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What the Brexit Trade Deal means for your business

The Brexit deal has been approved in Westminster, and provisionally approved in Brussels. This isn’t the end for Brexit – businesses should expect years of continued discussions between the two – but it does represent a moment for businesses to be able to start making long-term investment decisions and move away from short-term contingency planning.

Trade deal summary

The Trade and Cooperation Agreement guarantees tariff-free access for goods between the UK and EU, and also gives the UK freedom to strike trade deals with new countries around the world.

Services businesses will be pleased to see that the deal goes further than previous EU deals in this area, but disappointed at a lack of mutual recognition on key standards and qualifications.

The reality of the deal means that while the Brexit trade negotiations are officially at an end, the UK and EU will be engaged in negotiations of one kind or another for some years to come. Whether that’s the next stage of agreements for fishing quotas following the 5-and-a-half-year period agreed in this deal, or mutual environmental and state aid assurances.

The UK and EU are free to diverge on various standards, but such divergence could mean new tariffs if an independent arbiter deems that such divergence puts one side in the position of a trading advantage.

As with any document of this scale, much of the material covered references previous treaties, elements of EU law, or in some cases outdated or arcane technology – defunct email software Netscape Communicator is mentioned for instance – and over 1,200 pages of documents are likely to spring surprises for businesses as time goes by. So while it will be incredibly difficult to scrutinise the detail, it’s important to ensure that your business checks carefully for references in the trade deal that will impact you.

However, here is a summary of some of the key points to note for businesses across different sectors.

Businesses moving goods between the UK and EU

The agreement means that there will be no new tariffs on goods entering the EU and vice-versa. The deal has not removed the need for customs declarations and paperwork, however, so there will be some non-tariff barriers to trade.

Check what paperwork you may need here: www.gov.uk/export-goods^.

You will need to decide how you’ll make customs declarations. You can either get someone to do this for you^, this is what most traders do, or do it yourself^. Your ability to make customs declarations yourself will depend on the resources at your disposal, but it’s important to not underestimate how much time and effort it will be to do it yourself.

Exporters who are familiar with the process for exporting to countries outside of the EU, including Switzerland, Norway and Iceland, will be well aware of the process for declaring goods.

If you import goods from the EU that are on the controlled goods list^ (such as animal products, alcohol or tobacco, or firearms), you will have to make declarations. If you import goods from the EU into Great Britain that are not on the controlled goods list, and you have a good compliance record, you have the option to defer declarations for up to 6 months^.

European businesses should ensure they are familiar with the particular requirements for the country they are based in.

The other essential item for your list is to ensure you have a EORI number. This registration allows you to export – at present to non-EU countries, but after the end of the transition, also to the EU.

All businesses who are VAT registered traders were auto-enrolled, so most should already have a EORI number. However, if you don’t you can register for your EORI number here.

In the UK, to manage freight traffic volumes, the UK Government now requires lorries entering Kent and bound for the ferry and Channel Tunnel terminals to carry a Kent Access Permit^ - already nicknamed a Kermit. The Kermit will be required for any lorry heading to the Kent ports, and ANPR cameras (Automatic Number Plate Recognition) will be used to enforce the new rules. This is to help avoid roads around Kent becoming gridlocked with traffic if border delays do become a reality – something we saw in December 2020 due to a temporary closure of the border due to Covid-19.

Businesses moving goods between GB and Northern Ireland

Businesses moving goods eastwards from Northern Ireland to Britain will face no restrictions or additional checks.

However, goods moving from Great Britain to Northern Ireland will face some new checks and require new documentation; particularly, animals, food and manufactured goods. The government has sought to ensure these checks and documents are kept to a minimum.

To ensure this, they have introduced the UK Trader Scheme. Businesses can register with the scheme to ensure they are not charged tariffs on goods moving from England, Scotland or Wales into Northern Ireland, which are not ‘at risk’ of travelling onwards into the EU.

Businesses in England, Scotland and Wales will also be able to transport goods to Northern Ireland via Irish ports such as those in Dublin, without having to pay any additional tariffs when passing through the Republic of Ireland.

You can apply for the UK Trader Scheme here^ and read more on specific types of goods impacted here^.

Service businesses

If you are providing services into the EU, it will be important to keep up to date with evolving agreements. For instance, the British Chancellor, Rishi Sunak, has already stated that he hopes the planned memorandum of understanding on financial services will be agreed in the coming months.

Keeping an eye on other such equivalence agreements will be crucial. In general terms, the agreement goes further on services than previous EU trade deals, offering commitments on market access, however all of these provisions are subject to a list of exceptions and vary from one member state to another.

Just one example here, as noted by the Institute for Government, is a UK lawyer seeking to provide advice to a Czech business would need to be resident there to do so, while in neighbouring Austria the opposite is true meaning the UK lawyer must not be resident. This web of complex supra-national agreements will be complex to understand, and likely to change over time.

Professional qualifications are not mutually recognised, meaning UK professionals will need relevant qualifications for each EU state they want to work in.

Data – cross-border flows

The EU's General Data Protection Regulations, that we all became so familiar with in 2018, still apply in the UK and EU after transition, as they have been written into UK law as the Data Protection Act 2018.

However, there could be implications for the flows of data between EU nations and the UK. So it is important to identify where you receive data into the UK from the EEA or vice versa. Consider which GDPR safeguards will allow this to continue post-transition.

If you operate across Europe, review your structure, processing operations and data flows to assess how Brexit will affect the data protection regimes that apply to you, and identify whether any details in your privacy information or internal documentation will need to be updated.

Data flowing from the UK to the EU will not be affected, but data coming the other way could be. The EU is undertaking a data adequacy assessment of the UK, which is still ongoing after the transition end. An initial 4-month agreement has been reached to allow data to continue to flow freely. Following this assessment, businesses may need to put in place standard contractual clauses or to seek alternative methods of transferring data.

Corporates with bases in the UK and EU may find that existing EEA-approved binding corporate rules are sufficient for data transfers. But the most important thing is to map all of the data flows and prioritise large volumes of data coming from the EU to the UK. The Information Commissioners Office has a wealth of information^ on this topic which is regularly updated.

Immigration and access to talent

With the end of free movement between the UK and EU nations, the UK has moved to a points-based immigration system. This prioritises workers regardless of where in the world they are from, with the exception of Irish citizens, who will continue to benefit from the Common Travel Area between the UK and the Republic of Ireland – an arrangement that pre-dates the EU.

Workers coming to the UK will need a visa, be able to speak English and be coming to a job with a minimum salary of £25,600. Businesses can sponsor workers (in much the same way as they might previously have done for non-EU citizens), and if you expect to need to sponsor skilled workers, you should register to do so right away here^.

Non-skilled workers are unlikely to be offered work visas into the UK, according to current government policy. However, the sad fact of rising unemployment due to Covid-19 means that businesses should not face a shortage of people in the short-term at least. Read more about the new points-based system here^.

Workers from the European Economic Area and Switzerland who were resident in the UK by 31 December 2020 have until the end of June 2021 to apply for settled status under the EU Settlement Scheme^.

Business trips

You and your staff will be able to enter the EU (and vice versa) without a visa if you’re not staying for longer than 90 days, or undertaking a limited number of activities. So attending conferences and business meetings will be fine. However, if during your visit you will be carrying out a contract to provide a service in a country you have no presence in, you might need a visa or work permit.

Extra consideration to insurance should obviously be given. EHIC cards will continue to be valid for UK citizens up to their expiry dates and will be replaced by the Global Health Insurance Card – the rules differ slightly in non-EEA nations such as Norway or Switzerland, so it’s important to check before you travel.

If one will be taking and driving their own vehicle, a green card from your insurer will be required – you may need to show this at the border.

Support from the UK Government

For British businesses the UK Government’s web page is the best place to find all of the latest information about how your business should adapt to the UK’s new relationship with the EU. The website is at gov.uk/transition^.

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