What Does the New Brexit Rules and Regulations Mean for Businesses?
After the 2016 EU referendum in the UK, and the trade agreement between the two parties at the end of 2020, the effects of Brexit on British businesses have been profound. Officially, the free movement of people, goods and services between the UK and the EU came to end on 1st January 2020, with the final trade deal agreed upon in December 2020 and enforcements taking place from January 2021.
The Brexit deal has had the biggest impact on businesses that trade goods across the EU border. Although there was an agreement that there will be no taxes, and no limits on the number of goods that can be traded, England, Wales and Scotland (Great Britain) will now need to complete a lot of paperwork, to make customs declarations; similar to dealings with countries in the rest of the world.Some products will also now need certain licences and certificates, such as live animals and plants. This has made trading with the EU much trickier for businesses in Great Britain.
A different agreement was put in place for Northern Ireland, so as to keep a somewhat ‘invisible border’ with the Republic of Ireland. However, there are some new checks implemented on certain goods travelling from Northern Ireland to the UK, as well goods entering the country from the rest of the UK, with food products being checked against EU standards. Again, this has made it harder for some businesses who deal with goods that follow this particular journey across the borders.
Along with the physical transportation of goods between the UK and EU, businesses have also had to consider, and sometimes change, a lot of areas of their company, including:
- Customs, VAT payments and refund claims
- Product safety, conformity or eco-compliance, including packaging and labelling that references EU licensing
- Copyright, trademarks and patents
- Recognition of qualifications and relevant licences
- Environmental industrial standards
- Transfer of personal data between the EU and UK, and much more.
New rules surrounding immigration has also changed the way in which businesses employ their workers. With the new agreement in place from 1st January 2021, any non-UK citizen that has entered the UK to work, will now require a specific visa. Businesses will also have to look into becoming an approved employer sponsor.
In terms of financial markets, Amsterdam recently became Europe’s largest financial trading centre, as of January 2021, above that of London, due to the changes in financial rulesthat came into force as a result of Brexit.
Financial services make up a huge part of the UK economy, generating around £135 billion in business and earning from trading in stocks and shares. However, this crucial part was left out of the Brexit trade deal, and London’s financial centre has been cut off from EU markets since January.
Last month, Amsterdam exchanges saw an estimated €9.2(£8.1) billion worth of online stock trading, whereas London exchanges fell short with €8.6 (£7.55) billion worth of shares traded in the same period. According to a statement from officials at Number 10, this was caused by the European Union regulator:
“Despite the fact that we’ve supplied all of the necessary paperwork and are one of the world’s most preeminent financial centres, with a strong regulatory system, the EU still hasn’t granted us full equivalence.
“This has meant that a number of EU shares that were previously traded on UK venues have moved to the EU venues on the advice of the European regulator.”
It’s not just the amount of trading that has been affected by the Brexit deal – or lack of in the case of financial services – but also the jobs involved in the industry. Bank of England chief, Andrew Bailey, reported that a staggering 7,000 financial jobs have been relocated from the capital to rival centres in Europe – although this is lower than the prediction of 50,000 job locations.
So, it’s clear to see that a business in a post-Brexit world has a lot to consider and contend with and that there are possible difficulties and uncertainties yet to come. However, with some research and the use of mechanisms now in place, there’s plenty that can help business ease into this new way of trading.
