Key Impacts of Brexit on Business

Guides| 5 min read
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The UK may not have left the EU on October 31, but it’s still important that you be prepared to face the consequences of a no-deal Brexit. This guide will walk you through the wide range of changes that are likely to take place and what you need to do to keep your business ready.

Effect on the supply chain

In the event of a no-deal Brexit, goods moving between the UK and the EU will need to undergo additional checks at the border, which will cause border delays. Additional customs formalities will affect the movement of goods between the roll-on roll-off ports in both the UK and the EU.

If you have suppliers outside the UK, they will need to be prepared to cope with new processes, customs duties, and regulations. If they are not prepared for the changes, it will hugely impact their business relationship with you.

What you need to do

Engage with your suppliers in other countries. Discuss the possible impact on your goods supply and what each of you will need to do to stay compliant with the new rules. Check with your agents, like freight forwarders and courier services, about alternate methods to transport goods. You may also need to find alternate routes to move your goods to avoid delays, or consider stockpiling certain goods until new procedures are in place. While you’re taking these steps to secure your supply of goods, you should also connect with your customers to inform them about potential impacts, such as delayed delivery.

Customs duties and processes

In the post-Brexit UK, you’ll need to understand the new customs duties and processes.

– The customs requirements for trade between the EU and the non-EU countries will now be applicable for trade between the UK and the EU.

– There will be no more free movement of goods.

– Goods moving between the UK and the EU will now be called imports and exports rather than acquisitions and dispatches. If you’re importing or exporting goods, you will need to complete detailed customs forms, including information such as commodity codes, countries of origin, and the value of your goods.

– Transitional simplified procedures can streamline certain imports until the new procedures are finalised

– If the UK does not agree to the new free trade agreement, then it will not be a part of the free trade agreements that the EU has with other countries. This means that custom duties will have to be paid when you are importing goods from countries that have EU free trade agreements.

What you need to do

– The rules of trading which are applicable for countries other than the EU will now be applicable for the EU as well.

– Refer to HMRC guidelines to prepare your business for importing and exporting.

– Check the requirements for transitional simplified procedures and decide if they will be applicable for your business.

– After Brexit, you will need an Economic Operator Registration and Identification (EORI) number from HMRC to continue trade.

– You may also need to analyse the tariff classification code for your commodities and update them if required.

– Use the Free UK Trade Tariff tool to see what customs tariffs will apply on imported goods.

Value added tax (VAT)

The UK government is intending not to make too many changes to the UK VAT procedures. After Brexit, the government is planning to introduce postponed import VAT accounting for businesses that have registered for UK VAT. EU VAT processes, such as triangulation and distance selling, will no longer be applicable in the UK. Learn more about VAT after a no-deal Brexit.

What you need to do

Analyse your supply chain and determine the extent to which VAT implications will affect your business. Ensure that you’ve properly documented any zero-rated exports. Check the latest VAT registration requirements, especially if you’re supplying to any EU member states.

People

EU citizens will need to apply for settled status to continue living in the post-Brexit UK. The UK government has come up with a scheme called the European Temporary Leave to Remain scheme that will allow EU/EEA nationals to live, work and stay in the UK for a span of 36 months. UK nationals who are settled in the EU must keep in mind that their rights will vary depending on which member state they reside in.

If you are travelling to the EU for work, then you may need a visa. However, UK and Irish nationals can continue to commute within the common travel area without additional identity documents.

What you need to do

– Decide whether to retain EU nationals: Once you have reviewed the UK government’s advice on settled status, check how many employees working for you are from the EU/EEA and whether they are all worth retaining. If you cannot provide for all of them under the new regulations, then you should determine which positions you can cut down on without jeopardizing your operations.

– Business travel for people between the UK and the EU: Analyse the existing patterns of your employees’ business trips and decide which ones are business critical. Pick an immigration service provider to determine all the requirements and relevant permissions relating to the member states where your employees will be traveling. Based on the collected information, come up with a suitable travel policy and implement it. Until Brexit happens, ensure that you stay updated with the ongoing announcements, and check the UK FCO travel advice and European Commission press releases.

Regulatory needs

– Businesses will have to comply with checks conducted by the EU bodies to access the EU market. Goods that have been checked by the UK bodies will still have to go through additional checks to determine if they are good enough to enter the EU market. If the goods are coming from the EU and have gone through all the required assessments, then they can be sold in the UK with no extra checks.

– For industries such as pharmaceuticals and financial services, the businesses must have UK authorisations to provide services in the UK, and EU authorisation to provide services in the EU.

– For conformity assessment, all goods sold in the EU have CE markings. In the post-Brexit UK, CE markings will be replaced by UKCA (UK Conformity Assessed) markings.

– Labelling will also have to be updated based on the regulations applicable for specific products. For goods like furniture and textiles, the regulations will be determined by individual member states.

What you need to do

Verify the regulations for your products in the UK, the EU, and the non-EU markets. Check whether you need any additional authorisations to continue your marketing activities in the EU. You may also need to decide whether you need representatives for selling your products in the EU. Review the labels on your products and decide whether you need to update the addresses on them to comply with UK and EU legislation.

Systems and data

As a business owner, you will need to know which of your vendors and customers are located in the UK and the EU so that you can comply with the new regulations. You will also need to make sure that your business software is compliant with new privacy requirements. For instance, when there is an exchange of personal information between the UK and the EU, businesses will have to follow GDPR until the UK’s data regime is certified as adequate by the European Commission or they enter a separate legal agreement.

What you need to do

Make sure that your customer and vendor contact lists show whether each contact is located in the UK or an EU member state. Determine whether you will need system updates or configuration changes to comply with new regulations once the UK leaves the EU. Track your data flow—check what personal data you are collecting, and whether you are sharing it across borders or with third-party service providers. Communicate with your third-party service providers to confirm their Brexit readiness.

Takeaway

A lack of business preparedness can have a spiralling effect on a company’s performance, but it’s easy to miss important steps when Brexit involves so much uncertainty. To keep your business safe, make sure you stay updated with the UK government’s announcements and changing regulations until the negotiations between the two entities are finally settled.

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