Brexit - How to prepare for the end of the transition period

The Government’s advice on preparing your business for Brexit can be accessed here.

BEIS is running a series of webinars on business readiness. We strongly advise members to join those to gain access to supporting documents and checklists. The Services and Investments webinar recording can be found here.

If so, you can encourage them to sign up to the Government’s EU Settlement Scheme – there is a toolkit for employers.

The EU Settlement Scheme for EU nationals is open until 30 June 2021.

There is still no clarity on Right to Work (RTW) checks following the end of the EU Settlement Scheme in July. We are working to ensure the Home Office understands the nature of the recruitment industry and have put forward policy proposals. Home Office Guidance will then be updated when they have finalised their position.

At present employers are clear on the procedure they need to follow for RTW checks, following the Home Office guidance and checking documents from 'Lists A or B'. Following this process gives an employer a defence if they unknowingly employ someone who does not have a right to work – enabling them to avoid the £20,000 statutory penalty.

The changes brought about by Brexit will lead to a new regime in terms of what documents employers will need /be able to check for right to work purposes. Many of the details regarding Brexit are still being discussed with the EU and have not been finalised. 

However, the Government stated in its 19 January 2020 Policy statement that it planned a new post-Brexit ‘points-based immigration system’:

EU citizens living in the UK by 31 December 2020 are eligible to apply to the EU Settlement Scheme and will have until 30 June 2021 to make an application. As a transition measure, employers, landlords and public service providers will continue to accept the passports and national identity cards of EU citizens as evidence of permission during this period, up until 30 June 2021.

So on the face of it, during the grace period (1 January 2021 – 30 June 2021) when EU nationals will be able to apply to the EU Settlement Scheme, employers will not be required to check whether an EU National entered the UK after 31 December 2020. Employers should not target EU nationals to carry out Right to Work Checks where not required.

But there could be issues for employers if it comes to light that an EU national they employ after 31 December 2020:

• either does not have the right to apply to the Scheme (they entered the UK after 31 December 2020)
• or subsequently loses the right to apply to the Scheme because they miss the 30 June 2021 deadline.

If an employer is aware of this, while the civil penalty £20,000 fine may not apply, they could inadvertently fall foul of the more serious breach of immigration laws, i.e. ‘knowingly employing’ someone who doesn’t have the right to work – this is a criminal offence. Employers should take further advice if they have reason to believe that a any employee potentially does not have the right to work.

On 31 December 2020, freedom of movement between the UK and the EU will end. In its place, the UK Government’s planned points-based immigration system will come into force.

This will apply to people arriving in the UK from 1 January 2021. The new system will not distinguish between EU and non-EU nationals.

On 1 December 2020, the government launched a number of immigration routes under the UK’s new points-based immigration system, including the Skilled Worker route, which is now open for applications. You can access the Home Office factsheet here for more information.

Please note that EEA nationals that arrive in the UK before 31 December 2020 remain eligible for the EU Settlement Scheme. From 1 January 2021, both EEA and non-EEA nationals will have to rely on the new visa system.

The new guidance is now available here as well as an introduction for employers. For more information on sponsoring a skilled worker (formerly known as tier 2), please follow this link, and the list of supporting documents can be found here.

More detail on the future immigration system and how to prepare can be found here, including a guide from Immigration Lawyers, Fragomen LLP.

The Home Office has launched a new campaign and new guidance to promote the new system among UK employers, including a Business and the Future of Immigration in 2021 podcast which is also available on Spotify and Apple. 

For the skilled worker route, all jobs have a corresponding Standard Occupational Classification (SOC) code which designates the skill level and if that job meets the requirements of the skilled worker route.

The full list of occupation codes allowed under the skilled worker route can be found in the July 2020 policy statement and is subject to change.

At present, there is no “low-skilled” route (below RQF3/A-Level). The REC is raising concerns on members' behalf as part of the Home Office Employers Immigration Advisory group. If you want to share case studies with us of how this will harm your business, that will really help our cause - please send them to policy@rec.uk.com

Data flows that you will need to check include:

• If you trade in services with the EU, including to business partners but also outsourced functions, e.g. HR, accounts, back office
• If you have European operations, including intra-company transfers and to regional offices and branches
• Cloud services, including if you have a cloud-based CRM

In a no-deal scenario, the EU would treat the UK as a third country and not recognise the UK’s standards for handling personal data. UK companies would need to ensure that any transfers of personal data (internal or external) are in accordance with third country requirements.

To understand more about the steps you need to take, click here. More information on how to comply with this can be found on the Information Commission Officers’ website.

In the absence of a trade agreement, the mutual recognition of professional qualifications we currently have with other EU members will come to an end.

This means there will be changes to how services are regulated and how professional qualifications obtained in the EEA & Switzerland are recognised in the UK.

To understand what you need to do:

• Check the European Commission’s Regulated Professions Database (REGPROF) to find out if the profession is regulated.
• Contact the single point of contact for each EEA country, to find out how to get your professional qualification recognised.
• More information about rights to practise for legal professionals can be found here.

For more information, check the Government website.

Do you currently provide staff to the UK public sector through a government framework?

From 1 January 2021, a new e-notification service called Find a Tender will be used to post and view public sector procurement notices, replacing the Official Journal of the European Union.

Portals such as Contracts Finder, MOD Defence Contracts Online, Public Contracts Scotland, Sell2Wales and eTendersNI will continue to publish low value or location-specific notices.

More information can be found here.​

The Government has published Brexit guidance on their website. There is an option to filter this guidance by sector/business area on the top left of the page.

This section is for REC members who do business in the EU.

From 1 January 2021, the UK will default to third-country status for EU Member States’ immigration rules. This will cause possible immediate disruption for UK businesses that rely on sending staff to the EU for short-term work or to provide ‘fly-in-fly-out’ services.

UK nationals travelling to the EU to provide services, undertake a placement, or on intra-company transfer will need to check if a visa or work permit is required to work/rent, even if not required at the border. Each EU country has a different national visa system. Details on the EU visa policy can be found here.

You can find more information about providing services and travelling for business here.

REC members that have a branch in the EU may need to comply with additional legislation. These restrictions and changes will depend on the country in which the business is operating. Make sure to follow the advice on data flow (above).

You might want to check the following information on the links provided:

·         Accounting standards and reporting requirements

·         Nationality and/or residency of senior managers or directors, and/or limits on the amount of equity that can be held by non-nationals

·         Regulations to provide services remotely from the UK to the EEA might change. You should check this by sector and by the EEA country you want to trade with

·         Cross-border commercial and civil legal cases

·         Intellectual property

·         Changes to the VAT system

Further help and support on if your business trade with the EU info can be found here.

UK nationals travelling as business visitors may need work permission if their proposed activities do not fall within a work permit exception in their destination country. There are 27 different countries to deal with - each with their own immigration rules. More information can be found on the Fragomen website.

If so, check the rules for passports, health insurance, car insurance and driving licences and other relevant requirements for the role. Find out more about providing services and travelling for business here.

If the UK leaves the EU with no agreement, then there will be some specific changes to the VAT rules and procedures that apply to transactions between the UK and EU member states. More information can be found online.

If you already have contracts in place to provide workers to companies based in the EU, evaluate whether these are still deliverable, discuss options with your client and put in place contingency plans. If you cannot supply the workers, you should review the contract to ascertain whether there is scope to vary or terminate the contract without liability, if it makes commercial sense to do so.

As a current member of the EU, the UK is party to EU international agreements with third countries, including 40 Free Trade Agreements (FTAs). The UK has been seeking continuity of these existing FTAs. If none is agreed and we leave without a deal, then the UK will trade with that country under World Trade Organisation (WTO) rules. The Government’s progress in agreeing these can be found here.

If you operate in a country in which the UK currently trades under the terms of EU trade agreements - as modern trade deals protect intellectual property, enhance digital trade, open procurement opportunities and enable data flows, no-deal will have an impact on your operations in this country. Government’s guidance on trading under WTO rules can be found here.

More information on the trade agreements the UK has signed with non-EU countries and which will remain in place after the transition period and on mutual recognition agreements (MRA) can be found here.