28th Aug 2019
Incisive assessment of business elements that are expected to be disrupted by Brexit.
Britain leaves EU on the 31st of October. With no clear consensus on how amicable the separation will be or if there will indeed be a separation, businesses on both sides are in a lurch. Probably the only thing that looks certain is that if it goes through, Brexit will bring forth changes for businesses of every size and sector. It will have an impact on multiple elements that are essential for the wellbeing of a business such as workforce, intellectual property, data protection, taxation etc. How well prepared is your business to deal with Brexit? Have you had a thoughtful conversation about what could change for your organization?
Workforce is essential to a company’s success, especially in the services sector. Previously, EU citizens from elsewhere had a free pass at working in the UK and vice versa, which supported a free flow of talent/skills on both sides. Brexit is about to change that. Businesses should be contemplating questions such as – What percentage of our UK workforce comes from the EU27? Is the staff aware of the steps to taken to register as an EU citizen working in the UK?
EU nationals and their family members living in the UK for at least five years will be able to apply for UK Settled Status. Those living for less than five years, can apply for Pre-Settled status. The deadline for the applications is 31 Dec 2020.
If Britain leaves EU without striking a separation deal with the bloc (‘no-deal’), the tax treatment of interest and dividends paid between UK and EU firms could change dramatically. In case of no-deal, the UK is likely to adopt postponed accounting – the same accounting practice that is currently in place for intraEU trade. There will be no need to pay VAT at the border. The only change caused by Brexit on VAT will be on parcels valued greater than or equal to £135.
Intellectual Property and Data Protection
Intellectual property such as patents and trademarks are essential for many businesses to maintain their competitive edge. There is currently a high degree of uncertainty over whether trademarks registered in the EU would be applicable to the UK in the event of Brexit.
In case of no-deal, businesses will have to comply with new licensing requirements and adapt to changes effected by their competent regulatory authority. UK has not announced any immediate changes to its own data protection standards. However, the protocols governing transfers of data from establishments in the EU to establishments in the UK is expected to change on exit.
What are the key elements concerning your business. Do you have a pertinent Brexit checklist?
For a comprehensive checklist on Brexit, refer to the British Chambers of Commerce (Link)