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Brexit: How Does It Affect Your Business?

Brexit. Things are changing almost everyday. We will be keeping this blog post as up to date as possible, so many sure to subscribe here so you don’t miss any news! Last Updated: January 15th, 2020.

Brexit does affect you and your business. These are the most common areas that we will now see change:

  • Taxes
  • Safety Standards
  • Personal Data
  • Movement of People
  • Movement of Goods

This article will go through what has happened and what you can do to ensure you are abiding by the rules, and have adjusted your business to account for the changes. Select a title below to jump to the section that is most relevant to you:

  1. What is Brexit?
  2. Didn’t Brexit happen ages ago?
  3. How does Brexit affect trade with the EU?
  4. What about the other trade deals?
  5. How does Brexit affect my business?
  6. What are the Brexit rules?
  7. I am a UK company only selling to UK customers, am I still affected?
  8. What happens to EU citizens that I employ?
  9. What is a Brexit impact assessment?
  10. How does Brexit affect the GDPR?

What is Brexit?

Brexit is Britain leaving the EU. This occurred in a referendum on 23 June, 2016. We officially left on 31 January, 2020, but we were in a state of transition for a year, until December 31st, 2020. On January first, 2021, we ended this transition period and the final rules have been outlined.

The UK maintained the EU law as part of the Withdrawal Agreement Act, which is why we haven’t really felt any significant changes yet.

Up until almost the very last day of the transition period (December 24th, 2020, to be precise), Boris and his team continued to negotiate deals with the EU and the different countries. Here’s what they have agreed upon.

Didn’t Brexit happen ages ago?

Yes. The referendum occurred almost 4 years ago! These things take time, leaving the EU wasn’t official until January 1st, 2020. Then, Britain still needed more time, so we went into the transition period to allow the leaders of the UK and EU work out the minute details of what Brexit would look like.

How does Brexit affect trade with the EU?

Luckily for us, as agreed on Christmas Eve, 2020, the UK and EU have a free trade agreement.

What this means:

Zero tariffs or quotas will be put on the trade of goods. UK will still be seen as a third-party country to the EU, but the import/export tariffs that we face with countries like America, will not be included.

The EU also requires certain goods, such as food, from non-EU countries to be checked. If you own a business that exports food to the EU, this is something that should be at the top of your radar.

Customs will apply, so we can expect some delays, but this is probably the best possible outcome you could hope for if you deal heavily with the EU importing/exporting.

If a free trade deal didn’t go through:

UK would have had the same basic rules set by the World Trade Organization (WTO).

This means that selling in the EU would have become more difficult, as tariffs and checks would have been ramped up, causing delays and price increases. The UK would likely have also affected EU goods coming in.

What about the other trade deals?

Whilst we were part of the EU, the UK was automatically part of ~40 trade deals with over 70 countries.

So far, 27 of these deals that cover 57 countries/territories have been rolled over and started on January 1, 2021. There is still time for a few more of them to be signed, but that is something we will have to wait and see.

In the instance of Japan, a new trade deal was signed, meaning 99% of UK exports there will be free of tariffs.

We’ve written an article about what happened in regards to VAT if you’d like to learn more about the technical side of the deals.

How has Brexit affected my business?

It depends on your business. Now the deal has been put into place, we can have a good idea of how to adjust our businesses to match the new standards, quotas, and rules by answering these questions:

  1. Do I import anything from the EU?
  2. Do I export anything to the EU?
  3. Do I have any employees that are EU citizens?
  4. Are any of my suppliers going to be largely affected by Brexit?
  5. Are any of my customers going to be largely affected by Brexit?
  6. Do I have any EU based state aid that could be affected?

See our impact assessment below for more details.

HMRC has also created a useful process for importing goods from 1 January 2021, and exporting goods from 1 January 2021

What are the Brexit rules?

Please see our latest article to see a detailed report on the new Brexit rules.

We received a free trade agreement with the EU, which is great news. This means that goods can flow freely between the UK and EU without tariffs. However, we are now seen as a third-party country, and therefore customs applies to anything entering/exiting the UK from/to Europe.

I am a UK company only selling to UK customers, am I still affected?

Whilst some businesses will be more affected than others, all businesses will feel the impact one way or another.

Some of the effects are more hidden though. For example:

– You may use raw materials or parts that were manufactures outside of the UK

– You may import products from a non-EU country that has a warehouse in the EU

– There may be delays at ports for goods in customs clearance areas

– There may be extra costs involved for overheads

– You may hold data on EU citizens in which case sharing this data may not be permissible (see below)

– Your business may own a trademark that you’d like to continue to protect outside of the UK

– You’ll no longer be able to use an EU domain without a principle place of business in the EU

– You may have EU citizens as staff members (see below)

– Your clients will be affected in one way or another too

What happens to EU citizens that I employ?

Will I still be able to employ EU citizens after Brexit? Yes.

You have until 30 June, 2021 to check that they have the right to work status. Your existing employees who are EU, EEA or Swiss, will need to apply to the EU Settlement Scheme by 30th June, 2021.

After January 1st, 2021, citizens moving to the UK for work need a work visa. To do this, they will likely need a job offer from an approved employer sponsor. If you hire from the EU, and haven’t already applied, you should look into becoming an approved sponsor. This takes about 8 weeks.

What is a Brexit impact assessment?

A Brexit impact assessment looks at how Brexit will affect your company. If you’d like, we can go through this with you over a phone call. You can also download your own copy here:

How will Brexit affect the GDPR?

As part of the Data Protection Act 2018, the UK government adopted the GDPR into national rule. If you have already correctly implemented GDPR within your business, then nothing should change internally.

Where it could change, is the movement of data between the UK and EU. If the UK become a “favoured nation” to the EU, then there will be free movement of personal data without the need to implement additional safeguards.

Phew. That’s a lot of information. We’ll be updating this throughout the next few weeks to make sure this article is as relevant as it can be.

In the meantime, let us know if we can help you. We are happy to help with Brexit questions, accounts reviews and don’t forget about our 50% off your first month of bookkeeping deal that we are currently running!