How will the Brexit deal affect small businesses?

On 24th December 2020, an agreement was reached between the UK and the EU setting out the UK’s future relationship with the EU. This is the first free trade agreement the EU has ever reached based on zero tariffs and zero quotas.

Now that the transition period is over, new rules for business with Europe are here. The Government is committed to supporting everyone across the UK to adapt to these new rules. Businesses can find out which rules affect them and get personalised and prioritised actions for their business by using the Brexit checker tool at gov.uk/transition.

Let’s take a look at the deal in greater detail to see what’s changing and how it will affect small businesses now that the transition period is over.

Business travel

Business travellers may need to apply for a visa, work permit or other documentation before travelling to the EU/EEA/Switzerland. Business travel includes activities such as travelling for meetings and conferences, providing services (even with a charity), and touring art or music. Find
out more here. If you plan to stay longer than 90 days in a 180 day period or are carrying out activities or providing services not covered by a country’s visa-waiver rules, you may need a visa, work permit or other documentation. You may also need a visa or work permit if you are:

• transferring from the UK branch of a company to a branch in a different country (‘intracorporate transfer’), even 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

Entry requirements vary and you should visit the specific country guides and the EU Immigration Portal to find out entry requirements for the country/countries you are travelling to and how to apply for a visa and/or work permit, if needed.

If you are travelling for less than 90 days in a 180-day period, you will not need a visa if you are: going to a business meeting, attending a conference, attending cultural or sports events or exchanges travelling for journalistic or media purposes.

Other things you may need to do before you travel include:

Check COVID-19 restrictions

Check the validity of your passport – you may need to renew it even if it is still in date. Use the passport checker tool.

Check where your Global or European Health Insurance Card is valid and get travel insurance that covers your needs.

Check you have the right driving documents -UK motorists are required to obtain a Green Card from their insurer and display a GB sticker on their vehicle

Check roaming policies with your mobile provider before travelling.

For more information on travel to Europe, click here.

Professional qualifications

Now a deal has been agreed, the recognition of UK professional qualifications in the EU is due to change. Make sure your EU-qualified staff can continue to provider professional services to clients in the UK by ensuring their professional qualification(s) are recognised by the relevant regulatory or professional body in the UK. Find out more here.

To continue to practise or service clients in the EU, you will need to ensure your UK qualifications are recognised by the relevant EU regulatory or professional body. You will need to do this even if you are providing short-term or occasional professional services. Where a qualification has already been recognised by the relevant regulator in the EEA or Switzerland, you should make sure you understand the terms of the recognition decision by checking with that regulator. Find out more here.

Selling services in the EU

If an individual has a UK business or is a UK citizen, there may be changes to their ability to own, manage or direct a company registered in the EU. If they provide services to the EU, they will need to check the national regulations of the country they are doing business in to understand how best to operate, including regulations regarding corporate structure, ownership, tax, data sharing and registration requirements. For more information look here.

Businesses that import and export goods

Check the new rules on importing and exporting goods between the EU and Great Britain. Different rules apply in Northern Ireland. To continue trading with the EU, you will need to follow new rules for importing and exporting,
including changes to customs processes and licensing. Before you attempt to move your goods, you will need to get ready to make customs declarations – these are now needed for all exports from the UK and if you’re importing controlled goods. If you import goods that are not controlled, you may be able to delay making your declarations for up to six months. There is a step-by-step guide to help with exports and a step-by-step guide to help with imports.

Get expert help – it’s recommended you get a contract in place as soon as you can with a customs intermediary like a freight forwarder or customs broker. This is especially important if you’re exporting or importing controlled goods, as you will not be able to delay your declarations.
Make sure that you know how to classify your goods and how you will evidence their origin, your customs intermediary will also be able to help you ensure your goods are classified correctly. If you do not classify your goods correctly or if you do not accurately record the origin of the goods in your customs declaration, you may be charged the wrong amount of tax or duty. If you choose not to hire an intermediary, you will need to do this yourself.

Personal data

The EU-UK Trade and Cooperation Agreement contains a bridging mechanism that allows the continued free flow of personal data from the EU/EEA to the UK after the transition period until adequacy decisions come into effect, for up to 6 months. Be prepared on data protection and data transfers. If your business or organisation receives personal data from the EU/EEA, you must check the current guidance on lawfully continuing to receive personal data such as names, addresses or payroll details from organisations in the EU or EEA. More information can be found here.

As a sensible precaution, during the bridging mechanism, it is recommended that you work with EU/EEA organisations who transfer personal data to you to put in place alternative transfer mechanisms to safeguard against any interruption to the free flow of EU to UK personal data.

Workers’ rights and standards

Workers’ rights and standards don’t seem to be changing as a result of the deal. 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.

Employing staff from the EU

The way you hire from the EU has changed. Freedom of movement between the EU and UK had ended and the UK has introduced a new points-based immigration system. If you want to hire anyone from outside the UK’s resident labour market, you must be a Home Office licenced sponsor. This includes recruiting people from the EU.

Anyone coming to the UK will need a job offer from a licenced sponsor in advance and will need to meet certain skills and salary criteria. The new system doesn’t apply when hiring Irish citizens, or EU citizens eligible to apply to the EU Settlement Scheme. Find out more at gov.uk/hiringfromtheEU.

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.