Post Brexit end of transition – what now?

By rotide
Created 04/08/2021 - 16:24
Marcin Durlak.jpg

By Marcin Durlak, Managing Partner at IMD Solicitors LLP [1]

 No matter what political side of the spectrum you're on, there's no doubt that Brexit has impacted business regulations, opportunities, employment and profitability (in good and bad ways). Indeed, many of my clients, who are headquartered internationally but have outposts in the UK have faced hurdles when trying to continue business in the UK post-Brexit.

And international SMEs want to stay - the UK is a brilliant country to do business in due to its large and diverse population and ample opportunity for investment. However, where SMEs struggle is not being unable to navigate the new economic environment that has been posed by Brexit. It has created challenges and confusion particularly around employment, immigration and customs rules, but there are solutions.

Employment and Immigration

One of the main difficulties thrown up by the end of the transition period, is the ability to retain and source specialised workers. The freedom of movement in the EU allowed businesses to contract workers which they would struggle to find in the UK. Coupled with the new immigration rules on Skilled Workers this has made it more taxing for businesses to employ the workers they need.

For example, international construction and engineering businesses hold many valuable contracts in the UK and need labourers. However many of the labourers they would recruit from Europe don't meet the required skill set for the Tier 2 Skilled Worker Visa, and even if they do, their fluency in English isn't at a sufficient level. In the long-term this costs more for the business. It is harder to source this workforce in the UK, and it will be more expensive to hire them. Reluctantly businesses are having to drive up prices for clients and customers to manage this expense.

Some SMEs may have addressed this shortfall before the end of the transition period by applying for pre-settled / settled status for their current workforce from Europe. However this is only a temporary solution. Research released in May found that one in ten Europeans will leave the UK [2] post-June this year.

This has hit some businesses so hard that they have withdrawn from projects in the UK, and decided to focus on contracts in other European countries. For businesses that remain, the limited pool of employees coupled with the ‘pingdemic' have left them between a rock and a hard place.

Immigration issues have also arisen when it comes to business meetings. For SMEs the lack of visa clarity around travelling for business between the UK and EU has been causing concern. There's much confusion about what is, and isn't allowed without a visa, and when you would need to apply for a working visa. It's worth keeping up to date with the permitted activities page [3] on the government website (see general business activities), to make sure employees aren't contravening any rules.

However hope is on the horizon as nearly 6 million European workers have applied for settled status, some may have already been approved and in the interim those employees that have applied can continue to work and travel to the UK. But in the long-term - SMEs will wonder what they can do to safeguard their business and ensure they have access to the workforce they need. SMEs should utilise the local workforce where possible as well as European workers that stayed in the UK and were granted / applied for settled or pre-settled status. It's worth SMEs applying for sponsor status too so they can take on employees from abroad under Tier 2 Skilled Worker visas. Make an application for sponsor status as soon as possible in order to speed up the future visa application process, for when employees will be required.


The new customs declarations required have resulted in a lot more red tape and cost for businesses trying to import and export goods with Europe. A huge demand for customs agents and their advice has left many businesses in limbo. Some businesses have decided to set up a warehouse in the UK to make the logistics easier. It's also been key to have a reliable and efficient customs agent that will deal with the formalities - but a current shortfall means there's not enough agents available to deal with the volume of work coming through.

The steps taken by the Department for International Trade and the British Chambers of Commerce, who are working with the government to provide support to SMEs have been welcomed. While these take time to effect, SMEs would be wise to seek out the latest guidance on the Business tax [4] page of the government website.

Concluding thoughts

Although these blocks have thrown up issues for businesses, there is ripe opportunity for expansion in the UK. Seeking legal advice on the issues above will navigate SMEs through these tricky waters. The UK market holds so much economic opportunity, and it would be disastrous if international SMEs lost out, given how much they contribute to it.

For more information visit  IMD Solicitors LLP [5]

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