Brexit becomes official at 11pm on 31st January, 2020, 1318 days since Britain voted narrowly to leave on 23rd June, 2016.
For starters, why 11.00pm?
Well it’s quite simple really, 11pm in the UK is Midnight in Brussels.
What’s the Transition Period?
The transition period will last until 31st December, 2020, and during this time the UK will remain in both the EU Customs Union and the Single Market. That means until the transition period ends a lot of things won’t change – including travelling to and from the EU, freedom of movement and importantly for local businesses, EU-UK trade. So, during this 11-month period, the UK will continue to follow all of the EU’s rules and its trading relationship will remain the same.
What needs to be agreed?
The transition period is meant to give both sides some breathing space while a new free trade agreement is negotiated. This is needed because the UK will leave the single market and customs union at the end of the transition. A free trade agreement allow goods to move around the EU without checks or extra charges. If a new one cannot be agreed in time, then the UK faces the prospect of having to trade with no deal in place. That would mean tariffs (taxes) on UK goods travelling to the EU and other trade barriers.
Aside from trade, many other aspects of the future UK-EU relationship will also need to be decided. For example:
- Law enforcement, data sharing and security
- Aviation standards and safety
- Access to fishing waters
- Supplies of electricity and gas
- Licensing and regulation of medicines
What will change immediately after 31st January?
- MEPs Will lose their seats
- No more EU Summits for British Ministers
- We can start formal trade negotiations with other countries
- Our passports will change colour back to Blue
- We’re getting special commemorative Brexit coins
- The Government Brexit Department is shutting down
- Germany won’t extradite any of it’s citizens suspected of crime to the UK
What will stay the same during transition?
Travel
We can still queue in the areas reserved for EU arrivals and flights, boats and trains will operate as normal.
Driving Licences and Pet Licences
As long as they are still valid, they will continue to be accepted.
EHIC – European Health Insurance Card
These are the cards that provide UK nationals with state-provided medical treatment in case of illness or accident. They can be used in any EU country (as well as Switzerland, Norway, Iceland and Liechtenstein) and will continue to be valid during the transition period.
Pensions
UK nationals living in the EU will continue to receive their state pension and will also receive the annual increase.
Budget contributions
The UK will continue to pay into the EU budget during the transition. This means existing schemes, paid for by EU grants, will continue to be funded.
Trade
UK-EU trade will continue without any extra charges or checks being introduced.
What do I need to think about and prepare for as a local business owner?
Commercial Factors
The value of sterling has already beena ffected by the uncertainty over Brexit, and there may be further impact as time goes on. However, Brexit is only one part of the global landscape and there are many other factors which affect currency rates. If you have international trade and deal in other currencies extensively you may wish to plan ahead:
- Speak with a currency specialist – they are often cheaper than the high street banks and can explain some of the jargon, such as the difference between sell rates and buy rates
- Research rate trends or ask your currency specialist to provide an overview of those trends so you can set your expectations with a realistic budget
- Take advantage of tools to track, target and even fix a prevailing exchange rate in advance with specialist currency tools
Trading Overseas
If you import or export goods and / or services you may be faced with new legislation and adminstrative tasks as time progresses so keep abreast of developments with the negotiations and start to prepare ahead of time. Ensure you have great systems in palce across your business to minimise the impact of changes.
You may also be faced with extra hurdeles when you get to border posts.
In addition, tariff changes and requirements over time will mean that importing and exporting may become more or less desirable in some sectors. Watch out for the latest updates and have a plan in place to combat these changes.
Legal Changes
New UK legislation will likely replace current EU laws and this may lead to a period of uncertainty as these bed in. Ensure you seek great legal advice at all times.
Employment Law
Rules around EU citizens working in the UK and UK citizens working in the EU are likely to be adjusted and those travelling to or from the UK for work may face additional legal and administrative requirements for residence and travel. Keep ahead of the game and up to date on any changes.
Funding
British industry has relied heavily on EU funding and this will stop in time, which means that some sectors will need to seek alternative funding sources. The European Structural and Investment Fund (ESIF) provides England with £5.3 billion of funding. There is still uncertainty over how this will be replaced but the Government is working on the UK Shared Prosperity Fund.
Branding and Trademarks
The current trademark system may change and separate UK and EU trademarks may need to be applied for.
