Brexit: A Guide for Business
October 30, 2019
Brexit – love it or hate it, it’s time to talk.
As the great political pot-boiler of our age twists and turns its way into its third year, the outcome is still less than certain.
The government is working to support businesses to prepare – and that’s no easy task with so many potential outcomes still on the table.
But there are sensible steps you can take to prepare.
The issue of workers’ rights has been a bone of significant parliamentary contention. Details are to be hashed out in the post-withdrawal agreement. However, PM Boris Johnson has not made any move towards preserving current EU employment laws.
Of more concern to UK business owners will be the immigration status of their EU workforce, who will be responsible for settling their own immigration status. Initial reports on the Settled Status scheme set up to achieve this point to problems and uncertainty ahead.
Even less certain is what will happen to UK nationals living in the EU while working for UK companies.
Our advice for businesses employing EU nationals is to provide reassurance wherever you can. Keep an eye on the European Works Councils – the information and consultation bodies representing employees in European multinational companies for more information as the picture becomes clearer.
Imports and Exports
Deal or no deal, a customs union with the EU does not currently appear likely. For businesses moving goods between the UK and the EU (and now potentially Northern Ireland), this changes everything.
Leaving the union looks set to see a reintroduction of customs procedures at UK borders, including declarations, duty payments, import VAT and excise duties. The reintroduction of sector-specific licencing obligations, compliance checks and other processes also looks likely.
Post-Brexit, importers and exporters to and from the EU will need a UK EORI number. Businesses moving goods between their own EU-UK companies will also need an EU EORI number for their EU companies.
If this sounds like you, and you already hold a UK EORI number, you must wait until the UK leaves the EU until applying for the EU EORI.
In short, whether your business is potato chips or microchips, importing and exporting and exporting to the EU looks set to get more bureaucratic. Companies needing an EU EORI should factor for potential delays shifting goods between UK and EU arms.
How far the UK will diverge from the EU in terms of regulation is yet another remains-to-be-seen. The post-Brexit regulatory landscape will depend on whether a deal is reached. Any subsequent trade deals with the EU and the US could cause significant regulatory changes which are hard to predict.
If a deal is reached, EU regulations will continue to apply at least until an EU trade deal is agreed later on.
As this point approaches (or not) companies should consider whether they want to operate both in the UK and the EU once a deal is reached. If the answer is yes, it may be prudent to establish new offices within the EU or consider transferring existing business registrations.
Post-Brexit, UK manufactured goods for export to the EU will likely be subject to industry-specific regulatory requirements to ensure they meet EU standards. Their distributors on the continent will be importers and may need to shoulder the cost of new responsibilities.