Since what was first known as Brexit back in 2015, discussions have been had over how Brexit will affect UK businesses. The departure of the UK from the European Union became official at the start of 2021 after a trade deal was agreed in December 2020.
A little under 52% of the UK population voted for the UK to leave the EU. Many looked forward to the prospect of an independent nation, with many left unaware of what was in store.
Now Brexit is no longer a discussion. It’s a reality for all UK businesses, and the impact is in the here and now. The focus is now on “how will Brexit affect my business”? The truth is, Brexit will affect all businesses, and it’s essential to understand the effects.
Which Industries Are Affected By Brexit?
Every single industry is affected by Brexit. There are potential impacts in all areas including economic and manpower. Naturally, some businesses will be impacted more than others, like financial services. However, those that trade internationally will be the greatest affected.
Businesses that rely on European suppliers or customers will be affected by the change in the law. As will international trade due to the loss of the EU’s free trade arrangements.
Key Brexit Dates
Now that the UK has formally left the EU, there are some important future dates to be aware of. At the moment these dates are guidelines and are not necessarily set in stone, but it’s essential to be aware of them.
- 28th February 2021 – European Parliament aims to have consented to the UK-EU TCA
- 31st March 2021 – UK & EU aim to agree on a Memorandum of Understanding; this establishes a framework for regulatory cooperation on financial services
- 1st April 2021 – End of grade period for UK supermarkets in relation to food safety (moving agri-food goods between Great Britain & Northern Ireland)
- 30th June 2021 – End of temporary bridging period for the free flow of data from the UK to the EU
- 1st July 2021 – End of six-month grace period for Great Britain-Northern Ireland trade on chilled meat products
- 31st December 2021 – End of 12-month adaptation period for Great Britain businesses to implement new EU regulation in relation to the flow of medicines to Northern Ireland
What Are The Main Issues For Businesses?
The way Brexit affects businesses will be different. Each company will face challenges due to the UK leaving the EU. However, there are some main issues that all businesses will need to address.
- Supply – There’s a risk of increased costs and delays to supply chains. Many businesses will need to adapt what they offer to other countries, including pricing and target markets.
- Customs – Importers, and exporters will be affected by potential customs implications. Businesses will need to consider what regulations are in place for the country they are trading with. Traders now require a GB EORI number to be able to move goods to and from the UK
- Travel – Freedom to travel for passengers and cargo has been confirmed. However, new rules are now in place for traveling meaning UK citizens will not be able to travel between EU countries. Once a persons’ EU passport has expired, a UK-certified passport must be applied for. This could affect businesses by changing the feasibility of having a physical presence within the EU
- Workforce – Migrated workforces and skilled worker shortages
- Regulation – The UK mainly works to EU standards, so many standards are likely to be the same
- Economy – Every sector is likely to experience the effects of Brexit. Payment of VAT was unnecessary prior to Brexit, however, VAT will now be payable on goods entering the UK
- Intellectual Property – Changes to IP law within the UK e.g. patents, trademarks, copyright
Legal Implications of Brexit
As the UK parts ways from the EU, the regulatory framework will need to be reworked, and that poses a challenge in itself. Brexit will affect businesses straight away due to the change in the law. EU law will need to be transformed into UK law, causing businesses to try and navigate challenges like the way they operate, employment contracts, and so on.
How Brexit Has Already Affected Some Businesses
While we are still only a couple of months into the UK leaving the EU, the effects of Brexit on businesses have already been seen. Let’s take a look at some of the effects in action.
UK Websites Losing .EU Domain Access
Over 81,000 .eu website domains have been suspended. UK residents are no longer permitted to use the domain. The website Leave.eu had to change ownership to a non-UK resident in order to stay in business.
Food Supply In Northern Ireland
The Good Friday Agreement banned the introduction of border checks between Northern Ireland and the Republic of Ireland. Northern Ireland remains part of the single market, meaning that goods traded between Great Britain and Northern Ireland must undergo custom checks.
In Northern Ireland, supermarkets saw empty shelves as food supplies were slowed down. It’s been dumbed down as “teething issues“, but many supermarket chains believe the situation will likely get worse.
Universities across the UK tend to attract a lot of EU students. It’s estimated that in 2021, Universities will attract 35,000 fewer EU students. This will result in a loss of £62.5 million per year in tuition fees.
A Change In Life
Brexit has undoubtedly turned many businesses upside down. However, there is no looking back, with the only way being forward and a time to reflect and rebuild.
For all businesses, complying with rules and regulations is the easiest way to move forward. Companies will need to maintain a duty of care and be kept in the know, adapting to change in order to promote better business in the UK.
Of course, many financial and legal issues will arise. However, it’s important for businesses to understand the changes and seek help if necessary.