With the pandemic at the forefront of most businesses’ decision making during the past six months, the impending Brexit deadline may have slipped under your radar. However, with only two months to go until the end of the transition period, it’s important for your business to take steps now to prepare. While the Government continues to negotiate the UK’s future relationship with the EU, this guide on Brexit contingency planning for business will highlight some of the key areas that SMEs should be thinking about, whatever the outcome of the negotiations.
Brexit contingency planning for business
Following the UK’s exit from the EU on 31 January 2020, the country has been in a transition period, which will come to an end on 31 December 2020. During this period, there have been no immediate changes for businesses in the UK; EU law has continued to apply while the Government has been negotiating its future relationship with the EU. With only two months to go, an agreement has yet to be reached and the Government has confirmed that there will be no extension to the transition period. This means that businesses must have contingency plans in place to prepare for 1 January 2021, whatever the outcome of the Government’s negotiations.
Why does my business need to put Brexit contingency plans in place?
Whilst the UK’s future trade deal with the EU remains uncertain, there are certain aspects of a business’s operations that we know will be affected regardless of the position on 1 January 2021. For instance, we know that there will be significant changes to:
- the way in which businesses can import and export goods to the EU;
- how businesses can market and sell to customers in the EU;
- the flows of personal data in and out of the UK; and
- hiring staff from EU countries.
If your business doesn’t take steps to prepare, you may find that your operations are interrupted, that your business is no longer adequately protected or in the worst case scenario, that your business is no longer legally compliant.
What steps should SMEs take to prepare for Brexit?
The specific steps that your SME will need to take when Brexit contingency planning will depend on the nature of its operations, the industry it operates in, the protections that it relies on and the make-up of its workforce. For instance:
- If your business imports or exports to the EU… the process will change from 1 January 2021 and unless you’ve followed the correct steps, your operations may be interrupted. For example, as part of your business Brexit contingency planning, you’ll need to check the relevant customs and VAT requirements and liaise as appropriate with your EU counterparts.
- If you have contracted with EU businesses… Brexit may affect your commercial arrangements and you may need to take steps to ensure you can continue to fulfil your obligations and protect your rights.
- If your workforce includes EEA or Swiss nationals… to carry on living and working in the UK they must apply to the EU Settlement Scheme by 30 June 2021. If you’re thinking about recruiting EEA or Swiss nationals after 1 January 2021, you may need to apply for a sponsor licence to allow recruits to obtain a working visa.
- If your business has a .eu domain name… you’ll need to meet certain criteria to make sure you can keep it from 1 January 2021, or it will be withdrawn.
- If your business has customers in the EEA… there will be data protection implications if you’re processing their personal data. In particular, you may need to appoint an EU representative to act on your behalf in relation to EU compliance with the GDPR.
- If you share personal data with businesses in the EEA… if the EU hasn’t made an adequacy decision for the UK by 31 December 2020, you may need to put extra protections in place to make sure the data can continue to flow.
- If you rely on EU intellectual property protections… you may need to take steps to ensure that your protection continues from 1 January 2021.
This checklist provides general guidance applicable to most SMEs, but if you are concerned about the specific rules applying to your industry, you can use our Ask a Lawyer service.
The Content in this article is up to date as at the date of publishing. The information provided is intended only for information purposes, and is not for the purpose of providing legal advice. Sparqa Legal’s Terms of Use apply.
Before joining Sparqa Legal as a Senior Legal Editor in 2017, Frankie spent five years training and practising as a corporate disputes and investigations lawyer at leading international law firm Hogan Lovells. As legal insights lead, Frankie regularly contributes to Sparqa Legal’s blog, writing content across employment law, data protection, disputes and more.