With the UK drawing the first anniversary of the Brexit transition period ending, some short term effects of Brexit (positive and negative) have already presented themselves to businesses.
As the impact of Brexit becomes clearer, this article addresses the questions a business owner needs to ask, in order to understand what a post-Brexit world will look like for your business and how your business might be able to benefit:
- what businesses will be affected by Brexit?
- what business opportunities will Brexit bring?
- which businesses will benefit from Brexit?
- who can I get legal assistance from?
What businesses will be affected by Brexit?
Due to the widespread trading relationship the UK has with the EU, nearly every business will have been impacted as we left the bloc.
Recent surveys have shown that 23% of firms believe that Brexit was their top source of uncertainty in 2019, increasing from 9% in 2016.
For example, Brexit impacted a great number of businesses in terms of GDPR, or General Data Protection Regulation, which is a legal framework that sets guidelines for the collection and processing of personal information from individuals who live in the EU.
At the end of the Brexit transition period, GDPR was brought into UK law as ‘UK GDPR’, with the Trade and Cooperation Agreement detailing that the UK and EU will continue to cooperate on digital trade in the future. Our post-Brexit GDPR refresher blog post delves further into the impact of Brexit on GDPR.
The Information Commissioner's Office (ICO) has recommended that businesses put in arrangements, such as setting out binding corporate rules or standard contractual clauses on data protection. To learn more about how Brexit can affect GDPR, as well as GDPR in relation to how businesses can comply with their laws, you can read our blog post ‘Handling Personal Data Correctly’.
UK businesses which import composite products (food intended for human consumption that contains both processed products of animal origin and plant products as a main ingredient) from other countries will also be affected from 1st October 2021, as new regulations will be enforced. The regulations will mean that most imported composite products will need both a health certificate and commercial document.
There are also other, more long-term, factors that need to be considered when you are assessing the impact of Brexit on your business; delayed supply chain, changing customer bases and your workforce might affect your business.
Brexit Business Opportunities
Although there are issues you and your business need to prepare for, there might also be positive Brexit business opportunities such as increased enterprise and inward investment.
The EU-UK Trade and Cooperation Agreement came into effect on 1st May 2021, and states that your business will not be expected to pay tariffs if you import or export goods between the UK and the EU. This has opened up more opportunities for UK businesses to continue trading with EU countries.
The government has also introduced incentives for businesses in relation to manufacturing production. In March 2021 the ‘Super-deduction’ was announced, which gives companies investing in qualifying new plant and machinery assets the opportunity to offset 130% of the cost against their tax bill. This announcement could bring investment opportunities for your business as ‘the super-deduction will allow companies to cut their tax bills by up to 25p for every £1 they invest’.
Which businesses will benefit from Brexit?
Due to these Brexit business opportunities, some industries and businesses will benefit more than others, whilst some have already started to see the upswing.
Independent retailers are already reaping the rewards of Brexit business opportunities as there has been an increase in people choosing to shop locally rather than with major retailers. Supporting local and independent manufacturers is also expected to put money back into the British economy and provide more opportunities for UK businesses.
Given the trading requirements and tariffs/lack thereof, the Financial Times has projected that there will be growth in UK investment in both food and advanced manufacturing sectors. As a result, if your business is part of either of these industries, you will most likely benefit from Brexit.
Alongside the food sector, UK breweries and the UK hotel sector are also expected to benefit from Brexit. As bars, restaurants and pubs begin to introduce drinks onto their menus that have been brewed in the UK, there will be a positive impact on UK breweries due to an increase in demands.
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