‘No deal’ Brexit Government guidance explained

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August was a month of great uncertainty, with the release of the Government’s ‘No Deal’ Brexit guidance, many businesses have begun to ask questions which have received few satisfying answers.

Fortunately, the MIA’s Business Helpline Partner, Croner are here to provide some clarity on Brexit preparations.

The government recently released guidance on what would happen if the UK and the EU were unable to come to an agreement before March 2019. The document released is entitled “Workplace rights if there’s no Brexit deal” and sets out the position for employees and employers on employment rights post-March 2019.

If there is no deal after 29 March 2019, the guidance states that all current employment rights will continue to exist after being copied into UK law by the EU (Withdrawal) Act 2018. Where current employment law exceeds EU law, including areas such as holiday rights, this will also continue to exist. Finally, there will be some small changes to the language of employment legislation to reflect that the UK will no longer be an EU country.

Areas to watch:

  • Employer insolvency

Currently, workers who work for a UK-based company are entitled to claim redundancy related payments from the government when their employer goes insolvent. Rest assured, this scheme will still protect all UK, EU and non-EU employees working in the UK.

However, in a no-deal Brexit scenario there may be implications for employees who are working in an EU country for a UK employer. This is due to the fact that the scheme established in the EU country may not continue to apply to UK employers.

  • European Works Councils

Organisations with workforces in two or more Member States may have their employees’ request an EWC to be set up to represent their discussions on trans-national issues.
In the event of a ‘no deal’ Brexit, the UK would have to set up a separate agreement with the EU regarding EWCs. This will have an impact on previous EWC agreements and any future requests to set up councils.

In the interim, UK regulations will be amended to prevent new requests to set up an EWC and continue the provisions that apply to existing Councils.

  • Recruitment

The UK, in the event of a ‘no deal’ Brexit, will cease to have access to the European Single Market for trade purposes. Meaning all businesses will be required to submit customs declarations on all EU trade.

Also, it may be necessary to create recruitment plans for the employment of customs brokers or engage logistics and freight staff.

Practical

  1. Depending on your business, you should consider creating a recruitment plan for new employees, particularly for roles such as customs brokers, who might be needed to continue with business operations.Alternatively, do you have a current member of staff who could be trained to undertake new responsibilities?To reduce drops in morale due to uncertainty, as well as any confusion, continue internal communications with employees throughout this period.
  2.  If you have any EU workers, remind them of the need to apply for settled or pre-settled status before the 30th June 2021 deadline (The EU Settlement Scheme is due to be fully open by 30th March 2019.)
  3. Aim to improve retention and internal development of current staff as much as possible to avoid facing recruitment difficulties if a skilled member of staff leaves suddenly.
  4. A ‘no deal’ Brexit is filled with uncertainty, staying up-to-date with potential changes to worker rights going forwards will help you stay informed and compliant – any breach, however small, could prove costly.

Expert Support

MIA members benefit from FREE advice from Croner.  Email alice@mia.org.uk or call 01403 800500 for the exclusive Business Support Helpline scheme number.

Also helpful for your business…

iNews has published the following guidance on VAT:

“In a no-deal Brexit, the Government will introduce a new payment system so that instead of paying VAT when EU exports reach the UK, businesses will be able to postpone payment until they complete their VAT return. Citing “equality of treatment”, similar rules will apply to non-EU imports.

While businesses are likely to welcome the measure to ease cash-flow, consumers will be less happy. Virtually all goods posted to consumers by foreign businesses, whether from the EU or elsewhere, will be charged VAT – the £15 minimum exemption from non-EU countries will be scrapped.

Foreign businesses might also decide against trading with the UK because a new system will compel them to register with the UK authorities and to collect VAT on parcels worth up to £135 on behalf of HMRC. “

The MIA will, of course, continue to keep you updated with any developments which may impact our industry, and we will naturally lobby as required for the future of our industry.

Alice Monk, and Anthony Short (President of the MIA) are attending a range of industry meetings about Brexit, if you have any specific questions, email alice@mia.org.uk and she’ll see if she can help.