One of the most notorious events of the past years in the European Union is the United Kingdom’s departure from it, also called Brexit. Even though the decision was made back in 2015, the UK formally left the EU only in February 2020.
For two years now, the job market in the UK has changed due to Brexit; the consequences of leaving the EU can be felt in every sector and every industry. Some changes were positive, some definitely negative, and others you’ll just need to get used to. How is Brexit affecting the process of establishing a company in the UK? Let’s talk about it.
Will Brexit affect my business?
Unfortunately, since Brexit is a major economic event that introduces a major change in the UK’s trade, investments, and manpower, its effects will most likely be felt by every business in every industry – at least to some degree.
The largest impact can be noticed in businesses that deal with international trade – the UK no longer has access to the EU’s free trade agreements and customs deals, making trade with non-EU countries more difficult. Trading with the EU countries has also been affected, as the UK is now seen by many of them as selfish for leaving the EU, and they are no longer happy to provide the United Kingdom with preferential treatment.
Which areas of business are affected by Brexit?
There is no universal impact Brexit has on companies – every company will feel the effects of Brexit a little differently, depending on its industry, target, and operations. There are several sectors that involve the most amount of uncertainty nowadays, including supply chains, customs, workforce, and regulations.
Many of the pre-existing supply chains were forced to rebuild after Brexit, delaying deliveries and increasing costs of supply for many companies. The latest rendition of Incoterms – a series of commercial terms published by the International Chamber of Commerce – has been published in 2020, introducing many changes. While previous contracts aren’t forced to operate based on these new rules, any new contracts will by default use Incoterms 2020, unless specified otherwise. The new rules define responsibility for customs declarations and import taxes, a lot more of which rests on UK businesses after Brexit.
When it comes to customs, make sure to acquaint yourself with the EU-UK Trade and Cooperation Agreement, or TCA. This document was introduced in May 2021 and sets out some preferential arrangements in many international trade areas, including goods and services, digital trade, intellectual property, energy, transportation, security, law enforcement cooperation, and a lot more.
The TCA doesn’t provide as optimal terms as the UK had when it was still a member of the EU, but it still provides a solid basis for international cooperation and trade between the UK and the EU. It includes a Free Trade Agreement, a close partnership on citizens’ security, and an overarching governance framework.
Is it possible to start a business after Brexit?
Over 60% of business owners declared that they don’t have any relocation plans following Brexit and will continue operating in the UK just as they were. If you’re planning to open a new business after Brexit, take into consideration the economic and political consequences that will follow it. Factor these changes in when creating your business plan, as they will be crucial in helping you convince investors and stakeholders.
Need help with establishing a new company after Brexit?
Check out Workhy – we offer professional help in starting a business in the UK, along with online bookkeeping solutions and handling tax-related transactions. We cooperate with local experts to bring you the highest quality of service. If you’re not sure how to start a business after Brexit, contact us!
