• Employment1
  • Privateclient1
  • Property2
  • Property4
  • 1
  • 2
  • 3
  • 4

Brexit – EU moves to UK

Please note that the information herein is of a general nature and you should not act or refrain from acting on it without professional advice on the specific facts of your case. No liability is accepted by the author or Sykes Anderson Perry Limited in respect of this article. This is a basic outline only and is intended only as a general guide.

All the talk is of UK businesses and people leaving the UK to relocate in Europe. David Anderson considers the opposite; who is likely to benefit post Brexit from leaving the EU and relocating to the UK? The “harder” the Brexit the more the status quo will be disrupted and the more advance planning will pay off. “Disrupters” in business will also have more opportunities to gain UK market share.

Businesses

  • Because of the current uncertainty the best approach for businesses at the moment is to hedge their bets and have a foot both within the EU and within the UK. The corporate structure should be kept flexible so you can easily restructure once things become clearer. For instance if there is a “hard” Brexit then having your UK company completely separate from your EU business may be best so that there is no corporate group structure linking you to the EU. If there is a “soft” Brexit then a group structure linking you to the EU may be better. Either way you want to be able to move quickly at the right time.

  • You will be better off in the UK if the UK manages to negotiate lower tariffs for the export of goods and services than the EU. Most companies will be focussing on the big markets of the USA, India and China but niche companies with customers in smaller non EU countries (say in Africa) may benefit more. Accordingly if an EU company exports to a country and it thinks the UK will enter into a favourable trade deal with that country, then it could be worthwhile for the EU companies to establish enough of a presence in the UK to become a “UK business” and so be able to take advantage of any new UK trade agreements.

  • The UK government is likely to provide “once in a lifetime” loans and help post Brexit for UK companies seeking to break into or expand their business outside the EU. It is best to have an established UK company if you think you could benefit from this largesse. If there is a hard Brexit the loans will not be available to EU group companies.

  • Big companies which dominate the UK market may be forced to relocate a major part of their operations out of the UK into the EU. This disruption could give smaller companies relocating into the UK a good opportunity to take market share.

  • If the UK – EU relationship breaks down completely and there is an “Ultra-Hard” Brexit (which no one is talking about) trade relationships and exporting to the UK from the EU could in practice become very difficult. Probably best then to be a UK company selling in the UK.

  • VAT changes are likely. The UK has had to follow the European Court’s rulings on VAT. Expect some of these to be changed shortly after Brexit. Consider whether if your business is in the UK it may benefit from any changes. Changes here may be unexpected and aimed at boosting UK business in the immediate aftermath of a hard Exit.

  • There will be fewer restrictions on products in the UK. This means that if you are primarily targeting sales outside the UK and you find the EU rules costly and restrictive you may be able to avoid it by manufacturing and/or selling from the UK.

  • Licensing of products such as medicines will change and it may be easier to deal with the new UK regulator than the EU regulator.

  • It may be worth getting key staff into the UK now. No one knows how work permits will operate post Brexit but getting staff into the UK before Brexit must help.

Individuals

  • Free movement normally follows trade. It is possible that EU type free movement and establishment may start to apply to UK nationals in for instance USA, Canada and Australia. This would be an incentive for any EU citizens to apply for a UK passport now which is the reverse of what most UK nationals are doing who may for instance be entitled to an Irish passport.

  • UK business and professional qualifications may no longer be recognised in the EU but may be recognised in other non-EU countries.

  • Exchange of tax information and enforcement is likely to be more problematic for Revenue Services.

  • If matters deteriorate badly into a hard Brexit, Euro – Sterling currency fluctuations could become more acute. This could become a problem for UK residents if any form of exchange controls is imposed on UK residents.

October 2017
David Anderson, Solicitor
Sykes Anderson Perry Limited