Frequently Asked Questions about Brexit for Business

Find answers to the most pressing questions you have about the UK’s exit from the EU and how it could impact your business.

These FAQs were last updated in December 2020 and will be amended in early January 2021.

This is an uncertain time for businesses, so we’ve compiled common queries raised by our business customers into a series of FAQs and tried to detail clear answers and links to more information where relevant.

The questions cover general enquiries, business strategy, operations and business practices, supply chain management, financing and investments. If you have a question not covered here, please speak to your Relationship Manager or Business Relationship Team.

We have signed the Governments’ SME Finance Charter to demonstrate our ongoing support to SMEs through Brexit and beyond. Read the charter to find out more.

Not a business? If you’re a personal customer take a look at our personal Brexit FAQs for the most frequently asked questions on our products and services relating to Brexit.

General FAQs

1. I don’t trade with Europe, so Brexit won’t affect me, will it?

Even if you don’t trade with suppliers or customers in the EU, or countries in the European Economic Area (EEA), you may experience the knock-on effects of any new rules for living, working, travelling and doing business in the UK and EU that affect your suppliers and customers. Your employees are also likely to be affected if they are from the EU. 

Checks will be needed on goods crossing the Irish Sea between Northern Ireland and Great Britain, which businesses will need to be prepared for.

You may want to review your supply chain and your customer base, identify any risks and take steps, wherever possible, to mitigate them. You might want to make more use of domestic suppliers, for example.

Whatever your current trade arrangements, review your business strategy in light of Brexit and consider any opportunities there may be in terms of international trade beyond Europe. 

You may also want to reassure your EU workers that they are welcome and that they will be able to apply for ‘settled status’ under the EU Settlement Scheme.

To find out more about opportunities for international trade, visit Bank of Scotland’s International Trade Portal

Also see the Scottish Government’s guide: Get exporting help and support

To keep up to date on any new regulations coming in 2021, visit the transition period section of GOV.UK

2. What is the new UK Global Tariff and what will it mean for my business?

In May 2020, the UK Government announced a new UK Global Tariff (UKGT) which will replace the EU’s Common External Tariff from 1 January 2021.

It is described as a ‘simpler, easier to use and lower tariff regime’ and is aimed at scrapping red tape and reducing cost pressures, to help UK businesses compete in terms of global trade. It will be in pounds rather than euros.

Key features of the UKGT include:

  • Removing the Meursing  table, which is currently used to determine which tariff code, and therefore how much duty, is applicable to goods when importing them. This will allow the UK to scrap tariff variations on various products including biscuits, pizzas and confectionary.
  • Eliminating tariffs on a wide range of products, including products such as copper alloy tubes and screws and bolts which are used in UK production, cutting costs to businesses and consumers.
  • Maintaining tariffs on a number of products backing key UK industries, including agriculture, automotive and fishing, in a bid to support UK businesses.

See more about the UKGT

Use the UK Global Tariff tool to check the tariff that will apply from 1 January 2021 on goods you plan to import.

3. How will business travel to Europe be affected by Brexit?

Rules around travel will change from 1 January 2021 and you’ll need at least six months left on your passport to travel to most EEA countries.

You also may need a visa for longer trips or business travel. 

Check each country’s travel advice page for more information.

You may also need extra documents or an international driving permit to drive overseas from January 2021.

If you are going to provide professional services like legal services on your trip, you’ll need to check that your qualifications are recognised.

See Government guidance on travelling to Europe from January 2021 and check the additional requirements for business travel.

New style passports started being issued from March 2020, although the process will be phased. If you have an existing passport that has ‘European Union’ printed on the cover, you’ll be able to continue using it until it expires.

See information on passport rules post-Brexit

4. If we go to WTO rules what does this mean for my imports and exports?

If the UK and EU are unable to reach an agreement on trade at the end of the transition period on 31 December 2020, World Trade Organisation (WTO) rules will apply to trade between the UK and EU. These rules are complex - but at their simplest they set out that nations must apply the same tariffs on goods and services to all countries that they trade with under WTO rules.

For importers and exporters, this could mean costs will go up as imports and exports to the EU will no longer be tariff-free. 

However, the UK could choose to lower tariffs (potentially to zero), which could present opportunities for businesses. The UK could also enter into agreements that give developing countries preferential access to our markets. Again, this could open up opportunities. 

Another issue to consider is non-tariff barriers – these are things like safety regulations and product standards. If the UK and the EU can’t agree a system for recognising product standards, this is likely to mean more checks at the border.

Scottish Enterprise has export advisers who can help your business grow in EU markets and beyond. They can also help you with your Brexit planning exporting questions.

5. What effect will Brexit have on cards and payments?

While it is not yet known what agreements on financial services will be reached during the transition negotiations, the European Payments Council (EPC) has confirmed that even in a ‘no deal’ scenario, the UK will maintain participation in the SEPA geographic scope after 31 December 2020. There would, however, be some extra rules made applicable to transactions e.g. extra transaction details will need to be provided.

You can get help to manage your payments efficiently with  Bank of Scotland Payment Services

6. Will the same GDPR regulations still apply at the end of the transition period?

The General Data Protection Regulation, which came into force in May 2018, is an EU regulation so technically will no longer apply to the UK after 31 December 2020. However, the Government has announced plans to incorporate GDPR into UK data protection law, so in reality there’ll be little change.

The EU version of GDPR will still cover companies that operate in the EU or have EU residents as customers. 

You can find more information on the flow of data in the event of a no-deal Brexit from the Information Commissioner’s Office (ICO).

2 Business Practices and sectors

1. Which sectors are most likely to be affected by Brexit? And will the impact on the service sector be different from that on manufacturers?

Businesses that trade heavily in goods or services with the EU, that are heavily regulated, or that employ substantial numbers of staff from the EU are likely to feel the most significant impact of any regulatory changes introduced after 31 December 2020. 

These are thought to include agriculture, financial services, food and drink, automotive and chemical engineering - however any impact will depend on an organisation’s own circumstances.

Scottish Enterprise’s PrepareforBrexit.scot website has a free self-assessment tool to help you understand potential impacts on your business.

See PrepareforBrexit.scot’s step-by-step guide and help site

Understand tariffs and how they work

2. What is a UK Economic Operator Registration and Identification number and will I have to register for one?

An Economic Operator Registration and Identification, or EORI, number is a unique ID code required by businesses that trade goods with countries outside the EU.

In the UK, an EORI number is allocated to an importer or exporter by HMRC. It provides information to customs authorities as part of EU security measures on shipments.

From 1 January 2021 you’ll need an EORI number starting with GB to trade outside of the UK, including with EU countries. This does not apply if you are trading between Northern Ireland and the Republic of Ireland. If you already have an EORI number you’ll be able to continue using it. If you move goods to or from Northern Ireland you’ll also need an EORI number that starts with XI, in addition to your GB number.

You won’t need an EORI number if you only provide services.

You can apply for an EORI number online at GOV.UK

3. I import and/or export goods from/to the EU – what new rules will I have to follow?

The UK Government has issued guidance on new rules businesses in the UK importing or exporting goods from and to the EU will have to follow from January 2021.

Businesses trading with the EU will need to make custom declarations as they do when trading with the rest of the world. You’ll also need an EORI number starting with GB.

Find out how to make customs declarations

Get an EORI number

From January 2021, businesses will also need to pay custom duties and VAT on all imported goods.

Check customs duty rates from January 2021

Check VAT rates on imported goods

Importing and exporting certain goods may also require a special licence or certificate, or you may need to pay an inspection fee before goods are allowed into the UK.

See more about import licences, certificates and inspection fees

See more about export licences and certificates

From January 2021, you will be able to charge customers 0% VAT on goods you export to the EU

See if you can charge 0% VAT

The Government has also issued updated guidance on how the GB-EU border will operate after the end of the transition period.

The changes will be implemented in three stages leading up to 1 July 2021. 

See the new Border Operating Model

4. I trade goods in/out of Northern Ireland – what new rules will I have to follow from 1 January 2021?

The Northern Ireland Protocol comes into force on 1 January 2021 and will introduce changes to the way goods move between Great Britain and Northern Ireland.

The UK Government has launched a free Trade Support Service which can help businesses moving goods between Great Britain and Northern Ireland, or bringing goods into Northern Ireland from outside the UK by raising declarations on their behalf. If you trade with Northern Ireland you’ll need an EORI number that starts with XI.

Sign up to the Trader Support Service

5. How will employment rules change for UK-based EU citizens after 31 December 2020?

Around 3.6 million non-UK EU nationals live in the UK. Those already working in the UK can apply for ‘settled status’ to remain indefinitely if they’ve been here for five years.

Those who have been in the UK for less than five years can apply for pre-settled status, and qualify for full settled status once they’ve lived in the UK for five years.

The deadline for applications to the EU Settlement Scheme is 30 June 2021.

From 1 January 2021, a new points-based immigration system will apply. To apply for a skilled worker visa, applicants will have to prove they have a job offer for a position at a required skill level, from an approved employer sponsor. They’ll also need to be able to speak English and earn a minimum salary.

There won’t be an immigration route for lower skilled workers, although the seasonal agricultural visa pilot scheme will be extended.

You’ll need to check employees’ rights to work in the same way you do now until 30 June 2021. This can involve checking their passport or national identity card, using the online right to work checking service or checking an approved immigration status document.

To avoid the risk of discrimination, you can’t ask job applicants to show their EU settlement scheme status until after 30 June 2021.

Learn more about the new points-based immigration scheme

Apply to be an approved employer sponsor

For more information see: EU citizens living in Scotland after Brexit and the EU Settlement Scheme: employer toolkit

6. How should my business tackle any regulatory changes as a result of Brexit?

It’s important that all businesses take steps to prepare for how any future regulatory changes as a result of Brexit will affect them.

The first step is to consider how exposed you are to any risks associated with changes after the transition period. Look at the possible impact on your supply chain, exports, customers and customer demand, stakeholders and workforce. At the same time, explore any opportunities Brexit presents, including to further trade with countries outside of the EU.

The British Chambers of Commerce has put together a Post-Transition Brexit checklist highlighting key areas to consider, including future staffing requirements and any potential delays at borders. This can help you put in place measures to mitigate the risks, ensuring you have the skills needed, the correct customs documentation and provisions to cope with currency volatility.

The Government has launched an interactive tool to help businesses assess if they are ready for new rules and regulations in 2021.

Scottish businesses can also get help from Scottish Enterprise’s PrepareforBrexit.scot website.

7. Who do I need on a business task force to help navigate the first few months of new regulations?

In the same way you would plan for a major incident or takeover, you should consider establishing a core team to manage your Brexit strategy. This team will help you navigate the first few months of new regulations in 2021.

According to the CBI, 82% of large businesses – and a third of firms overall – have set up an internal Brexit task force or steering group to project-manage preparations.

To be most effective, your task force should be made up of representatives from key functions across your business, not just senior management. This includes people who deal with the supply chain, procurement, marketing, sales, governance, HR and financial planning.

Smaller companies that don’t have as many resources may wish to bring on board experts from legal firms and business associations to help them gain a greater understanding of what Brexit means for them.

8. What are the HR and employee issues I need to plan and prepare for?

It’s unlikely that there will be immediate changes to employment law as a result of Brexit. Much of the regulation is enshrined in domestic law, and powers from EU Regulations have been brought under UK law in the EU Withdrawal Act.

However, businesses that employ EU nationals will need to understand the implications of Brexit for workers. 

EU workers who are resident in the UK can apply for ‘settled status’ after five years under the EU Settlement Scheme or ‘pre-settled status’ beforehand. The Government has produced a toolkit that employers can use to communicate the scheme to employees. 

See the EU Settlement Scheme Employer Toolkit on GOV.SCOT

See advice for EU citizens living in Scotland after Brexit

From 1 January 2021, it is intended that a new points-based immigration system will apply. To apply for a skilled worker visa, applicants will have to prove they have a job offer for a position at a required skill level, from an approved employer sponsor. They’ll also need to be able to speak English and earn a minimum salary. It’s advisable that employers wanting to hire from the EU apply to be an approved employer sponsor as soon as possible.

Apply to be an approved employer sponsor

It’s important to note that, despite changing rules around living and working in the UK, businesses will need to continue to check employees’ right to work in the same way you do now until 30 June 2021. This can involve checking new hires’ passports or national identity cards, using the online right to work checking service or checking an approved immigration status document.

To avoid the risk of discrimination, you can’t ask job applicants to show their EU settlement scheme status until after 30 June 2021.

Learn more about the new points-based immigration scheme

9. My business is with the public sector. What impact is Brexit likely to have on my market?

From January 2021, a new e-notification service called Find a Tender will be used to post and view public sector procurement notices. This will replace the requirement to publish notices in the Official Journal of the European Union.

Under the Government Procurement Agreement (GPA), businesses from other GPA countries will be able to bid for certain procurement opportunities in the UK, but UK businesses will also be able to bid for work in their territories.

See more about procurement under GPA.

According to Deloitte, public sector bodies are likely to be affected by any tariffs on goods in the same way as private sector bodies. 

Another impact they are likely to feel is in staffing – there has already been a steep decline in EU applications for nursing positions, for example. These potential issues may have knock-on effects for companies that do business with the public sector.

3 Business Strategy

1. Which export markets are most likely to look favourably on the UK after Brexit?

The EU and countries with which the EU has free trade agreements currently account for 56% of UK exports. However, exports to the US rose by more than 26% between 2011 and 2016.

As of October 2020 the UK had secured 19 ‘continuity’ deals covering 50 countries or territories. These include an agreement with the Southern African Customs Union (SACU) and Mozambique and agreements with Morocco, Georgia, Switzerland and Central America.

In September 2020, the UK reached a new trade agreement in principle with Japan which will mean 99% of UK exports to Japan will be free of tariffs.

The UK has also signed mutual recognition agreements with the US, Australia and New Zealand, that replicate current EU agreements which mean that each country will recognise each other’s conformity assessments.

In December, the UK signed trade agreements with Singapore and Mexico.

Trade negotiations with a number of countries including Canada and Turkey are ongoing.

See more about the UK’s existing trade agreements

Looking for exporting opportunities? See the Bank of Scotland International Trade portal

See the Scottish Government guide: Get exporting help and support

2. What can I do to protect my business from Brexit?

The first step you may want to take – if you haven’t already done so – is to carry out a Brexit risk assessment to see if your business has any vulnerabilities. This may also uncover opportunities for your business.

Areas to look at include impacts on importing and exporting, your supply chain, taxation, regulation, and your employees. 

The British Chambers of Commerce has a Post-Transition Brexit checklist highlighting areas to consider.

You can then do whatever is possible to mitigate risks: for example, ensuring all your customs documentation is in order, making adjustments to your supply chain, and doing what you can to retain your EU employees.

You could also consider exploring alternative banking solutions if we are unable to provide you with the banking products or services. You will already have been contacted if this is the case.

The Government has launched an interactive tool to help businesses assess if they are ready for new rules coming in 2020.

See the UK Government’s transition check tool

Scottish Enterprise has launched the PrepareforBrexit.scot website where you can input specific information about your business to get a tailored response on how to prepare. You may also be able to get a grant to help you with planning.

See the PrepareforBrexit.scot website

3. The European Regional Development Fund has invested heavily in the UK, what is going to happen now?

Under the Withdrawal Agreement, the UK will continue to participate in programmes financed by the current EU budget until their closure.

According to the Government, this means the majority of programmes will continue to receive funding across their lifetime, in many cases, even after 31 December 2020.

4 Supply Chain

1. How can I minimise delays when supplying goods?

The UK Government has confirmed plans to introduce import controls on EU goods at the border from 1 January 2021. Traders in the UK and the EU will have to submit customs declarations and be liable to goods checks.

The EU has also said it will enforce checks on UK goods entering the Single Market.

It’s worth getting in contact with the organisation that moves your goods to find out what information they’ll need to make declarations for goods on your behalf, or if you’ll need to make them yourself.

See UK Government guidance on import, exports and customs for businesses

Get an EORI number

See the Government’s new Border Operating Model

2. Will my business still have to meet EU safety standards for goods?

To be sold on the EU market, many products have to meet safety standards set out in EU regulations. The CE mark is used on certain goods to show that they meet these standards. 

CE marking will continue to be required for products being sold in the EU.

From January 2021, products sold in Great Britain will need to feature the new UKCA (UK Conformity Assessed) marking.

The technical requirements products must meet – and the conformity assessment processes and standards that can be used to demonstrate conformity – will be largely the same as they are now.

See more about using the UKCA marking

5 Finance and Investments

1. What will be the likely impact of Brexit on cross-border mergers and acquisitions for businesses?

Levels of merger and acquisition (M&A) activity are difficult to predict. On the one hand, possible divergence between the UK and the EU around anti-trust laws, potentially separate competition supervisory bodies to be cleared, and generally volatile markets, are all likely to decrease activity.

However, currency fluctuations (notably a weaker pound) and the desire by businesses to establish new geographical bases could see a rise in tactical M&A activity. Share price volatility can also trigger opportunities for some aggressive bids.

Due diligence is expected to take longer post Brexit, and if an agreement cannot be reached between the UK and the EU on aligning competition regulation and anti-trust legislation, mergers and acquisitions could be subject to parallel processes.

Corporate restructuring within a group of companies that crosses borders is expected to become more complex too.

2. What support is available from Bank of Scotland to help businesses with Brexit?

You can talk to your Relationship Manager or Business Relationship Team for support around financial planning.

For support widening trade beyond the EU you can make use of a range of resources on our International Trade Portal.

While all reasonable care has been taken to ensure that the information provided is correct, no liability is accepted by Bank of Scotland for any loss or damage caused to any person relying on any statement or omission. This is for information only and should not be relied upon as offering advice for any set of circumstances.  Specific advice should always be sought in each instance.