Small business loans

Take your next step with fast, affordable business finance.

Apply Now

Funding Circle

Resources >   Business News  >  Brexit News  >  

How will the Brexit deal affect small businesses?

Brexit News

How will the Brexit deal affect small businesses?

Updated: 3 February 2021

On the 24th December 2020, after four years of intense negotiations, the UK finally reached a Brexit deal with the EU, just in time for the end of the transition period on 31st December. Now that everything’s official, it’s time to take a look at the deal in greater detail, to see what’s changing, what’ll be staying the same and how it will affect small businesses now that the transition period is over.

What’s changing

Business travel

In the new Brexit deal, travelling for business purposes is set to change quite drastically. The end of freedom of movement eliminates unlimited business trips to the EU. Instead you can take short term business trips totaling 90 days without a visa or work permit in any 180 day period. Permitted activities will include:

  • Attending meetings or conferences
  • Engaging in consultation with business associates
  • Research and design
  • Marketing research
  • Receiving training
  • Attending trade fairs and exhibitions
  • Sales trips (although direct sales to the general public are not permitted)
  • Purchasing
  • After-sales service
  • Commercial transactions
  • Tourism
  • Translation and interpretation

Beyond the accepted time period stated above, you may require a visa, work permit or other documentation. You also may require these if you’ll be engaging in any of the following business activities as part of your visit:

  • Transferring from the UK branch of a company to a branch in a different country (‘intra-corporate transfer’), even if it’s only for a short period of time
  • Carrying out contracts to provide a service to a client in another country in which your employer has no presence
  • Providing services in another country as a self-employed person

Professional qualifications

Now a deal has been agreed, the recognition of UK professional qualifications in the EU is due to change. If you want to work in a profession that’s regulated in the European Economic Area (EEA) or Switzerland, your UK professional qualifications will need to be recognised by the appropriate regulator for your profession in each country you operate in. You’ll be required to do this whether you’re providing temporary or occasional professional services. You can check the European Commission’s Regulated Professions Database (REGPROF) to see if your profession is regulated.

Selling services in the EU

If you sell services in the EU, this is also set to change due to the new deal. As this is not a permitted activity under the new business travel regulations, you’re likely to require work permits and other requirements from the country you intend to sell services in. You can find a more detailed breakdown of what you’ll need to do to comply under the new deal here.

Customs checks

As Britain has now left the single market and customs union, the new deal also brings into force further customs checks and paperwork. Exact requirements will depend on the type of goods involved, where they cross the border and who’s transporting them. Signing up to the Common Transit Convention (CTC) could help to expedite the process, as it enables you to complete some customs processes away from the border, and customs declarations and duties under the CTC are not required at each border crossing. Find out more about whether you can use the CTC here

Fishing rights

As many will know, fishing has been an important feature in the Brexit deal, and now there are set to be big changes. The value of fish that will be caught by the EU in the UK waters is set to be cut by 25%. This cut will be phased in over a period of five and a half years, and after its completion, the UK will have full control over access to its waters. Though we’re not sure on how this will play out in the future, if the UK chooses to exclude EU fishing boats after this period, they can be compensated for their losses — this might either come through tariffs on UK fishing products (or other goods) exported to the EU, or through preventing UK boats from fishing in EU waters.

What’s not changing

Tariffs on goods

One of the things that won’t be changing through the new Brexit deal is that there won’t be tariffs imposed on qualifying goods. In order to take advantage of this, goods that are being exported from the UK to the EU, and vice versa, will need to comply with the ‘rules of origin’ requirement, which allows authorities to classify where exports have come from. You can find more information on the rules of origin and how it applies to businesses here.

In addition, certain goods will not be able to qualify for zero tariffs. Some examples include cane sugar that is imported from the Carribean and refined in the UK, as well as basmati rice imported from India and milled in the UK. It’s also worth noting that any meat product must contain only meat from animals born and raised in the UK or the EU.

Sharing of personal data

The continued free trade of personal data from the EU to the UK will remain for six months after the end of the transition period (31st December 2020), until adequacy decisions are able to come into effect.

The General Data Protection Regulation (GDPR) will be retained in UK law, so your business will still need to conform to this standard when dealing with personal data.

EU funding schemes

While the UK won’t continue to participate in some of the EU’s funding schemes now a deal is in place, the following programmes have been agreed until 2027:

  • Horizon Europe — the EU’s research and innovation programme
  • Eurotom Research and Training programme
  • International Thermonuclear Experimental Reactor — the fusion test facility that’s under construction in France
  • Copernicus — the EU satellite system for monitoring the Earth

You can find the latest guidance on EU funding on the Government’s website here.

Workers’ rights and standards

Another thing that doesn’t seem to be changing as a result of the deal is workers’ rights and standards. Although there isn’t a lot of information available about this, a level playing field measure has been introduced to commit both the UK and EU to uphold common standards on these rights. It’s worth noting that while the UK is not bound to have to have identical standards in place because it will no longer have to follow EU law, any new regulations will have to be seen to protect fair competition between the UK and EU.

All information is correct at time of publishing. While we want to help as much as we can, the information and documents found here are provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.

Great Review: