Business Brexit Checklist

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

This checklist has been created to help businesses consider the changes that Brexit may bring to your firm, and to help business planning at both operational and Board levels.

The UK’s impending departure from the European Union will bring change for businesses of every size and sector. Have you / your management team devoted time to considering the potential consequences of Brexit – direct or indirect – on your businesses?

If you have one, have you consulted with your Board of Directors on Brexit – or scheduled an opportunity to do so? Have you mapped your supplier and customer base – and considered how changes in the UK-EU trade relationship could affect them?

This checklist has been prepared in response to the 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. 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.

Workforce

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Workforce and future skills needsThere will be changes to how EU nationals register in the UK, the details of which are yet to be announced. If you employ non-British or non-Irish workers from elsewhere in the EU, Government has issued guidance on their present and future immigration statusFurther ahead, there will be changes to the UK’s immigration regime. The British Chambers of Commerce are advising the Home Office on this, using feedback from across the UK Chamber Network.
Future staffing requirementsThere will be changes to how EU nationals register in the UK, the details of which are yet to be announced. If you employ non-British or non-Irish workers from elsewhere in the EU, Government has issued guidance on their present and future immigration statusWhat 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?

Cross-border trade

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UK/EU customs checksAs a ‘third country’, UK exporters to the EU after Brexit may in future be required to make customs declarations.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?
Potential delays at UK/EU borderWith potential customs checks between the UK and the EU, there may be delays at the border.How resilient is your supply chain to potential border delays? Do you have contracts with 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?

Rules of Origin in UK-EU tradeEven 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 exactIf 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?
EU trade agreements with third countriesThe 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
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? Which markets (where the EU has a trade agreement) are particularly critical for you? Please contact us f0r assistance.
Customs facilitations, reliefs etcThere are a number of duty relief schemes available to UK businesses. It may be worthwhile for your business to consider applying for these. There is also a trusted trader scheme – AEO – that may be relevant to you if your supply chain also takes part in it. Please speak to your local Chamber to learn more about these.Do you plan to apply for additional customs relief or trusted trader schemes from HMRC? Read more about them here: https://www.gov.uk/duty-relief-for-imports-andexports
https://www.gov.uk/guidance/authorised-economicoperator-certification
Customs/ export trainingDo you have a member of staff knowledgeable in customs and export? Would it be valuable to train a member of staff in this area? Chambers are able to provide both ongoing support and relevant training.

Taxation

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Import VATWith the UK’s exit from the EU, it is assumed that the UK will also leave the EU VAT area. This means that import VAT may be payable, at the border, on goods imports from the EU.Do you have enough working capital to pay VAT on import of goods from the EU? Have you considered ways to mitigate the potential cash flow impacts of the need to pay import VAT?
Deferment accounts (allowing for duty to be deferred for up to 1 month) are available to companies with 3 years’ VAT recordIf you wish to open a deferment account (to postpone the payment of VAT on goods imports by 1 month), are you able to get a guarantee from your bank?
VAT registration in the EU (services sector)If you trade in services, post Brexit, the working assumption is that after Brexit you may need to register for VAT / appoint a fiscal agent in every EU member state where you supply customers.If you are a services company, in how many EU member states do you supply services? In how many do you have VAT registration? How would getting VAT registration in every relevant state impact your cost
base?

Currency/ Intellectual Property/ Contracts

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Currency riskThe months following referendum have seen significant currency volatility – this may re-emerge in future.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? Your local Chamber can give you recommendations for mitigating these risks.
EU regulatory regimeIt is unclear whether UK regulators will be able to provide licenses for the EU market after Brexit; it is also unclear if notified bodies in the UK can conduct conformity assessment checks on goods
destined for the EU market.
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?
Intellectual PropertyIt is unclear whether trademarks registered in the EU would be applicable to the UK in the future.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?
Contracts reviewSome of the terms in existing contracts may no longer be relevant post Brexit, or may raise legal or practical questions in future.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?