2016-07-27 00:00:00Small BusinessEnglishWith the UK voting to leave the EU, what does Brexit really mean for your business? Is it cause for concern or a time for optimism?https://quickbooks.intuit.com/uk/resources/uk_qrc/uploads/2017/01/referendum.pnghttps://quickbooks.intuit.com/uk/resources/small-business/the-implications-of-brexit-on-your-business-part-1/The implications of Brexit on your business (Part 1)

The implications of Brexit on your business (Part 1)

4 min read

With the dust settling on the Brexit decision, it’s time to start planning for the coming changes.

The Bank of England issued a statement post-referendum announcing that both they and the Treasury had prepared for the given outcome. The Governor, Mark Carney, gave assurances that he has undertaken extensive contingency planning and raised enough capital and liquidity to give banks the flexibility to continue to lend to UK businesses. The now former Chancellor George Osbourne continued to back his initial pre-referendum statements.

Now, Brexit is happening, what are the implications for growing your small business? We’ll aim to answer questions surrounding what Brexit might mean for businesses employing non-UK national employees and for patent law. We’ve also asked a few small businesses to share their views on Brexit.

Employment Law and Brexit

With foreign citizens taking an 11%[1] share of total employment in the UK, Brexit could mean a big change for employers. While 36%[2]  of non-UK employees are from outside the EU – meaning they shouldn’t be affected by Brexit – that still leaves 2.15 Million[3]  employees in the UK whose job statuses are potentially uncertain. Detailed information of new employment legislation will have to be ironed out during the coming negotiations surrounding Britain’s exit from the EU.

Some employees from the EU will face the same regulations as international employees, meaning they would need a visa to work in the UK. Visa applicants are sorted according to the five tier visa system and are into 5 categories. The system assigns points based on skill, experience and age, with a certain number of points necessary for their visa to be granted. For employers this would mean acting as a sponsor, which for small businesses includes a £515 sponsorship fee along with a certificate of sponsorship for each international employee (currently £184 per certificate).

Alternatively, Britain might choose to concede open boarders to the EU in exchange for single market access, in a similar way to Switzerland. Again, details of such an agreement would have to be negotiated, but it could mean a less significant change regarding employment law for EU citizens.

Patents and Brexit

Brexit should not have an immediate effect on patents, as patent law is not generally harmonised under EU legislation. Whilst European Patents do exist, these are merely a bundle of national patents acquired via a centralised application to the European Patent Office. Britain’s access to the European patent system is not dependent upon Britain being a member of the EU and will continue irrespective of negotiations surrounding Brexit.

The immediate impact of Brexit will, however, be felt with regard to the Unified Patent and the Unified Patent Court, which will be tied to the EU. The United Kingdom is currently one of the three nations which must approve the final UPC Agreement. In addition, one of the UPC courts (dealing with disputes regarding life science patents) was to be based in London, an agreement which is unlikely to be upheld post-Brexit.

Our Small Businesses

We also reached out to some of our customers to get an insight into how they are approaching business now that Brexit is a reality.

Alex King, from somewhere like home, a holiday property management company, feels Brexit could have both positive and negative consequences for business:

‘The bad: We have a number of EU migrants working in our business, and I’m concerned that their future is not as certain as was originally specified by the Leave Campaign.

The good: As we are in the tourism industry the weak pound means more people are likely to come here. This should lead to increased sales, a big plus!

The weak pound also means that it will be more expensive to run our overseas (EU) subsidiary company.’

Adam Miller from Mosaic Marketing finds that ‘so far the Brexit vote has had a positive effect. The main benefit of the vote is the drop in the GBP/Euro rate. Our prices are instantly looking more competitive to European companies. As we’re not buying anything in Euros to fulfil these orders, there is no increase in our in/out costs. We don’t specifically need an international trade agreement to be in place to do business with these European companies.’

Regardless of your business, Brexit will surely mean big changes to the British market. If you have found this article helpful, keep an eye out for the second part, which will be focusing on Data protection and Intellectual property along with further small business insights.

If you’d like more information but don’t want to wait until next week for part 2, then download our free Brexit e-book.

Amy Smith is a writer from London, who grew up in Munich. Having grown up between two countries, she has an interest in all things global – languages, culture, and politics.

Notes

[1] http://www.migrationobservatory.ox.ac.uk/briefings/migrants-uk-labour-market-overview

[2]http://www.ons.gov.uk

[3]http://www.ons.gov.uk

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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