Preparing for Brexit

***Updated 17 January 2020*** 

With the UK set to leave the European Union on 31 January 2020, businesses of all sizes should continue to take practical steps and ask questions in order to prepare for whatever kind of Brexit and future trade arrangements lay ahead.

From the 31 January 2020 until 31 December 2020 the UK will be in an implementation period, sometimes called the transition period, with the EU whereby the UK will continue to follow all the rules, laws and regulations from the EU until the 31 December 2020.

By 31 December 2020, the UK and EU will need to have an agreed set of arrangements for future trade which will outline how the future relationship between the UK and EU will work.

There is still a risk of No Deal Brexit on 31 December 2020 and so businesses should still continue to prepare for this, by understanding how leaving the EU might affect their own operations and employees, as well as their suppliers and customers. See government guidance on preparing your business for Brexit.

We know that each of our Members’ businesses is different, and so leaving the EU will impact companies in different ways. Working with our members, ADS has developed a “Brexit Readiness” questionnaire to help you put together your Brexit plan.

You can also find further Brexit readiness documents produced by Sharing In Growth including webinars on movement of people, goods and data regulations post Brexit on their website.

Actions to consider now

As the UK moves closer to leaving the EU, there are very tangible steps ADS Members must take – including on your EU workforce, regulatory regimes and customs regimes – to be prepared for the changes Brexit will bring.

Download sector-specific advice and guidance on preparing for Brexit:

Prepare for full customs compliance and costs

Currently, trading with business in the EU27 requires the same paperwork as trading with businesses in the UK. When the UK leave the Single Market and the Customs Union, UK companies exporting to or importing from the EU will have to make additional customs declarations and prove goods comply with EU or new UK regulatory standards.

Questions to consider:

  • Do you currently only trade with the EU?
  • Will continuing trade with the EU be your first experience of importing or exporting?
  • What customs procedures do you currently comply with compared to potential new ones?
  • What is the cash flow impact arising from import duties and unrecoverable VAT?

Actions to consider:

  • Use check lists to help get your business ready to export and ready to import goods to and from the EU post-Brexit.
  • UK businesses should get an Economic Operator Registration and Identification (EORI) number (if you don’t have one already).
  • Consider registering for Transitional Simplified Procedures (TSP).
  • Familiarise yourself with the information required for Custom Declarations.
  • Consider how you will submit customs declarations for EU trade.
  • Agree responsibilities with your customs agent and logistics provider for each part of the process and update your contracts to reflect this.
  • Identify the EU systems and services that your business currently uses which the UK will lose access to in a no-deal scenario, you may need to move to a host site.

Actions to consider:

Assess exposure to customs checks & delays at the UK-EU border

The UK Government has said that the UK will leave the EU Single Market and the EU Customs Union after Brexit. Doing so will require goods moving across the UK-EU27 border to be declared for customs purposes.

Many UK and EU27 ports lack the physical and technological capacity to handle increased customs checks, which could result in delays at the UK-EU border.

Questions to consider:

  • How resilient is your supply chain to border delays?
  • Do you have contracts with penalties for late delivery?
  • What would be the cost of warehousing spare stock or components?

Actions to consider:

  • If possible, businesses may want to renegotiate commercial and delivery terms to reflect any changes in customs and excise procedures.
  • If renegotiation is not possible, businesses should assess their ability to comply with contractual terms and ways to ensure compliance of goods to avoid border delays.
  • Businesses should talk to their EU customers and suppliers to ensure all parties are preparing for changes and the new treatment of UK businesses and UK goods.

Useful resources:

  • Government guidance on preparing for changes at the UK border after a No Deal Brexit

Assess dependence on EU regulatory regimes

One of the critical issues the UK and EU27 face is the relationship the UK will have with EU agencies and regulatory bodies, including the European Aviation Safety Agency (EASA) and the EU REACH regime. In some cases, such as with EASA and ECHA, the Government has indicated a preference to stay within the EU regime, but in a No Deal scenario this may not be possible.

Questions to consider:

  • If the UK diverged from EU regimes, what would it mean for you, your suppliers, and your customers?
  • Have you assessed the potential impact on your operational capability if EASA and REACH certification cease to apply?
  • Are you applying for new certifications or approvals which have been published by both the EU and UK to maintain a degree of continuity under a No Deal Brexit?

Actions to consider: Third country approvals from EASA

As part of the EU mitigation measures, EASA has opened an early application system for UK aerospace companies to obtain Third Country approvals, which will allow products to continue to be recognised within the EASA system in the event of No Deal. Many UK companies have already applied and obtained Third Country certification, but any aerospace company which has yet to do so should consider applying as a matter of urgency, as this will be the only way to keep releasing new products into the European market immediately after a No Deal Brexit. Further details can be found on the early applications section of the EASA website.

Useful resources:

The government continue to  publish guidance papers to business with practical advice on how to prepare for the event of a No Deal Brexit:

The EU has also published further information for companies to consider:

Understand your workforce

As part of the Withdrawal Agreement, the UK and the EU have agreed on the rights of EU27 and UK citizens’ post-Brexit. The rights and status of EU citizens working in the UK and of UK citizens working in the EU27 will differ depending on their current immigration status.

In terms of your own workforce, companies can start preparing be asking the following questions:

Questions to consider:

  • What proportion of your employees are from the EU27 and what will their status be post-Brexit?
  • Are they in critical roles?
  • Could you adequately recruit replacements if you had to? Will new recruits require sponsored working visas?

Actions to consider:

  • Consider what ‘right to work’ checks (e.g. passport and/or national identity card) apply until the end of 2020.
  • If you are an EU citizen, or you employ EU citizens, please apply to the EU Settlement Scheme to ensure the right to continue living in the UK after 30 June 2021.
  • You may wish to signpost the information that the Government is providing to your employees.
  • Ensure you and your employees follow FCO travel advice for applying for work visas in EU27 countries.

Useful Resources:

  • A EU Q&A on the rights of UK and EU27 citizens’ post-Brexit can be found here.
  • EU Settlement Scheme employer toolkit should equip employers with information to support the EU citizens and their families to apply to the EU settlement scheme.
  • For more information on visas and immigration related to work in the UK, visit here.
  • For more information on visas and immigration relate to work in the European Union, consult the FCO foreign travel advice.

Invest in your competitiveness

Even though the final shape of Brexit is still unknown, UK companies are likely to face increased costs, for example new administration costs of moving goods across the UK-EU border. These new costs would be in addition to the existing global competitive pressures to increase production, improve productivity and cut back costs.

Participating in programmes such as NATEPSC21, SC21 Competitiveness and Growth or Sharing in Growth will help make your company globally competitive regardless of the shape of the final Brexit deal.