The Impact of Brexit on Startups in the UK

Since the final withdrawal of the UK from the EU earlier in 2021, the future has looked uncertain for many startups and businesses looking to do business with countries in Europe. 

Here are 5 things we’ve seen so far that have impacted UK startups since the UK left the EU.

1. More Documents

With the Brexit update, small businesses taking goods for business purposes need to fill in customs declarations when exporting. 

The government claims that this is about protecting the UK's border and making sure that tax is paid correctly.

To fill in these declarations, you will need to know the values of your goods, which means business owners must have full knowledge of what they are importing or exporting. 

It also means that they may have to pay VAT on goods even if they take it out of the country again within three months.

The Brexit update also states that businesses will need to keep records of their imports and exports for 4 years after their transaction

This includes invoices, receipts, transport documentation, and other proof that you have not evaded tax during any transactions. 

Business owners should already be keeping these documents for accounting purposes anyway so it should not be a problem.

Businesses will also need to make sure that any employees dealing with foreign trade are able to confirm the country of origin of goods being imported or exported. 

With the new Brexit changes, it will be more important than ever for business owners to keep accurate records of their transactions especially when trading internationally.

2. Mobile Phone charges

In September, Three became the latest UK mobile operator to announce charges for customers using their phones in Europe.

If you’re travelling abroad from the Uk to Euopr, you can expect this to be an additional expense. 

The new law to protect customers from paying excessive amounts for mobile data while roaming in the EU came in on June 15th 2017. Your operator should give you a warning text when you reach the £45 mark and again at £50 informing you that if you continue to use data outside of the UK beyond that point then it will cost more. 

You then have the option to stop using data altogether or to spend more. If you do not opt-in to continue using data then it should stop working automatically when you reach this point.

3. Licenses to employ EU workers

In order to hire someone from outside the UK, an entrepreneur will need to have a sponsor licence. 

In order to attain one they will have to go through a process with the Home Office in which they will need to prove that they can meet certain requirements. 

For instance, if a business wants to hire a skilled worker from outside the EU they’ll have to prove that they have met certain criteria and show that they can pay for them for a particular length of time for their employment.

The visa system is based on an assessment made by the employer on whether they are able to meet these requirements and therefore be granted permission to hire someone from outside of the UK. 

The system is currently undergoing changes, but it is unlikely that this would affect how you recruit workers from outside the UK. 

According to shieldgeo.com, as of December 31, 2020, EU employees will need a work visa just like any foreign national in the UK. 

4. Accessing data

Since the UK has left the EU, a business in the UK might not be able to access personal data from the EU without the right arrangements in place. 

For now, the EU-UK Trade and Cooperation Agreement is set in place, which enables a bridging mechanism to allow the continued free flow of personal data from the EU/EEA to the UK after the transition period, until adequacy decisions come into effect, for up to 6 months.

EU adequacy decisions for the UK would allow for the ongoing free flow of data from the EEA to the UK. 

At present, there are no adequacy decisions or recognised mechanisms in place that enable a business in a third country (non-EU/EEA) to transfer personal data from an EEA country to a third country. 

This means that post-Brexit, if you're based outside of the UK and have customers in the UK, you'll need to rely on model contracts or codes of conduct to enable you to continue sending personal data from your servers outside of the UK to your customers' servers within it.

5. Living and working

The Brexit vote has made it more difficult for people to work in the UK as well as the European Union. In fact, this is a major change as people from certain countries can no longer freely work in the EU. There are many factors that affect the immigration process to the UK and Europe. These include free movement of people, visa requirements and migration rules.

The Brexit vote is going to have a significant impact on visas and employment permits for EU nationals. Without proper prior documentation, people living in the UK can no longer freely work in the EU. One will need to check each EU country’s requirement before going there to work, study or spend more than 90 days of any 180 days in the EU, Switzerland, Norway, Iceland or Liechtenstein.

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