Business Viability and Brexit

Question MarksThe UK will leave the EU single market, Customs Union, and VAT and excise duty area on 31 December. From 1 January 2021, the UK will operate its own external border as a sovereign nation. Is your business ready for the looming deadline of Brexit?  Dealing with Brexit and the ongoing uncertainties about the COVID-19 pandemic, mean businesses and owners are in for a tough ride over the next few months, possibly much longer if the UK continues to face restrictions and possible additional tariffs, supply challenges and economic uncertainty due to Brexit.

Business owners need to make difficult decisions about the future viability of their businesses, which is not easy in the current environment. Those decisions need to be taken carefully in light of directors’ duties to act in the best interest of the company and its creditors as a whole. Directors may decide that there is no longer a viable business and retaining employees, taking on further debt or even continuing the business may no longer be in the company’s best interests. If directors do not act in the best interests of the company and, in particular, its creditors, there is increased risk of personal liability for directors if the financial position of the company deteriorates.

Our brochure contains a number of guides to help navigate these difficult decisions, but the key for all directors is to act now and take advice to minimise the risk of personal liability.

Preparing For Data Privacy Compliance Post Brexit Transition

This is a brexit imageWith still no Withdrawal Agreement in place and eight weeks until the transition period ends, businesses should be planning now to ensure the continuity of EEA-UK data flows. Identifying affected intra-group, customer and vendor arrangements and preparing priority action plans is a crucial first step.

Our guide prepared by Francesca Fellowes, Andrea Ward and Asel Ibraimova provides a checklist, due diligence questions and practical advice to help you navigate the process.

The Impact of Brexit on Contracts

Brexit JigsawBrexit threatens to have a significant impact on all UK businesses when they are importing and exporting goods and services from suppliers in the EU, as well as EU businesses when they are exporting goods and services to the UK.

As such, all businesses (particularly manufacturers and retailers) need to consider the impact of Brexit both as a buyer of goods and services from suppliers in the EU and when they are selling goods and services to customers in the EU.

Our Intellectual Property & Technology Partner, Simon Jones, provides this helpful report detailing important considerations for your business as we approach the Brexit deadline.

Why Data May Prove One of The Hardest Parts of Brexit

Listen to PodcastPersonal data and its transfer over international boundaries hit the news in July 2020, yet again, as the Court of Justice of the EU (CJEU) handed down the Schrems II decision on data transfers reaffirming its strong backing for data protection rights.  In October, a CJEU ruling on UK (as well as French and Belgian) government surveillance regimes further shaped how policy-makers need to evaluate data protection arrangements.  Now Brexit is on the horizon and the international transfer issues surrounding the UK’s exit are becoming a pressing concern for many organisations.

But it remains unclear whether personal data transfers from the EEA to the UK will be able to continue as seamlessly as now post the Brexit transition period without additional measures. Unless the European Commission passes an “adequacy decision” in relation to the UK before 31 December 2020 (or some other form of agreement is reached), then EU/EEA organisations that transfer personal data to UK organisations (or allow them to access the data) will breach the GDPR unless they put additional alternative measures in place to govern those transfers, or a derogation applies. The Commission’s freedom of manoeuvre is constrained by the two CJEU rulings earlier this year.

For any organisation doing business across the Brexit border, there may be significant work to be done to ensure that those data transfers can continue without breaching the GDPR, such as putting EU Standard Contractual Clauses (SCCs) or Binding Corporate Rules into place.

I was recently joined by Neil Ross, Policy Manager for Digital Economy at techUK and Rosa Barcelo, co-chair of our global Data Privacy & Cybersecurity Practice and former Deputy Head of Unit of the Cybersecurity and Digital Privacy Unit of DG CONNECT in the European Commission to explore these issues on our Now & Next podcast

Brexit: UK VAT – No Relief for Cross-border Sellers

VATThe UK will leave the EU VAT area at the end of the Transition period on 31 December 2020. From 1 January 2021, there will be fundamental changes to the VAT treatment of goods arriving into Great Britain.

The changes are intended to ensure that goods imported from EU and non-EU countries are all treated in the same way and that UK producers are not disadvantaged. However, the change means that any business that imports goods from the EU will be significantly impacted.

Robert O’Hare and Tim Jarvis look at the basics and highlight, in particular, some of the implications for direct sellers and online marketplaces (OMP).

UK Freeports – The Tax Angle

On Wednesday 7 October 2020, the UK government published the Response document to the Freeports Consultation that was originally launched in February 2020. With the UK simultaneously negotiating multiple new free trade agreements, freeports could make a significant contribution to making the UK’s post-Brexit economic and trade policy truly global.

The creation of freeports is a flagship policy for the UK government. It touches on so many of the government’s core aims and objectives. At this stage we do not have all the details, however Tim Jarvis and Robert O’Hare look at what we know today from a tax angle and the next steps for freeports.

The UK’s New Points-based Immigration System: Where Are We Now?

Brexit - What Next?

The government has issued updated guidance for employers on the UK’s points-based system, which will apply to new applicants from the EU, the EEA and Switzerland (excluding Ireland), as well as those from outside the EU, from January 2021. Unfortunately, the updated guidance does not tell us much more than we already knew from the July 2020 policy statement – employers are still waiting for the finer detail of the scheme in the form of comprehensive policy guidance and changes to the Immigration Rules. In the meantime, what do we know so far? What do the changes to the points-based system mean in practice and how should employers prepare?

Annabel Mace and Supinder Sian look at what this means in practice and how affected companies should prepare. You can also sign up for our 12 October 2020 event on this topic here.

How Will Changes To The Chemical Regulation EU REACH Affect Your Compliance Obligations In The UK and EU After The Transition Period?

Barrrels in a factory.

At the end of the transitional period, on 31 December 2020, the chemical regulation EU REACH will cease to apply in the UK. This will automatically invalidate EU REACH registrations and authorisations held by UK companies. A stand-alone UK chemical regulation UK REACH will replace EU REACH in the UK.

Anita Lloyd and Dave Gordon look at what this means in practice and how affected companies should prepare.

Brexit and Subsidies Control

Brexit JigsawEU state aid law is a cornerstone of EU competition law and policy. It helps preserve a level playing field between companies competing in the internal market. Crucially, it operates only within the EU. Thus, EU state aid rules do not apply to financial support granted by non-EU authorities to companies in the EU, or to companies outside the EU but with activities in the EU. The exception to this rule is the UK, but not for long.

The UK exited the EU membership earlier this year, subject to a transition period ending on 1 January 2021. During this transition period, the UK remains subject to EU state aid rules. Even after the end of the transition period, as things currently stand, the UK could continue to be subject to EU state aid rules:

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Brexit – A Huge Change Coming

Having formally left the EU on 31 January, we are now into the home straight of the next lap of the Brexit process: defining the new relationship with the EU.

Things are getting heated.  Both sides are accusing the other of bad faith, and the UK Government is threatening to pass controversial legislation which would give it power to over-ride elements of the deal already done – the Withdrawal Agreement (an international treaty entered into by the Government less than a year ago).

Negotiations resumed on 28 September.  Many issues remain to be resolved, but two key stumbling blocks remain: how far the UK’s state aid policy might diverge from the EU, and the extent to which the UK will allow the EU fishing fleet access to UK waters.

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