10 Steps for Businesses to Prepare for a No Deal Brexit

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With Brexit playing out in Parliament before us and the question of deal or no deal looming, it pays to be prepared no matter what the outcome. Here are 10 steps that you can take to prepare for a no deal Brexit.

1. Check your website, domains and technology providers – do you use services hosted in Europe?

If your business has a presence online (which most do these days and most probably you do if you are reading this post) or uses services or web platforms that are hosted in Europe, then you should get in touch with your service-providers to enquire about their continuity of service in the event of a no deal Brexit. It would be prudent also to review the terms of any ongoing agreement you have with them. If you would like us to review your ongoing agreements, please contact us today.

If your business has a registered .eu domain, you can read guidance on what to do here: https://www.gov.uk/guidance/eu-domain-names-what-you-need-to-do-to-get-ready-for-brexit

2. Review your Intellectual Property rights

Businesses should check that any registered IP rights continue to be valid and protected in UK and in respect of any unregistered rights that they are suitably protected. This will be particularly relevant to those businesses doing business in both UK and on the continent.

3. Check your employees’ ability to work and live in Europe, if your firm has an EU presence

Businesses should check the nationality of its workers. In respect of any branches in EU, you should check that you employees are already registered with the relevant member state where they are based. Whilst the UK has been committed to allow EU citizens to continue to remain, member states to date have not adopted any such no deal legislation to allow UK citizens to continue to work in EU for a transitional period. For more information on this please see: https://ec.europa.eu/info/brexit/brexit-preparedness/citizens-rights_en .

Any new employees coming to work in UK after a no deal Brexit in the absence of transitional legislation implemented by the EU, will be considered third country nationals and will need to get the right permits to enter stay and work for you. Information will be made available by the national authority relevant to the employee.

You should also contact the relevant EU social security institution to check if your employee needs to start paying social security contributions in their home country as well as the UK. You can see information on this here: https://www.gov.uk/guidance/social-security-contributions-for-uk-and-eu-workers-if-the-uk-leaves-the-eu-with-no-deal .

4. If you do cross-border work, check whether your staff need a visa

Both the UK and EU have announced that they will adopt visa exemptions for short term tourism and business visits. The length of visit is to be determined. If your business involves you or members of staff travelling to UK or EU it is worth thinking about the length and purpose of such visits and if there will be any special circumstances or dispensations.

5. Check your contracts on goods or services received by your firm – will suppliers be affected by a no-deal Brexit?

Check your supply contract terms and whether Brexit could cause disruption or delay to the performance of these contracts, and if likely, whether your contracts contain any force majure clauses or clauses in respect of how to deal with significant delay.

6. Check your VAT invoicing – a no-deal Brexit would change the VAT treatment of business to consumer supplies

Business should check the origins of their customers and location of supply of services with regards to VAT treatment as a no deal Brexit would likely change the VAT treatment of B2C supplies to customers located in EEA. Such supplies would be taken outside the scope of VAT rather than be subject to full VAT as present. The B2B regime will still continue with a reverse charge on the recipient where supplied as at present.

7. Check jurisdiction points in court proceedings for any pending action

If you have any pending or ongoing litigation in another member state, you should check whether such disputes need to be dealt with differently or whether cases need to be filed in more than one jurisdiction.

8. Check your accreditation requirements and rights to offer services

Some businesses such as professional service providers may require certain accreditation to offer its services. If this applies to you, you should check with each particular member state where you provide services whether there are any requirements for you to become further accredited in order to continue to provide your services.

9. Check your business model to make sure it’s fit for purpose if your firm has operations in the EU/EFTA

If you have a business model where your supply chain is across different member states, you should review your supply chain process to ensure that your model is still viable. For example, considering the impact on your model in the event of an introduction of tariffs or introduction of new national laws, or whether national rules would allow your business to be structured in the way it is in respect of group structures company registration and filing requirements and taxation.

10. Check your data transfers – appoint someone to take responsibility for data protection, and review the data flows and transfer mechanisms in your firm

GDPR has been enforceable in UK since 25 May 2018. Any business operating in the EU including in UK should ensure that it is fully compliant with GDPR. You can see our previous post on GDPR compliance here .

Summary

In summary, the uncertainty around Brexit remains, although it appears that both sides are moving towards an exit from the EU, whether with or without a deal. No matter what happens, it is prudent for businesses to take this opportunity to review their business models and processes to identify key areas that may be effected by Brexit so that these issues can be factored in when assessing your business objectives. If there is anything in these 10 steps that you would like to know more about, or if you have contracts in place, or disputes, likely to be effected by Brexit then please do not hesitate to contact us and we can assist you to make any upcoming necessary transition as seamless as possible.

If you would like us to review your ongoing agreements, please contact us today.

This information is in no way to be taken as legal advice or tax advice. It is for information purposes only and is in no way to be relied upon. You should always seek the appropriate professional legal advice before attempting to act on any of the information given here.

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