Brexit: One year later
10 March 2022
A little bit more than a year has passed since the UK left the EU, a year that took many unpredictable turns. But how far have we come since the official breakup? Where do we currently stand and where are we heading? Which are the key issues, the ones that seem to be most difficult to settle? The Link spoke to law firms from the SCC membership about the most important changes made in key areas.
Founder & Managing Director,
Merryhill Accountancy Services Ltd
Brexit: storm in the North Sea or storm in a teacup?
Reflecting on the accounting and business landscape one year after Brexit, I have two dominant thoughts. Firstly, Brexit appears to be having an asymmetric impact on UK businesses and secondly, Covid is having such a significant impact on the business environment that it is hard to see the full impact (or not) of post Brexit changes.
The majority of our client base operate within software, technology and professional services with little or no movement of goods. For these clients, the loss of free movement of goods is mostly irrelevant; the loss of free movement of capital has had little impact other than generating additional bank charges for cross border payments – annoying, but unlikely to be business critical; and the loss of free movement of people is difficult to quantify given the relatively short timescale and restrictions on travel resulting from Covid.
For businesses who are involved in the movement of goods, there is no question that Brexit has created plenty of pain. Many transactions remain tariff free, but the non-tariff barriers can be significant. 2021 has delivered a rude introduction to incoterms, rules of origin, the complexities of import/export paperwork and the challenges of import VAT admin. This is especially true for small businesses who have limited resources to re-engineer their processes and expand their knowledge as well as businesses selling B2C.
Looking forward into 2022, the cross-border trade in goods is unlikely to get any easier – indeed a number of simplifications and easements have ended or are due to be phased out. Despite this, I am already starting to see businesses adapt to the new requirements in a variety of ways.
I fully anticipate a similar pattern in relation to the free movement of people. Once the COVID restrictions ease, businesses will start to think about internationally mobile employees and international hiring and find a way to adapt to the new points based system of immigration.
I remain convinced that the business communities in the both the UK and Sweden are agile, adaptable and awesome!
Global Talent Visa Lead,
Riding the Talent Wave in 2022
Whilst 2021 hasn't been the smooth ride we'd all hoped for after 2020 – indeed, it's been far from it – it has presented significant opportunities for organisations, especially tech organisations both new and established in the UK.
Though undoubtedly troubled by the ongoing effects of the pandemic, Brexit and 'the great resignation', the UK has seen over USD 21bn in venture investment, substantially beating 2020's new record of USD 15bn by the end of August. This has been a remarkable year for UK startups and scaleups and with over USD 8bn in 'dry powder' still remaining, it looks like 2022 has a solid foundation for yet another record breaking year.
Still, with the three key challenges around employee health, government policy and talent shortages, going head-to-head with the best investment landscape the UK has seen in a while, there is undoubtedly some white water to navigate. However, within this, there are significant opportunities for growth and prosperity, as long as organisations are prepared. This really starts with understanding all of the ways you can relocate talent to the UK; including the different types of visas available.
When it comes to UK hires, there are a number of other areas to consider. Firstly, the UK recruitment landscape is fierce. In order to combat this, take time to clearly define both the job profile and the personal profile of who you want to do it, as is the case in many places, the talent pool are more often than not looking for more than a paycheque and so purpose and personality are going to be exceptionally important. When it comes to retaining talent, this is becoming more and more vital for organisations looking to grow in the UK. The UK presents a significant opportunity for well-funded business growth in 2022. These opportunities are open to everybody, but as with anything, the key to success is absolutely in the preparation.
Data Protection, E-Privacy and Cyber Security Partner,
2021 in Data Protection
UK businesses breathed a sigh of relief when the EU announced it had granted “adequacy” status to the UK to receive data transfers from the EU. This is important news for any UK businesses that receive personal data from the EU. The EU’s decision means that personal data may continue to flow freely between the EU and the UK.
Whilst this is undoubtedly good news for businesses that transfer data from the EU to the UK, it comes with a caveat. The adequacy decision includes a “sunset clause” that allows the EU to review the adequacy decision in four years’ time.
The UK then proposed reforms to its data protection law for a post-Brexit world. The reforms acknowledge the importance of innovation and the global digital economy.
It remains to be seen whether these reforms are adopted, and whether they will affect the UK’s adequacy status.
Horizon Scan for 2022
Expect the UK data regulator to strike a new balance between individuals’ data rights on the one hand and fostering innovation on the other.
The EU has introduced new standard contractual clauses (“SCCs”) that will replace the current versions. Many businesses rely on the current-version SCCs to transfer personal data to third countries. The deadline for businesses to replace their “old” SCCs with the “new” versions ends in December 2022. Businesses transferring personal data to third countries under the current version SCCs will have to replace their arrangements with the new SCCs during 2022.
Need more help?
As of 1 January 2021, the UK and the EU are trading in accordance with newly agreed trading terms, and the United Kingdom has left the EU’s single market. Businesses looking to trade between the two regions must now digest the agreement and consider what it means for their operations and cross-border trading.
For information on specific challenges and information for your respective sector or industry, you may find specific trade bodies a useful resource, as many of them provide Brexit guidance and advice tailored to your business’ specific needs. The UK Government’s “Keep Business Moving” portal will continually be updated with useful information as the negotiations progress and new information emerges.
Visit the SCC’s Brexit portal on scc.org.uk, for information and links to resources.
Contact the SCC secretariat at firstname.lastname@example.org or 02072248001 if you have any questions regarding Brexit.