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Brexit for SMEs

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. Law is a complex subject and the above is a basic outline only and is intended only as a general guide. Nothing herein should be construed as an opinion on Brexit.

Here are a few practical scenarios for SMEs in the run up to Brexit.

X Limited

X Limited, based in UK, provides support for business exhibitors in France and Benelux. X Limited sets up the electronic displays on exhibition stands and provides the panel sets and graphics for the stands. The panel sets and graphics are produced in the UK and X Limited has UK based personnel who drive in a large van to the various exhibition centres in Europe.

The Brexit issues for X Limited are as follows:

  • Free movement of the panel sets into EU.
  • VAT on import of the panel sets into the EU and possible reclaim once they are taken back to UK after the exhibitions.
  • Can their UK based employees work at the European exhibition centres?
  • Qualifications of employees to deal with the electrics on the stands. Will their UK electrician certificates still allow them to do this work? Will their insurance cover still be valid if there is a personal injury?

Solutions are to:

  • Stop doing business in the EU and concentrate on UK exhibitions.
  • Set up a company in the EU and transfer the EU business to it.
  • Relocate installation employees to EU.
  • Enter into a joint venture with a company in the EU.

Y Limited

Y Limited based in the UK helps with the sale of merchandise in EU produced by handicapped people. It is in receipt of an EU grant which makes the business viable.

The Brexit issues for Y Limited are:

  • Free movement of goods into the EU.
  • Will EU continue making a grant to a non EU company after Brexit?

Solution:

  • Very likely Y Limited will have to relocate to within the EU.

Z Limited

Z Limited provides personnel who work on short assignments involving bank security in a few EU countries. Its staff all have the necessary UK accreditation to work in the security industry. The issue post Brexit is whether this security accreditation will continue to be acceptable in the EU. Also whether the staff will be able freely to work in the EU.

August 2018
David Anderson
Solicitor-Advocate and Chartered Tax Adviser