Brexit update from Goodwille – November 2019

Two major events have taken place in the past month; the decision to have a general election in the UK, and an agreement to another Brexit extension.

General election in the UK – 12th December 2019

Last week, it was decided that a general election will be taking place in the UK on 12th December. This is the third national referendum since 2015.

The current Prime Minister, Boris Johnson, called for the election with the hope of resolving the Brexit deadlock. More Conservative seats would make a Brexit deal easier to pass.

However, the results could be the most unpredictable in a generation. According to recent statistics from the BBC, the EU/Brexit question tops the list of issues that British people care most about. Three and a half years since the Brexit referendum, every option is still a possibility.

Brexit Extension – 31st January 2020

The UK was set to leave the EU on 31st October 2019 and although Boris Johnson achieved a revised Brexit deal with the EU, the vote on the deal in the British Parliament did not go through.

In addition, British Members of Parliament adopted an amendment, commonly known as the Benn Act, which aimed to make sure that the UK could not leave the EU on 31st October without legislation in place.

Therefore, on 19th October, Prime Minister Johnson sent a letter to the EU asking for a Brexit delay for a third time. The EU agreed to a further extension until 31st January 2020, with an option to leave sooner if the British Parliament approves a deal.

Brexit will, of course, largely depend on the outcome of the general election.

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This update is for general guidance only. Specific legal advice should be obtained in all cases. This material is the copyright of Goodwille Limited (unless otherwise stipulated) and is not to be reproduced in whole or in part without prior written consent.

Brexit Timeline of Events

23rd June 2016

The United Kingdom European Union membership referendum takes place, commonly known as the Brexit referendum. It results in 51.9 per cent of votes being in favour of leaving.

29th March 2017

The at-the-time Prime Minister Theresa May trigger Article 50 of the Treaty on the European Union, which begins the UK’s withdrawal.

29th March 2019

The initial Brexit day, when the UK was originally set to leave the EU. However, the process is delayed as the Withdrawal Agreement drafted and negotiated by the then Prime Minister Theresa May was not approved in the British Parliament.

7th June 2019

Theresa May announces she will resign as Prime Minister.

23rd July 2019

Boris Johnson is elected new leader of the Conservative party.

24th July 2019

Boris Johnson becomes the new Prime Minister of the UK.

31st October 2019

The UK is supposed to leave the EU, but the departure is yet again delayed.

12th December 2019

General election in the UK.

13th December 2019

The results of the General election are announced.

31st January 2020

Brexit day. The UK is set to leave the EU on this date.

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This update is for general guidance only. Specific legal advice should be obtained in all cases. This material is the copyright of Goodwille Limited (unless otherwise stipulated) and is not to be reproduced in whole or in part without prior written consent.

Alternative access to the EU

For clients who rely on the UK for access to EU markets, Goodwille has looked at other setups to maintain access post-Brexit. In this article we present three possible alternatives for access to the EU market in the event of a no-deal Brexit; Ireland, E-residency in Estonia, and the Netherlands.

Ireland

Ireland will most likely be the easiest alternative to a presence in the UK. The list of positives for Ireland is long. The Irish have a similar jurisdiction to the UK, there are no language barriers, it is relatively easy to set up a company and the corporation tax is lower compared to the rest of the EU. However, one negative aspect for clients who would use Ireland as a base to import and export to rest of the EU is that Ireland could be affected heavily by a no-deal Brexit, as most trade currently goes through the UK to get to mainland Europe.

E-residency in Estonia

Estonia is a member of the European Union. Through the country’s embrace of digital solutions, it allows foreign nationals to become e-residents. Thereby, you could set up a business in Estonia from a foreign country. From what we have read, the stumbling block is whether one could get a bank account without close ties to Estonia. For those looking for subsidiary access to the EU market, it remains  uncertain whether this alternative is suitable at present.

The Netherlands and elsewhere in the EU

If you need access to the rest of the EU because you trade in physical goods, then serious consideration should be given to the European mainland. The Netherlands is an interesting alternative for a number of reasons. Just as in regards to Ireland, it is relatively easy to set up a company in the Netherlands. Due to a highly advanced transport infrastructure, the Netherlands is seen as a gateway to the rest of Europe. In the event of a no-deal Brexit, the Netherlands would not be affected in the same manner as Ireland would.


This update is for general guidance only. Specific legal advice should be obtained in all cases. This material is the copyright of Goodwille Limited (unless otherwise stipulated) and is not to be reproduced in whole or in part without prior written consent.

 

Awareness and possible actions in preparing for a no-deal Brexit

Should I plan? Is Brexit going to even happen? How far should I go with my preparations? How bad will a no-deal Brexit be? All valid questions, with hard-to-find answers as a lot will depend on your own circumstances.

This article aspires to make businesses aware of potential stumbling points in their operations that may be affected in the event of a no-deal Brexit. From the highlighted possible disruptions, one is then able to utilise ones resources in the most effective manner when preparing for a possible no-deal Brexit.

The below is targeted for the Small-to-Medium sized subsidiaries that epitomise the size of clients we have at Goodwille. These companies typically don’t have the resources to spend endless amounts of time, money and effort on no-deal planning. Here it is important to apply a pragmatic approach to an event that keeps being pushed back.

 

Staff considerations

One of the most important aspects of our business are the people that work within it. Travel between the UK and EU will most likely need Visas further down the line (not expected until 2021 at the earliest). EU national staff in the UK may be at risk if they have not taken steps to secure the right to remain in the UK.

Be aware

  • Review staff travel needs on both UK and EU side.
  • Review how many EU nationals in UK business and what actions they have taken.
  • Review plans to move staff to EU or to UK post-Brexit, that may be disrupted.

Possible actions

  • Move forward any plans to move staff between UK and rest of EU before Brexit. Or face more paperwork and restrictions to move after Brexit.

For more information on staff considerations, please refer to our previous article ‘No-deal Brexit from a people/HR perspective’.

 

Selling physical goods in the UK

The likely disruption to physical goods being imported and exported in the event of a no-deal Brexit is expected to be sizeable. Recent reports suggest the UK will significantly reduce reporting requirements at the border, however the EU has maintained the need to protect the Single Market and the Customs Union. So the expectation is large queues on the EU side.

Be aware

  • Refresh understanding of any logistics or supply chains involving UK-EU trade.
  • Get in touch with partners involved in the import/export process to understand their concerns / capacity issues etc.

Possible actions

  • The natural one here is to stockpile, though deciding how much is a risk-based assessment only individual businesses can do.
  • Setting up a UK Legal entity to minimise disruption to UK clients.
  • Make sure you know your EORI number.

 

Regulatory disruption

Goodwille has already seen several businesses in the food industry take steps to ensure they can continue to trade in the event of a no-deal. If your business is in regulated markets, there may be extra scrutiny by new non-EU government departments.

Be aware

  • From a regulatory perspective, find out what your UK business need to continue to operate.
  • Research what processes/applications will you need to implement in the event of a no-deal.

Possible actions

  • Setting up a Limited Company or Branch can be a low-cost solution to ensure continued operation in the UK market.

 

VAT, tariffs and duties

This area is one of the toughest to know what might happen, with reports of no Tariff’s being implemented to the worst-case scenario of WTO tariffs. At Goodwille we have teamed up with partners and will have trained staff internally, to handle all eventualities in these areas.

Be aware

  • Of your VAT reporting requirements and how you charge it currently, i.e. direct from EU or through UK entity.
  • That this area is most likely to change regularly in the time after Brexit, use a local partner to keep on top of changes.

Possible actions

  • Register for UK VAT number.

 

GDPR

The UK’s level of GDPR does not satisfy EU requirements and would be deemed a Third Party. With large fines for non-compliance, having the appropriate clauses or derogations is essential.

Be aware

  • Of any data that is transferred between the UK and the rest of the EU.
  • Any agreements or contracts that may be affected or need to be re-written.

Possible actions

  • Consider updating agreements in preparation for a no-deal Brexit.

For more information on GDPR, please refer to our previous article ‘Data protection in the event of a no-deal Brexit’.

 

For more information

For clients that would like to go into more detail, a more comprehensive list of aspects to consider while preparing your business for Brexit has been provided by the British Chambers of Commerce. Access the British Chambers of Commerce’s Business Brexit Checklist here.

Goodwille can support your business in many of the above areas, including setting up a Limited Company or a UK branch, supporting with UK VAT and help applying for an EORI number, as well as advice you on any HR and staff related questions. Contact us for more information on how we can support your business in preparing for Brexit. 


This update is for general guidance only. Specific legal advice should be obtained in all cases. This material is the copyright of Goodwille Limited (unless otherwise stipulated) and is not to be reproduced in whole or in part without prior written consent.

Goodwille announces partnership with ECUS – and other things we have been doing

Since the result of the Brexit referendum in 2016, Goodwille has been working together with clients, preparing  for the day where Brexit might happen. The preparations continue as the situation develops and more details concerning the British withdrawal from the EU become clearer. In this article we announce our most recent partnership, ensuring that we can help our clients’ businesses thrive in this period of uncertainty.

Building and maintaining partnerships

It is important for us to ensure we minimise the issues of importing and exporting goods in the event of a no-deal Brexit. We are therefore excited to announce our partnership with ECUS, a Swedish company founded by Peter Jacobsson, that specialises in facilitating trade and customs.  The partnership between Goodwille and Ecus ensures we have a plan for the longer-term logistics of moving goods between the EU and the UK.

Moreover, Goodwille continues to work closely together with North Star Law, for immigration expertise, taking the work out of staff movements cross-borders.

Finally, Goodwille will be handling GDPR and VAT changes internally and through our expert network.

Monitoring the risk of no-deal Brexit

One might think that a no-deal is unlikely given the facts that Boris Johnson is lacking a majority in Parliament, and because of the law recently in place to prevent a no-deal Brexit. However, as we have all learnt from the last years in British politics, nothing is impossible. A no-deal Brexit is thus less of a risk than it was a couple of months ago, but it remains a risk.

Keeping up-to-date on relevant updates from HM Government

Since Boris Johnson came to power, we have seen more detail from the government on how to prepare for Brexit. Goodwille encourages all clients to continue to monitor the British government’s website for information relevant to your business.

Updating through our newsletters

Goodwille continues to try to keep you updated through our newsletter and through your contact points at Goodwille. Subscribe to our newsletter here if you haven’t already done so. We encourage feedback and would love to hear what you find useful and if there are any other areas you would like covered. Please email us on hello@goodwille.com if you have any thoughts to share.


This update is for general guidance only. Specific legal advice should be obtained in all cases. This material is the copyright of Goodwille Limited (unless otherwise stipulated) and is not to be reproduced in whole or in part without prior written consent.

Brexit update from Goodwille – October 2019

In this Brexit update from early October 2019, we take a look back at the events of the last month and give you a glimpse of the format of regular bulletins we will be sending in the run up to the current October 31st Brexit date.

PM Prorogues Parliament, and Supreme Court Appeal

Prime Minster Boris Johnson has been fighting the EU on one side and UK Parliament on the other. In an attempt to be able to focus on getting a deal with the EU, or enable a no-deal Brexit depending on who you believe, the PM prorogued parliament, basically shutting it down, for 5 weeks on 10th September. This was later ruled unlawful by the Supreme Court and Parliament was subsequently re-opened on 25th September.

The Benn Act and Government Losing Majority

In an attempt to prevent a no-deal from happening in October, Parliament took control of proceedings and enacted a piece of law intended to force the Prime Minister to extend Article 50, should no deal be forthcoming in the negotiations with the EU. In the days preceding the law passing, and during the fallout after, the Conservatives ended up losing their majority in parliament.

Parliament rejects a General Election

In a frustration for the UK government, Parliament has rejected calls for a General Election. The opposition maintain it is to ensure a No Deal exit cannot happen. With Boris maintaining that he needs the threat of no-deal to get the EU to move its persistence to push for the Withdrawal Agreement, which has thrice been rejected by the UK parliament.

Boris Johnson’s alternative arrangements

Any documents or plans the government have so far presented to resolve the current impasse in negotiations, have been rejected by EU as not doing enough to replace the Irish Backstop. Opposition parties are concerned Boris Johnson is just trying to look busy and whittle down the clock to a no-deal Brexit.

Party conferences underway as Government parties prepare for possible General Election

In the UK it is party conference season, where parties decide their latest policies. The Liberal Democrats and the Labour Party had theirs during the shutdown of parliament. In a bizarre twist the upcoming Conservative conference is happening with Parliament still running, due to the Supreme Court ruling. Requiring Conservative MP’s to need to shuttle back and forth from London and Manchester.

Talks of a Government of National Unity

Since Boris Johnson lost his majority in the UK parliament, there have been widespread rumours of the possibility of a Government of National Unity to take control of proceedings. The only problem with this is no one seems to be able to decide who that should be and what price that support would cost.

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This update is for general guidance only. Specific legal advice should be obtained in all cases. This material is the copyright of Goodwille Limited (unless otherwise stipulated) and is not to be reproduced in whole or in part without prior written consent.

No-deal Brexit from a people/HR perspective

Whilst it is clear with the appointment of Boris Johnson as Prime Minister that there will be a different tack to negotiations with the EU, at the time of writing the EU has maintained the stance it does not intend to renegotiate the terms of its deal with the UK.

In the case of a no-deal Brexit, it is likely to become more expensive and difficult for people to work, study and live across borders in the long run as well as gaining access to healthcare, benefits and social services.

For individuals

At this time, for current residents (EU citizens located in the UK by/on 31st October 2019) the UK have provided a grace period to continue to reside in the UK. They may apply for pre-settled status or settled status depending on certain qualifying conditions. EU citizens residing in the UK on exit day may also continue to receive temporary access to healthcare until December 2020. In terms of professional qualifications, EU citizens who have had their qualifications recognised in the UK by exit day will be protected.

EU Nationals who are not residing in the UK by/on exit day can still come to the UK to work or study without applying for immigration status or visas, as long as they do not stay for longer than 3 months. This means that it will still be possible for short-term business trips to happen. This arrangement will remain in place until the new UK immigration system comes into effect in 2021. For EU Nationals who are looking to stay in the UK for longer than the 3-month application free period, it will be possible to apply for Temporary Leave to Remain which grants up to a 36 month stay to work or study. Once this expires, EU Nationals will need to apply via the new immigration visa system and their time spent living in the UK via Temporary Leave to Remain will not count towards any permanent residency application. So far, the EU has granted UK nationals visa-free travel in the event of no-deal, allowing visits for 90 days in any 180 days.

For employers

There is speculation that there could be an economic slowdown due to Brexit which could in turn result in recruitment freezes. What we do know is that there will be more hurdles for HR when recruiting EU citizens into UK businesses and perhaps difficulty in replacing key personnel with certain skillsets (e.g. languages). When carrying out pre-employment screening, HR will also need to be mindful of changing data protection laws (as the UK will be considered a third country) if references need to be sought outside of the UK.

Another concern for employers is the potential change to secondment arrangements, whereby until now the UK has enjoyed favourable agreements with most EU countries for taxation and social security purposes. As of now, the UK has reached bilateral agreements with both Switzerland and the EFTA countries to protect existing healthcare arrangements in a no-deal scenario. The UK have also published draft Statutory Instruments in relation to the social security treatment of individuals in order to maintain current EU principles and rules on social security, however this does not affect social security in other EU countries.

In summary, even in a no-deal Brexit scenario, it will no doubt be more arduous but in no way an impossible situation.


This update is for general guidance only. Specific legal advice should be obtained in all cases. This material is the copyright of Goodwille Limited (unless otherwise stipulated) and is not to be reproduced in whole or in part without prior written consent.

Data protection in the event of a no-deal Brexit

If the UK exits the EU on 31st October 2019, it would technically mean that all data transfers between the EU and the UK must cease with immediate effect come midnight on that date. This would be the case until one of the following three mechanisms available for transferring data to countries, which are not considered to offer adequate protection of individuals’ data, has been put in place:

1. Binding Corporate Rules

These rules are suitable for large multinational corporations as these cover intra-organisational data transfers of personal data across borders.

2. Derogations

Derogations (an exemption from or relaxing of the law) should be applied restrictively and are only suited to processing, which is occasional and non-repetitive.

3. Standard Data Protection Clauses

For most small to medium-sized companies, these clauses are likely to be the preferable, or indeed only, option for ensuring that data can continue to flow between the UK and the remaining EU member states. However, it is important to note that these must not be modified and must be signed as provided. While they can be added to a wider contract, or have additional clauses added to them, care must be taken to ensure the standard clauses are not contradicted. Another key element to highlight is that these clauses will always be governed by the laws of the Member State in which the EU-based party is based.

When considering what steps to take in order to keep making international transfers of data, it is worth assessing current relationships with other parties. Is your company the controller of the data transfers, or the processor? Ultimately, the onus to ensure the transfer is legally permissible is with the controller. Having said that, Goodwille strongly recommends clients to adopt a proactive approach. It may be appropriate for a processor to be the driving force behind putting one of the three above-discussed mechanisms in place. This should be done by the 31st October 2019, regardless of the outcome of the Brexit negotiations.

Do you have any questions about how a no-deal Brexit might affect your business’s data protection and how you ought to prepare? Do not hesitate to contact us – we’d be happy to answer any questions you may have.


This update is for general guidance only. Specific legal advice should be obtained in all cases. This material is the copyright of Goodwille Limited (unless otherwise stipulated) and is not to be reproduced in whole or in part without prior written consent.

Brexit update from Goodwille – August 2019

Last week, the British Prime Minister Boris Johnson visited his German and French counterparts, before going to the G7 summit in Biarritz, France. This was Johnson’s first appearance on the international stage since he took over the Premiership last month. Mrs Merkel and Mr Macron wish to avoid a no-deal Brexit as they think it would damage the EU and individual Member States, albeit less than Britain. However, the British Prime Minister is determined that the UK will leave the EU on 31st October 2019, with or without a deal.

Earlier this week, upon request from the Prime Minister, Queen Elizabeth II agreed to prorogue Parliament from the second week of September to 14th October 2019. The Prime Minister stated that the prorogation will give Government time to prepare for its “new and ambitious agenda”, and that there will be “ample time” for MPs to debate Brexit.

Prorogation is a formal mechanism to end a session of Parliament, normally lasting only a short time until proceedings begin again with a new Queen’s speech. It means Parliament’s sitting is suspended and ends all legislation currently under discussion.

Prorogations are not controversial in British politics, however this  prorogation has already been highly criticised. Critics include the opposition and the House of Commons Speaker John Bercow, as well as Tory MPs and the general public. A petition calling on the government not to prorogue Parliament has already been signed by over 1 million people. Critics argue that the length and timing of the prorogation is constitutionally wrong, and that the actual purpose of it is to stop Parliament debating Brexit, in order to hinder anti-no-deal legislation.


This update is for general guidance only. Specific legal advice should be obtained in all cases. This material is the copyright of Goodwille Limited (unless otherwise stipulated) and is not to be reproduced in whole or in part without prior written consent.

Alternatives to a no-deal Brexit

The British Prime Minister, Boris Johnson, has stated that the UK is leaving on the 31st October 2019 “no if’s, no but’s”. The markets seem to believe him as the pound continues to fall against other major currencies. The EU continues to maintain that the only deal available comes in the form of the Withdrawal Agreement (WA) along with the highly controversial Irish backstop, agreed with Theresa May’s government. From the UK perspective, the WA has been rejected 3 times by the UK Parliament and therefore, it is considered dead by many, particularly the new government. Assuming the WA does not go back to Parliament, what alternative routes exist that do not result in WTO no-deal exit?

Government loses control

Boris Johnson has a very narrow majority in Parliament. However, Brexit is a cross-party issue. It could either be through a vote of no confidence, leading to a government of national unity, or a general election, or even just to control the legislature to block a no-deal exit, resulting in a further extension of Article 50 or even a revocation should there be perceived lack of appetite from certain EU leaders for a further extension. If this were to take hold, it would need to happen in early September, and even then, the Remain side have been fighting among themselves to decide who should lead this group.

WA without backstop

The backstop remains one of the most controversial elements of the current deal available to the UK. The EU has consistently stated that it would not entertain removing the backstop and, for the time being, we should hold them to their word. Recently, Boris Johnson has been given the challenge to come up with credible “alternative arrangements” by the 20th September to allow the backstop to become redundant. There is scepticism this can be delivered, and therefore this avenue seems unlikely.

Free Trade Agreement (FTA)

There were rumours that the EU had always been prepared to offer a Free Trade Agreement before Theresa May started negotiations that lead to the Withdrawal Agreement. Many of the current Conservatives have wanted to work towards an FTA, similar to Canada’s, from the very beginning. Though it is quite unlikely, this could be implemented or agreed upon in the short period of time remaining. This may be the final destination for the UK-EU relationship, but it is not going to happen by 31st October.

EEA (Norway Style)

A type of Brexit that seems to never go away is the Norway style membership or EEA membership. In some ways, this provides the most deliverable transition at this juncture with the least disruption, considering the constraints of time and distance in consensus between both UK and EU parties. It would need ratification by the EU and the other members of the EEA group. So far, the UK has not entertained this option, but with all sides not wishing for a no-deal Brexit, this could and would be pushed through should the UK head for this option.

Standstill Agreement

Should a no-deal exit look very possible as we approach 31st October, or even have come to pass, there have been persistent rumours that some form of Standstill Agreement would apply to minimise the disruption. The Institute for Government have produced a good, concise article covering what is probably possible and the difficulties of achieving a Standstill Agreement.

In Summary

Even with 2 months to go, it is impossible to say where we might end up. There are still many things that can and will happen between now and 31st October. Should none of the above options come to pass, then the default remains a no-deal exit, with all the unknowns and likely disruption that will occur to both sides.


This update is for general guidance only. Specific legal advice should be obtained in all cases. This material is the copyright of Goodwille Limited (unless otherwise stipulated) and is not to be reproduced in whole or in part without prior written consent.