On Friday 24th January, the heads of the European Commission and Council – Ursula von der Leyen and Charles Michel – signed the Withdrawal Agreement, ahead of the UK’s exit from the EU on 31st January. As of 29thJanuary, Members of the European Parliament ratified the Brexit Withdrawal Agreement by 621 votes to 49. These are the final acts that will result in the end of the UK’s 46-year membership of the European Union.
What Happens Now?
Following the departure, the UK has agreed to abide by EU rules during a transition period until the end of this year. During 2020, the UK and EU will negotiate the terms of their future relationship covering predominantly trade relations, but also a myriad of other future arrangements ‒ from fishing policy to air traffic control.
Despite the mammoth negotiations ahead, the UK government is taking a firm line that there will be no extension of the transition period and that all negotiations must be completed by 31st December, 2020, which still leaves a degree of uncertainty and the threat of a no-deal Brexit looming in the background ‒ especially with senior EU figures being doubtful of such a tight timetable to negotiate future relations.
Concerns for Business and the Economy
A particular area of concern for businesses is to what degree there will be alignment with the EU. As a member of the EU, free trade was possible due to regulatory alignment, effectively creating a level playing field for all businesses within all industries.
In an interview with the Financial Times, the Chancellor of the Exchequer, Sajid Javid, delivered a tough message to UK businesses looking for close relations with EU systems, structures and rules, telling them that “there will not be alignment; we will not be a rule taker; we will not be in the Single Market; and we will not be in the Customs Union — and we will do this by the end of the year.” He made it clear that there could be no prospect of Treasury support for big manufacturing sectors ‒ which include cars, aerospace, pharmaceuticals and food and drink ‒ that favour alignment with EU regulations. Mr Javid urged companies to “adjust” to the new reality.
The UK car industry responded by warning that splitting from European regulations will cost billions of pounds and damage British manufacturing and consumer choice. The Food and Drink Federation said that the proposals were likely to cause food prices to rise later in the year. The CBI argued that, for many firms, keeping existing EU rules would secure jobs within many sectors.
EU Nationals Already Living in the UK
The position for EU nationals, and their family members, already living in the UK is unchanged. People who have lived in the UK for the last five years can apply for Settled Status, and those with less than five years residence can apply for Pre-Settled Status.
The deadline for these applications to be made is unchanged by the recent extension, and while it could be changed in the future, our recommendation is that clients apply as soon as possible and certainly before:
- 30th December, 2020 if there is a no deal Brexit
- 30th June, 2021 if there is a deal
People Entering the UK Before and Up to Brexit Day (31st January, 2020)
Any EU national, and their family members, entering the UK between now and Brexit day will also qualify for Pre-Settled Status, and will eventually become eligible for Settled Status after they have lived in the UK for five years.
For businesses, this means that EU nationals that have recently been recruited will be able to remain long term.
People Entering the UK After Brexit Day but Before 30th December, 2020
The position for EU nationals, and their family members, entering the UK after the UK leaves the EU but before 30th December, 2020, will be dictated by whether or not there is a deal.
In the event that the UK leaves the EU with a deal, this period of time will be used as an implementation period and the current rules will continue to operate. This means that any EU national who enters the UK during this period will be eligible for Pre-Settled Status and can eventually obtain a right to live in the UK permanently.
In the event that there is no deal, EU nationals will still be able to enter the UK using their passport and begin work but should apply for Temporary Leave to Remain, if they intend to stay for more than three months. Employers have been told they will only need to check EU national’s passports for Right to Work Checks during this time, but they need to be aware new entrants will only be allowed to stay for a maximum of three years before qualifying for a different visa.
In the no-deal scenario, recruitment could become harder as there will be no guarantee about an individual’s right to live in the UK for more than three years.
Post December 2020
The UK is still considering what a future immigration system will look like; although recent suggestions of a Points Based System offer some encouragement for employers.
Suppliers and Household Goods
What Does This Mean for the Transportation of Goods?
Whether transporting goods solely in the EU, UK, between the two or between the UK and another non-EU country, it will be imperative to have the proper documents ready and follow the right steps.
In the Case of a No-Deal Brexit
If the UK leaves the EU without a deal, commercial drivers and hauliers will need to have the correct documentation to travel to, from or through the EU. Similarly, drivers will need to have the right documents in-hand for journeys between the UK and the Republic of Ireland. Find out exactly what documents and licenses are necessary in this eBook from the UK government.
Overall, the main needs to be aware of in the case that the UK leaves with a no-deal Brexit are:
- New customs and other SPS documents from the exporter for goods to cross into the EU
- Goods leaving the UK must have an export declaration that will determine if they will receive their P2P (permission to progress)
What Should Employers Do Now?
It would be easy for businesses to choose to wait and see what happens over the coming months before taking action, but that could very well be a mistake. Because the deadlines for existing employees to register are unlikely to change, employers should be using this time to focus on procedures to encourage and monitor registration, in order to protect against any employees becoming illegal workers. Businesses also may wish to consider if they should accelerate recruitment of EU nationals to protect against the potential for a no-deal Brexit.
While the months of wrangling that typified 2019 have now come to an end, there is still much uncertainty as to where UK-based businesses will find themselves in 2021 and beyond, and the impact this will have on the UK economy in general. As bills are passed and agreements are made, Altair Global is dedicated to keeping our clients, customers and supplier partners up to date on the latest Brexit information and its impact on global mobility.
Contact your Altair Global representative for more information.
Altair Global (‘Altair’) has provided this information as a service and convenience for your information only. It is not intended to replace your own legal or financial guidance and/or assistance and you are encouraged to seek the advice of your own tax and legal advisor. Further, the information contained herein is to our knowledge accurate to the extent of the data available to Altair as of the date identified. Altair does not assume responsibility for the accuracy of the contents hereof and is under no obligation to update the material contained herein.