WHAT DOES BREXIT MEAN FOR YOUR BUSINESS?
9 THINGS ENTREPRENEURS & STARTUPS NEED TO KNOW IN 2021
Remember when Brexit used to be the biggest headline hitting our screens? It might feel like a lot has changed since the UK voted to leave the EU, but 2021 is the year that Brexit becomes a reality. Whilst perhaps old news, as the UK actually left back in January 2020 and in turn entered a 12-month transition period where negotiations took place, effects of these changes are now being felt, as new rules and regulations came into force on 1st January 2021.
So, it’s time your company got acquainted with what Brexit actually means for your business. We’ve compiled 9 things startup founders need to know about all things Brexit.
1/ Your employees
For founders, you might be understandably concerned about ensuring your current employees are protected, and that any future hires are possible. The main thing to ensure here is that all your employees that aren’t yet UK citizens get registered for Settled Status.
Settled status is a fancy way of saying that your employees will be able to retain the same rights as UK citizens, and therefore the right to remain in the United Kingdom and work.
How does this work? Employees who’ve resided in the UK for five or more years by 31st December 2020 are eligible to apply for Settled Status. Those having lived in the UK for less time can apply for Pre-settled Status. Once the five-year milestone has hit, they can then apply for Settled Status. The deadline for applications is 30th June 2021, we recommend that you speak with the employees concerned immediately as June will come around fairly quickly.
2/ What about hiring?
When it comes to EU-based recruitment, the immigration system has been reworked to a points-based model.
The points-based system includes a route for skilled workers who have a job offer from an approved employer sponsor.
The job will need to be at a required skill level of A level and or above. Your candidate should speak English and be paid the general salary threshold of £25,600 or the going rate for your job, whichever is higher.
If, as an entrepreneur or founder, you’re concerned about how this may impact your business, you can look to apply for a sponsor license to allow you to subsequently hire EU nationals going forward.
3/ International trade
If you regularly import and export as part of your startup’s supply chain, there’s a high chance you already know exactly how Brexit has impacted international trade. But for founders who infrequently deal internationally, let’s break down what the new regulations mean for your business.
When it comes to importing, the steps you need to take are clearly outlined on the Government website - click here . The rules changed as of 1st January 2021. The main things to note are:
- You now need to make customs declarations when you import goods from the EU
- You need to ensure you have a new EORI number that starts with GB to import goods into England, Scotland or Wales, and you may need one that starts with XI for Northern Ireland
- You need to find out the commodity code on your goods to understand the rate of duty you’ll need to pay
- You’ll need to check if you need a license for any of the goods you are importing, as the rules for importing some types of goods have changed
4/ Exporting to the EU
When it comes to exporting, the steps do not defer much from importing.Again, steps are explained on Government website and on Royal Mail website for gifts and good sent by post. The rules changed as of 1st January 2021. The main things to note are:
5/ Cash flow
From January 2021, businesses will begin to see the extent of the impact Brexit has on companies.
Check up on the tax treaties that have been agreed between the UK and the country you’re concerned with, to understand whether this affects your company.
If you sell online, ensure all check-outs allow the option for non-GBP payments to maximise sales. Assessing your cash flow and finances is something all startups can benefit from whether there is a change or not, so use Brexit as the perfect excuse to get on top of your business.
Aside from the personal holidays we’re all hoping to book in 2021, if you’re travelling for business this year, it’s good to be aware of the following facts:
On the day you travel, you must ensure your passport is valid for the next 6 months or more, and that it’s less than 10 years old. If not, you’ll need to renew your British passport. These stricter rules do not apply for travel to Ireland, however.
European Health Insurance Cards (EHIC) expired on 31st December 2020 - ensure you’ve got the adequate travel insurance so you’re covered.
You are able to stay up to 90 days in any 180-day period without a visa. To avoid billing surprises, check with your phone operator on any changes to roaming charges.
7/ Devaluation for the currency?
Devaluation in GBP is inevitable, but this may encourage trade and investment as we move through 2021 - something founders can get excited about.
But, is it really possible? Yes, it involves our MP doing no more than many other successful countries do all the time, to keep their exchange rates competitive.
Will it happen? Time will tell but, if not, we expect UK living standards to be no higher in 2030 than they were in 2019 or even 2007. If we continue with our current exchange rate policies, our economy may well stagnate for a whole generation.
8/ A way to support our local shops and products
If you’ve been reading the updates on importing and exporting, thinking your independent startup won’t be affected - think again. A huge trend we’ll see this year that can be considered as hugely useful for independent businesses, is as the cost of imported goods rise, consumers will favour small businesses, giving independents a chance to thrive.
The trend has already started during the lockdown where communities started to invest and buy in their local shops and restaurants to support them through the pandemic.
It’s been reported that many public sector roles handled by the EU will now be handled within the UK itself, so startups have a unique opportunity to pivot to support companies within this sector.
Best wishes for your business!!!