliances Burning Gaseous Fuels Regulations and Personal Protective Equipment Regulations, which apply in the Republic of Ireland, will also continue to apply to economic operators and products in Northern Ireland.
This means that products placed on the market in Northern Ireland will have to continue to comply with the applicable EU legislation after 31 December 2020.