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Business Brexit Checklist

The UK’s impending departure from the European Union will bring change for businesses of every size and sector.

While some companies are already planning for the challenges and opportunities ahead, Chambers of Commerce believe that all firms – not just those directly and immediately affected – should be undertaking a Brexit 'health check', and a broader test of existing business plans.

Time spent thinking through the changes that Brexit may bring to your firm could yield real dividends in future. While the final settlement between the UK and the European Union is still to be negotiated, there are steps that businesses of all sizes can take now to start planning ahead.

The checklist below has been prepared in response BCC survey findings, which suggest that a significant number of firms are either watching and waiting – or taking no action at all. We hope you find it useful as a basis for business planning at both operational and Board level. Below are the key areas in which you should consider possible changes, and resources which can help you plan.

Your firm doesn’t have to navigate Brexit alone. Contact your local accredited Chamber of Commerce to find out how your Chamber can support you.

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Workforce and future skills needs

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There will be changes to how EU nationals register in the UK. EU nationals and their family members who have lived in the UK for at least five years by 31 December 2020 can apply for UK Settled Status. Those who have been here for less than 5 years, can apply for Pre-Settled status until they meet the full criteria

If you employ non-British or non-Irish workers from elsewhere in the EU, the UK Government has issued guidance on their present and future immigration status.

Your business should consider

What percentage of your UK workforce is from the EU27?

Do your staff know the next steps to take to register as an EU citizen working in the UK?

What can you do to help retain skills and labour?

Resources and information

The Home Office has published an Employer Toolkit which covers the key details of the EU Settlement Scheme, information and materials with which to support affected staff and their families:
https://www.gov.uk/guidance/status-of-eu-nationals-in-the-uk-what-you-need-to-know

What can you do to support staff applying for the EU Settlement Scheme? Signpost them to further information and regular email updates from the Home Office:
https://gov.smartwebportal.co.uk/homeoffice/public/webform.asp?id=67&id2=627DF7

The UK’s EU Settlement Scheme will be open between March 2019 and 30 June 2021 and your staff can sign up for email updates:
https://gov.smartwebportal.co.uk/homeoffice/public/webform.asp?id=67&id2=627DF7


Future staffing requirements

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Further ahead, there will be changes to the UK’s immigration regime. The British Chambers of Commerce is advising the Home Office on this, using feedback from across the UK Chamber Network.

Your business should consider

What will be your skills and labour needs over the next few years?

Will you need to hire someone from outside the UK?

What steps will you need to take to hire them?

Could different arrangements (remote working) be feasible for your business?

Consider how your future travel to the EU for the servicing of contracts or other purposes may be affected.

Resources and information

Check the non-EEA visa requirements for the country you are visiting: www.gov.uk/foreign-travel-advice

Non-EEA Business visitors to the UK currently require a Standard Visa which involves fees and processing time: www.gov.uk/standard-visitor-visa

If you transfer staff between businesses in your group, or run a graduate training scheme, restrictions may apply. Current non-EEA Intra Company Transfers fall under the UK’s Tier 2 sponsorship arrangements, with regulatory and record keeping requirements for employers: www.gov.uk/uk-visa-sponsorship-employers

UK/EU customs checks

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As a ‘third country’, UK exporters to the EU after Brexit may in future be required to make customs declarations.

Your business should consider

What customs procedures do you comply with for trade with non-EU markets?

Are you ready, if the need arises, to apply these to imports from or exports to the EU?

Resources and information

HMRC has published an information pack to help businesses plan ahead plan for the contingency of a ‘no deal’ EU Exit. The pack includes guidance on how Customs and Excise could be affected and actions to take now. Information is split by topic and audience, and flowcharts. Future editions of this pack will include information from other government departments responsible for policies that will impact trade at the border: https://www.gov.uk/government/publications/partnership-pack-preparing-for-a-no-deal-eu-exit


To register for the HMRC’s EU Exit update service for future guidance and updates: on GOV.UK, search for ‘HMRC videos, webinars and email alerts’, click to register to get business help and education emails, enter your email and select ‘EU Exit’.

See the UK Government's technical notice on trading with the EU if there's no Brexit withdrawal agreement: http://www.gov.uk/government/publications/trading-with-the-eu-if-theres-no-brexit-deal

See the UK Government's technical notice on exporting controlled goods if there's no Brexit withdrawal agreement: http://www.gov.uk/government/publications/exporting-controlled-goods-if-theres-no-brexit-deal

Potential delays at UK/EU border

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With potential customs checks between the UK and the EU, there may be delays at the border.

Your business should consider

The potential of customs checks to cause delays at the border will depend on how new policies are implemented in practice: customs checks are typically risk-based rather than universal. As yet there no details on how enforcement might be executed in practice.

How resilient is your supply chain to potential border delays?

Do any contracts you have include penalties for late delivery? You may want to discuss with your logistics provider whether you would require new arrangements.

Do you need to increase your inventory and/or buy additional storage space?

Tariffs on UK-EU trade

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The British Chambers of Commerce has been advocating for zero tariffs on trade between the UK and the EU after Brexit.

However, businesses should consider the potential impact of a situation where there are tariffs between the UK and the EU – based on the EU Most Favoured Nation (MFN) tariff (which applies to countries that do not have a special agreement with the EU).

Your business should consider

Do you know the HS codes (international classification system) for your products? Do you know the EU MFN tariff that is applicable for your product?

If the UK and the EU do not reach an agreement that removes all tariffs, what would the impact of the MFN tariff be on your cost base?

Resources and information

HMRC has published an information pack to help businesses plan ahead plan for the contingency of a ‘no deal’ EU Exit. The pack includes guidance on how Customs and Excise could be affected and actions to take now. Information is split by topic and audience, and flowcharts. Future editions of this pack will include information from other government departments responsible for policies that will impact trade at the border. The links in this Checklist will be updated once this these updates are published: https://www.gov.uk/government/publications/partnership-pack-preparing-for-a-no-deal-eu-exit

UK Government technical notice on trading with the EU if there's no Brexit withdrawal agreement: http://www.gov.uk/government/publications/trading-with-the-eu-if-theres-no-brexit-deal

UK Government technical notice on classifying your goods in the UK Trade Tariff if there's no Brexit withdrawal agreement: http://www.gov.uk/government/publications/classifying-your-goods-in-the-uk-trade-tariff-if-theres-no-brexit-deal

UK Government technical notice on trade remedies if there's no Brexit withdrawal agreement: http://www.gov.uk/government/publications/trade-remedies-if-theres-no-brexit-deal

Rules of Origin in UK-EU trade

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Even if the UK has a zero-tariff trade agreement with the EU, companies will need to prove that their product is of UK origin to benefit from this (usually, this means that 50-55% of the product has to be locally sourced). The exact terms of these rules between the UK and the EU are yet to be negotiated.

Your business should consider

If you are a supplier, has your customer asked you to provide proof of where you source your content? Would you be able to provide it if asked?

If you buy your components from local suppliers, have you thought about conducting an audit of where they source their materials?

Resources and information

UK Government technical notices on EU FTAs if there’s no Brexit withdrawal agreement: http://www.gov.uk/government/publications/existing-free-trade-agreements-if-theres-no-brexit-deal


EU trade agreements with third countries

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The UK Government has indicated its intention to secure the benefits of existing EU trade agreements with other countries. However, businesses may need to consider a scenario where the terms were to change and preferential trade terms are no longer available.

Your business should consider

Do you import or export using lower duty rates (‘preferences’) provided by the EU’s existing trade agreements?

How might changes to, or the ending of, these preferential rates impact you?

If you are supplying to a partner in the EU who is exporting to a third country with which there is an agreement, please be aware that EU firms have been encouraged to look for EU-only (not UK) content to be able to benefit from lower tariff rates. Consider if there is any way for you to mitigate this.

Customs facilitations, reliefs etc

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There are a number of duty relief schemes available to UK businesses.

Your business should consider

It may be worthwhile for your business to consider applying for these.

There is also a trusted trader scheme – Authorised Economic Operator (AEO) – that may be relevant to you if your supply chain also takes part in it.

Resources and information

Do you plan to apply for additional customs relief or trusted trader schemes from HMRC? Read more about them at www.gov.uk/duty-relief-for-imports-and-exports & http://www.gov.uk/guidance/authorised-economic-operator-certification


Customs/export training

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Your business should consider

Do you have a member of staff knowledgeable in customs and export?

Would it be valuable to train a member of staff in this area?

Resources and information

Chambers of Commerce are able to provide both ongoing support and relevant training. Find your local Chamber here.

Incoterms

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Your business should consider

Are you familiar with INCOTERMS?

Knowing the International Terms and Conditions of Service will help you set the right contract terms to reflect potential changes of status (becoming an exporter/importer) once the UK leaves the EU.

Import VAT

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With the UK’s exit from the EU, in the event of no deal, the UK will introduce postponed accounting – the same system that is currently in place for intra-EU trade. This means that there will be no need to pay VAT at the border; the only change caused by Brexit on VAT will be on parcels valued up to and including £135.

Resources and information

HMRC has published an information pack to help businesses plan ahead for the contingency of a ‘no deal’ EU Exit.

The pack includes guidance on how VAT could be affected and actions to take now. Information is split by topic and audience, and flowcharts: https://www.gov.uk/government/publications/partnership-pack-preparing-for-a-no-deal-eu-exit

Future editions of this pack will include information from other government departments responsible for policies that will impact trade at the border.

UK Government technical notice on VAT for businesses if there's no Brexit withdrawal agreement: http://www.gov.uk/government/publications/vat-for-businesses-if-theres-no-brexit-deal

VAT registration in the EU

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If you trade in goods and decide to hold stock in an EU country for supply to your EU customers, you will need to register for VAT in that country. Dependant on the country where your stock is, you may also be required to appoint a Fiscal Representative who is jointly liable for any VAT you may owe.

Your business should consider

Do you know which country would be best suited to support your supply chain to EU customers/suppliers?

Do you have access to bank guarantees required by Fiscal Representatives?

Does your business model allow enough margin to absorb the increased costs these new processes will bring?

Resources and information

HMRC has published an information pack to help businesses plan ahead plan for the contingency of a ‘no deal’ EU Exit.

The pack includes guidance on how VAT could be affected and actions to take now. Information is split by topic and audience, and flowcharts: https://www.gov.uk/government/publications/partnership-pack-preparing-for-a-no-deal-eu-exit

Future editions of this pack will include information from other government departments responsible for policies that will impact trade at the border.

UK Government technical notice on VAT for businesses if there's no Brexit withdrawal agreement: http://www.gov.uk/government/publications/vat-for-businesses-if-theres-no-brexit-deal

Currency risk

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The months following the EU referendum saw significant currency volatility – this may occur in future.

Your business should consider

What currency are you being paid in?

Have you considered the possibility of further currency movements, and how this might affect existing and future contracts?

Resources and information

Your local Chamber can give you recommendations for mitigating these risks. Find your local Chamber here.

Intellectual Property

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It is unclear whether trademarks registered in the EU would be applicable to the UK in the future.

Your business should consider

Do you own any Intellectual Property rights?

Have you contacted trademark bodies / solicitors / IP advisors on how to protect your intellectual property after March 2019?

Resources and information

UK Government technical notices on intellectual property if there’s no Brexit withdrawal agreement have been published on these topics:

Copyright if there’s no Brexit deal: http://www.gov.uk/government/publications/copyright-if-theres-no-brexit-deal

Exhaustion of intellectual property rights if there’s no Brexit deal: http://www.gov.uk/government/publications/exhaustion-of-intellectual-property-rights-if-theres-no-brexit-deal

Patents if there’s no Brexit deal: http://www.gov.uk/government/publications/patents-if-theres-no-brexit-deal

Trade marks and designs if there’s no Brexit deal: http://www.gov.uk/government/publications/trade-marks-and-designs-if-theres-no-brexit-deal

Contracts review

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Some of the terms in existing contracts may no longer be relevant post Brexit, or may raise legal or practical questions in future.

Your business should consider

Do your contracts refer to any terms that should be reviewed in light of the UK leaving the EU?

Do they make references to the UK being a member state/to the EU?

Does your contract rely on EU regulation applicable to contractual arrangements?

Resources and information

UK Government technical notice on civil legal cases if there’s no Brexit withdrawal agreement: http://www.gov.uk/government/publications/handling-civil-legal-cases-that-involve-eu-countries-if-theres-no-brexit-deal

EU regulatory regime and data protection

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Across a number of sectors and regulatory areas, the UK Government has expressed its intention to maintain status quo arrangements for obtaining licences to trade with the EU, and for domestic compliance and enforcement. In the event that a Brexit withdrawal deal is agreed, it remains unclear whether UK regulators would be able to provide licences for the EU market after the transition period; it is also unclear if notified bodies in the UK will be able to conduct conformity assessment checks destined for the EU market. In the event of a ‘no deal Brexit’, firms may need to comply with new licence requirements and changes to their competent regulatory authority.

Your business should consider

Which regulatory agencies do you work with? What steps might you need to take to comply with separate UK and EU regulators in the future?

Resources and information

For Data Protection:

The Information Commissioner’s Office (ICO) has published a checklist of six steps that businesses can take now to start preparing for data protection compliance if the UK leaves the EU on 29 March 2019 without a deal.

https://ico.org.uk/media/for-organisations/documents/2553958/leaving-the-eu-six-steps-to-take.pdf

More detailed information on this can be found here: https://ico.org.uk/for-organisations/data-protection-and-brexit/data-protection-if-there-s-no-brexit-deal/

UK Government Brexit technical notices on regulation have been published for these sectors:

Transport
Farming and fishing
Energy
Medicines and medical equipment
Veterinary medicines
Satellites and space
Seafaring

And for these cross-cutting regulatory issues:

Meeting business regulations
Labelling products and making them safe
Personal data and consumer rights
Protecting the environment

You can find these technical notices here.

Competition policy and state aid

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After leaving the EU the role of policing and ensuring fair competition in UK markets (including state aid) will fully transfer to British regulators and agencies. This could result in differences to the current approach – for instance on approvals for mergers and acquisitions.

Resources and information

The Competition and Markets Authority (CMA) has published a notice on its role after Brexit http://www.gov.uk/government/collections/cmas-role-after-brexit

If there is no Brexit withdrawal agreement before March 2019, the government has developed a ‘no deal’ competition Statutory Instrument (SI):

Mergers: if the European Commission has issued a decision on or before 29 March 2019 (unless the decision is annulled, in full or in part, following an appeal), the UK has no jurisdiction.

State aid: the government is expected to pass secondary legislation which will transpose EU state aid rules into UK law and provide for the CMA to take on its new state aid role, following which they will publish further details on how this function will operate.

Antitrust: After the UK’s exit from the EU, the CMA will no longer have jurisdiction to apply anti-competitive agreements including cartels or on abuse of dominance.