October 29, 2020

Brexit: Keep Calm and Carry On

As we close in on the end of the transition period following the U.K.’s vote to leave the European Union, there are a number of questions about the principal implications as of January 1, 2021. While some uncertainty remains as the final details continue to be sorted out, a key thing to keep in mind is there is no need for panic.

Admittedly somewhat overshadowed by the Covid-19 pandemic, organizations in Europe and the U.K. have been preparing for Brexit for some time and have made significant progress – business will continue and the U.K. won’t fall off a cliff on December 31.

Here are a few of the key areas that will change:

Freedom of Movement

Keep Calm and Carry OnWhile the U.K. was a member of the EU, European citizens had the right to enter, live and work in the U.K. without a work permit. The same was true for any U.K. citizen wishing to enter, live and work in any European Union member state. As of January 1, European Union citizens will need to meet the appropriate criteria to obtain a work permit in order to work in the U.K., and vice versa.

Tariff-Free Trade

British companies had tariff-free access to European markets and vice versa while the U.K. was a member of the EU. A trade deal is in negotiation, but the prospects remain uncertain right now. If the U.K. and the EU are not able to reach an agreement, the future trading relationship may be based on World Trade Organization (WTO) terms, meaning that international tariffs will apply to the import and export of goods and services.

For the movement of household goods, we anticipate that there could be longer transit times and cost increases, as new customs procedures at ports take time to embed.

Primary Implications for Global Mobility Programs

The principal implications for workforce movement between the U.K. and EU are:

    • Speed of deployment – organizations’ ability to rapidly deploy European nationals to the U.K. and vice versa will be restrained by work permit obligations. This is likely to be further exacerbated by the current pandemic.
    • Cost of deployment – costs are likely to increase not only in relation to immigration but potentially in areas such as social security and tax.

Additional implications which have been occupying organizations and global mobility professionals include:

    • Ensuring that employees (and dependents) already working abroad have applied for the right to remain in the country where they are currently residing.
    • Identifying assignees currently living and working in the EU and ensuring that any A1 certificate (social security) extensions into 2021 are in place before December 31, 2020.
    • Assessing the benefits of expediting any recruitment of key roles or talent moves before December 31, 2020.
    • Assessing current levels of cross-border working / business travel / commuting and ensuring protocols are in place to ensure future compliance (including permitted activities for business travel, tax and social security compliance).
    • Ongoing communication with employees and business leaders.

As the transition period winds down, there are multiple resources to stay informed, including the U.K. government’s “Check, Change, Go” campaign to help businesses and individuals prepare. Similar campaigns have been operating in other European countries as well.

To stay in the know, be sure to check our resources page regularly.

 

 
Stuart Jackson

Stuart Jackson

As Account Director at Sterling Lexicon, Stuart focuses on working with clients to optimize their global mobility solutions. Stuart has worked in global mobility for 19 years. His broad experience of working with different program sizes across a variety of industry sectors helps to bring success to clients' programs and wider business strategies. If you would like to discuss any of the points raised in this article or learn more about Sterling Lexicon, please do not hesitate to contact Stuart Jackson at stuart.jackson@sterlinglexicon.com.

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