Over 6 years have passed since a majority vote in the UK to leave the EU. Now, 18 months after the end of the Brexit transition period, Birketts’ Heidi Bond looks at Brexit’s impact on international trade.
Employment
The end of free movement between the EU and the UK is undoubtedly one of the most significant and long lasting impacts of Brexit. The Office for National Statistics reported that the ratio of vacancies for every 100 employee jobs reached a new record high of 4.4 in the period from December 2021 to February 2022, which is the 12th consecutive period of growth.
Since Brexit, EU nationals looking to live and work in the UK for the first time now need to obtain a visa, just like non-EU nationals. Therefore, the next generation of EU nationals will be unable to fill UK employment vacancies with the ease that their predecessors did and business need to factor in additional recruitment costs and delays in on boarding whilst visas are secured.
For employers, those looking to recruit skilled workers from the EU will need to become a licensed sponsor. However, sponsorship only applies to workers whose roles are skilled to RQF3 (A level) or above. For example, it does not apply for waiters, bar staff, entry level factory workers, packers, warehouse supervisors or fork-lift truck drivers. Furthermore, it does not apply to roles for which the salary is less than £25,600, or £20,480 for new entrants younger than 26.
In addition, for European business that don’t yet have a formal legal entity in the UK, or for self-employed individuals or sole-traders, there is a very limited number of visa options available to enable them to undertake business in the UK legally.
Finally, as travel resumes post-pandemic, business need to be alert to the increased risks associated with business travel. Following the end of free movement arrangements between the UK and the EEA, there is now a significantly reduced scope of permitted activities for ‘visitors’ and caps on the duration of business visits that can be undertaken. It is also a common misconception that short trips don’t require a visa – in fact it is the activity and not the duration of travel that will determine this. This is a new compliance challenge and a change in mind-set for business travellers – it’s vital to consider these limitations prior to travel (compared to taxation implications which are typically considered after the event) to avoid refusal of entry or employees being given an adverse travel status that could impact them for the long term.
Farming subsidies
Defra has ambitious plans to replace the EU’s Common Agricultural Policy (CAP), which provided UK farmers with approximately £3.5 billion annually before Brexit. 80% of this funding was provided by direct payments made through the Basic Payment Scheme (BPS), calculated based on how much land was farmed. The BPS is being withdrawn in England by a gradual reduction, and is to cease completely by 2028. A new domestic financial support system for England is expected to focus on “public funds for public goods” which will move away from subsidies based on the amount of land farmed, and towards subsidies for delivering environmental benefits. It remains to be seen whether farmers will be able to run effective businesses under the new subsidy system.
Data Protection
As a result of Brexit, the UK became a country outside of the EEA. This meant there was a question over whether EEA countries could transfer personal data to the UK without safeguards, such as Standard Contractual Clauses. On 28 June 2021, the European Commission adopted an adequacy decision under the GDPR, meaning that it deemed the UK to hold an adequate level of data protection so data could flow freely from EEA countries to the UK. However, the adequacy decision only lasts for four years – if the decision is not extended, it will expire on 27 June 2025.
Intellectual Property Rights
Since the end of the transition period, businesses wanting to apply for new trade marks to be protected in the EU and in the UK will need to apply for an EU trade mark and a UK trade mark – a new EU trade mark will not provide protection in the UK.
The same is true of Registered Community Designs and Unregistered Community Designs – new ones will not give protection in the UK.
Businesses established in the UK but not in the EU cannot register new ‘.eu’ domain names and any existing ‘.eu’ domain names they held before the end of the transition period have been suspended unless the registrant demonstrated, before 30 June 2021, their establishment in an EU Member State.
Copyright law was largely unaffected by the expiry of the transition period. However, UK and EU copyright is expected to diverge over the course of time as the Court of Appeal and the Supreme Court are likely to depart from previous EU case law, and the UK is now able to adopt its own copyright legislation and disregard EU copyright directives.
There is little impact on patent law. The UK remains part of the European Patent Organisation after Brexit.
Take aways
So what have we learned over a year and a half after expiry of the Brexit transition period?
The true breadth and depth of the impact from our decision to leave the EU is, in many areas, still unknown. Whilst in technical and legal terms the transition period has ended, in reality, we are still very much in a long period of gradual transition, seeking to replace the lacunas left behind from 47 years of EU membership.
For more information on the issues raised in this article, please contact Mark Pinder in the Birketts Corporate and International teams or Sacha Wooldridge in the Immigration Team.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at August 2022.