There are many questions surrounding the topic of Brexit. While the ongoing negotiations between the EU and UK seek to provide some clarity around the key areas related to the Britain’s exit from the EU, there is one question all businesses need an answer to: how Brexit will affect them.
The likelihood is that the majority of businesses, if not all, will be affected by Brexit in some way, with many EU regulations that currently govern UK businesses having the potential to change. How exactly your business may be affected depends on what kind of business you run, including the sector it sits in, the services it offers, its staff and its daily operations. In this guide, we will be detailing the different ways Brexit could impact your business so that you can prepare for life outside of the EU.
- How Brexit will affect your business’s trade
- How Brexit will affect you if you have EU staff
- How your business operations will be affected
- Find out how to prepare your business specifically
How Brexit will affect your business’s trade
One of the areas that will experience change following Brexit is trade. This means that, if your business either imports or exports with the EU – or anywhere else in the world – you are likely to be affected by changes in how you do so.
Some of these changes have already been announced by the government. For example, you will now require an EORI number to be able to export with non-EU countries, and once Brexit has taken place, you will also need one to trade with EU countries. You will also need to check if your business is VAT registered to export and import, check the commodity codes for whatever you will be export and appoint someone to be in charge of managing your customs declarations and transport of goods. If you export regularly, you should consider applying for simplified declaration procedures and Authorised Economic Operators Status, which can make things easier by reducing or eliminating HM Customs guarantees and demonstrating “a quality mark” to your EU customers and suppliers.
However, there are also some changes that are still subject to what deal the UK and EU can agree on ahead of Brexit. Without a deal in place, the UK will not have access to tariff-free trade in goods and free trade in services it currently has within the EU. The UK will have to trade on World Trade Organisation terms both for countries within the EU, and the Rest of the World where no free trade arrangement has been agreed. This could have a negative effect on the UK’s global trade.
The impact of these changes is still up for debate: while some argue the UK will be able to secure better deals without the EU, there is a possibility that we will face increased tariffs, new trade barriers and tougher legislation. For businesses, this may mean facing increased costs when exporting and importing as well as having to acquire new licences and meet new rules. Until the UK reaches a trade deal with the EU, it is not certain what exactly trade will look like, but you should be prepared to factor in higher trade costs and changes to operations in your business.
How Brexit will affect you if you have EU staff
Another key area that Brexit is set to bring change is in immigration. The UK government intends to bring in a points-based immigration system that emphasises highly skilled workers. Migrants coming into the UK will be required to speak English and have a job offer of at least £20,480, and will be awarded additional points for factors like having a PhD. However, this scheme was outlined in February’s Immigration Bill, which has since been shelved by the government. Further clarity is therefore needed from the government as to what exactly post-Brexit immigration will look like.
If the UK does put new immigration restrictions in place, cheap labour from EU nationals may no longer be as easy to come by for UK businesses. Immigration is also likely to fall following the new system, which may lead to skills shortages for some industries. This means businesses will need to find new ways to recruit the labour they need, which mean they may see their staff costs increase.
If you have EU staff already working for you, you will need to make sure they have applied to the EU Settlement Scheme. This scheme will allow EU citizens working within the UK, but without British citizenship, to continue to live and work after Brexit. If any EU national do not have settled status by the deadline of the 30th June 2021 (when the scheme ends), they may face being refused a work visa, being no longer allowed to live in the UK, so it is essential you understand what their intentions are.
How your business operations will be affected
Even if your business does not trade or employ any staff from the EU, it is likely that you will still be affected in some way. This is because a large amount of the legislation that governs how businesses operate comes from the EU – and, once the UK is no longer part of the EU, some of this legislation will no longer apply, although some are already unpinned by UK law.
EU legislation affects most UK businesses including the Working Time Directive – which sets out how many weekly hours employees can work, what breaks they can take and what annual leave they can get – as well as many other rules involved with employment, energy, environmental impact, safety and many more business aspects.
This means that the UK leaving the EU has the potential to change almost every part of your business. However, it is highly likely that, dependent on the deal the UK and EU reaches, many of the existing regulations will either remain in place or be swapped with lookalike laws. Again, details on these regulations should become clearer as Brexit negotiations proceed.
Find out how to prepare your business specifically
While there is still more to be revealed about exactly how Brexit will affect business, there is some guidance already in place to help you prepare your business for whatever eventuality.
The government website has an easy tool to help you find out exactly how your business will be impact, using the most up-to-date information regarding Brexit. You will just need to answer a few questions about your business and its operations in order to find out the relevant information for you.
If you need more tailored guidance, you can access advice from our business advisors.
For more advice and to book a bespoke one to one advisory session contact one of our expert advisors on 0330 2020 216 or email [email protected].