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How is Brexit going to affect my business?

Kriya Team
January 5, 2021
min read
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Although it seemed a little touch and go, a deal was eventually done. But what does it mean for your business in 2021?

On the 31st of December 2020, 1,652 days after the referendum result, the Brexit transition period officially ended. After remaining in the single market 11 months after the nation formally split from the EU back in January, last-minute negotiations were able to prevent the outcome of a 'no-deal Brexit'. However, as this new reality dawns on business owners across the country, many still are unsure of what Brexit could mean for their small to medium-sized enterprise (SME). With small businesses already getting hit by border delays and complicated paperwork, getting to grips with these new measures is the only way to protect your SME against future damage.

As the government reveals the finer details of these new regulations, information regarding changes to exports, imports, and tariffs is being disseminated to business owners across the nation. Yet, with the commencement of this new trade bill coinciding with the challenges of the coronavirus pandemic and the UK's third national lockdown, understanding how these complex measures will affect business is not likely to be a walk in the park. So, to help you navigate your SME through these unchartered waters, in this article, we're laying down the main ways that the new Brexit deal is likely to affect your small business. But before we dive in head first, let's first have a look at the latest developments of the agreement itself.


The UK officially left the European Union on the 31st of January 2020, before entering a transitional period that allowed us to continue trading as usual. On the 24th of December 2020, the 1,240-page Trade and Cooperation Agreement (TCA) was settled upon between the UK and EU governments, and the blueprint for 'living, working, and trading together' was produced. Finally, a week later on the 31st of December 2020, the transitional period came to an end, the UK left the single market and the customs union, and the TCA was officially implemented.

Compared to a no-deal outcome, which would automatically make UK-EU trade adhere to the terms of the World Trade Organization (WTO), the finalised deal was the preferred option among many politicians and business leaders. However, the new negotiations don't come without their consequences, so let's identify how they are likely to impact SMEs across the UK.


Changes to taxes

For the UK, leaving the customs union also means leaving the EU VAT regime. Therefore, from the beginning of 2021, many tax rules between the UK and the EU will either be replaced or no longer apply.

For instance, from the 31st of December 2020, the point at which VAT is collected was moved from the point of importation to the point of sale. This means that overseas businesses sending goods of a sale value less than €150 (£135) to the UK are now required to register for UK VAT and account for it to HMRC (Her Majesty's Revenue and Customs). These new measures also abolish Low-Value Consignment Relief, which was focused around relieving import VAT on goods valued at £15 or less. While these changes were aimed at supporting domestic businesses by lowering the competitive advantage of VAT-free imports, it's causing many Europe-based retailers to stop delivering to the UK, which in the short term may be more of a hindrance than a help to our nation's SMEs.

In terms of trading with non-EU-countries, since the UK is no longer covered by the EU's trade agreements, new duties and excise tax agreements will be applied. The effect of these duties and excise tax agreements will depend on contracts with the World Trade Organisation. However, it's unlikely any significant changes will take place when it comes to the taxing of cross-border trade between non-EU countries and the UK.

For more information on changes to taxes post-Brexit, visit the GOV.UK page here.

Changes to intellectual property

'Intellectual property' refers to the ownership of an idea, concept, or design by the individual (or group of individuals) who came up with it. It gives people exclusive rights to their own creative designs, and it prevents others from copying the creation without the owner's permission. Before Great Britain officially left the European Union, much of our intellectual property law was harmonised with the rest of Europe. However, now the transition period has officially ended, businesses that own IP need to be aware of how changes to UK legislation will affect them.

In terms of trademarks and designs, the Intellectual Property Office (IPO) is creating comparable UK trademarks and is re-registering designs for every registered EU trademark (EUTM) and Registered Community Design (RCD). Each of these rights will keep the original filing date, be recorded on the UK trademark or designs register, and be a fully independent UK trademark or design. This means they will be granted equivalent rights to the EU IP law that they were under previously. Businesses are not required to file for an application or pay a fee to make this change; however, if your trademark or design is not yet registered, you have nine months to apply in the UK to access the same protection level.

When it comes to patents, existing European patents that cover the UK will also remain unaffected, because the European Patent Office (EPO) is not an EU agency. Additionally, most UK copyrights will still be protected in the UK and the EU, and EU copyright works will continue to be protected within the UK. This is because EU countries and the UK both participate in the international treaties on copyright.

Applications for Action

However, when it comes to the intellectual property rights of imports and exports outside of the UK, after the 31st of December, protection within the EU stopped being recognised. This means that if businesses want to protect their IP rights, they will need to hold two Applications for Action (AFA) forms, one for the UK, and another in the EU. This also means that if a UK-based business made an application for IP rights in an EU country, they will need to make a new UK AFA application to maintain protection of their IP rights at the border.

For more information on how IP changes may impact your rights, visit the official GOV.UK page on it here.


As a result of the UK officially leaving the EU, it's likely that there will be a series of disruptions to the supply chains of businesses across the country. And, since many manufacturers are still dealing with repercussions of Covid-19, they must consider how they can adapt their strategies to reflect this new trading relationship as well.

New customs declarations

Even though the implantation of tariffs on goods travelling across the border has mostly been avoided, companies are required to complete customs declarations when transporting goods across the UK/EU border. To fill out these new custom declaration forms, UK and EU businesses are required to know their identification (EORI) numbers. As for goods travelling from the EU into the UK, the import must be EU-issued, since UK-issued authorisations will no longer be valid.

The UK customs authority has estimated that 270 million extra declarations will be needed per year for EU imports into the UK, with a similar amount expected to be required for exports too. These new bureaucratic procedures are expected to lead to longer waiting and delivery times. For businesses that rely on just-in-time supply chains, like those who trade fresh produce (such as fresh fish and meat), this extra disruption at the border could potentially impact the quality and retail value of their products. At a time when Covid-19 testing is required at some UK-EU borders, the risk of being delayed during this time is only compounded.

When it comes to completing this paperwork, if businesses appoint a customs broker to cover it, this is likely to result in additional compliance costs. So, to avoid these extra fees, it's best to plan ahead and to be aware of what forms your business may need to move goods in and out of the country.

For more information, click here for a full list of import and export forms.

Rules of origin

Goods will only be eligible to be tariff-free if they can prove they come from the UK or the EU. To do so, they must meet the 'rules of origin' requirements that were established under the Trade and Cooperation Agreement. This is necessary for UK businesses who desire zero tariffs when exporting goods to the EU, and when importing goods from the EU. An inability to meet these 'rules of origin', or a delay or absence in providing the correct authorisation could slow down the transportation of goods, or burden businesses with excess costs. Therefore, to keep supply chain disruptions as minimal as possible, it's important to stay up-to-date and informed about the current guidance.

To learn more about rules of origin requirements, visit the GOV.UK guidance on the matter here.


Since much of our domestic employment law derives from Europe, and a lot of British businesses are used to relying on freedom of movement across the continent, leaving the EU will change the circumstances for many employees living and working in the UK.

First of all, since the freedom of movement across the UK-EU border is now restricted for both skilled and unskilled workers, carrying out international operations may become less straightforward for UK businesses. Employees and small businesses that need to travel to EU member countries for work purposes will now require a work visa to make the trip. On top of this, all UK citizens must have a passport which is valid for at least six months if they are travelling the EU.

For SMEs based in the UK that employ EU citizens, these workers are required to apply for the EU Settlement Scheme. This scheme gives EU citizens and their family members the ability to live, work, and study in the UK after the 30th of June 2021. To apply to the scheme, EU citizens must have been a resident in the UK before the 31st of December 2020. While there is no legal obligation for employers to communicate this scheme to their employees, it may be wise to direct your team to the information that the government is providing.

In addition to the complications for EU citizens currently working in the UK, it will now become even more challenging for UK businesses to hire employees from outside of the UK. Due to the points-based immigration system that was introduced on the 1st of January 2021, employers need to be a licenced sponsor to hire eligible employees from the EU. Aside from disrupting UK job opportunities for workers based outside of the country, this will also have a massive knock-on effect for business owners, as these measures are likely to considerably shrink the employment pool.


Since the end of the transition period, our parliament has gained the autonomy to retain, amend, or repeal EU legislation that used to concern UK businesses. Since 'taking back our laws' was a colossal rallying slogan behind the Vote Leave campaign in 2016, many may consider this a victory. However, as most of the UK's employment law is influenced by EU legislation, leaving this legislative framework behind could potentially remove a lot of protections for small businesses.

To be specific, since 1990, a total of 52,741 laws have been introduced in the UK as a result of EU legislation, with most of these laws focusing on protecting the rights and safety of institutions and individuals across the country. For instance, TUPE (which protects employees if the business they are working for changes hands) and many other anti-discrimination laws, were heavily influenced by the European Court of Justice (ECJ). So, from the 30th of December, the UK courts may make the decision to override these EU-bound laws, while also having the power to make regulations that allow lower courts and tribunals to diverge from existing EU case law.

To try and keep legislation as consistent as possible, the UK government plans on creating a new category of legislation that would provide continuity concerning employment rights. However, since the repeal or amendment of pre-existing measures could affect the rights and protections of millions of businesses, (especially those who are dependent on regulatory alignment like UK-EU trade), it's essential to keep an eye out for the most recent developments in this area.


The UK, especially London, is used as the European hub for many businesses that operate from other global locations, such as Asia and America. However, since Brexit was first on the agenda in 2016, many companies have looked to move their European headquarters elsewhere in order to minimise interruptions to trade. For instance, the Japanese electronics' manufacturer Panasonic recently moved their European headquarters from the UK to The Netherlands to minimise taxes, and to continue the freedom of movement for their goods and staff members. This is only the tip of the iceberg.

As a survey by EY found, 75 out of the 222 countries they monitored either stated their intentions or publically confirmed to move their operations off UK soil by the time we officially split from the UK. So, now Brexit negotiations have been finalised, it's likely that more companies may look to move out of the UK once this new reality sets in. For this reason, it is generally recommended for you to check up on clients and suppliers as a precautionary measure, just to see whether they're likely to stay in the UK.


Before the end of the transitional period, EU State aid law prohibited the UK from delivering state aid and subsidies that would disrupt the competition within the European market. This is because the EU wants to prevent certain businesses from gaining an unfair privilege over others. Throughout the Brexit negotiations, this topic has been a point of contention between our government and the EU, because the UK could potentially benefit from having more control over sanctioning subsidies (especially if the Brexit agreements contributed to a decline in foreign investment).

So, after a series of back and forths, it was decided that the EU State aid rules, which were designed to support the EU single market, will no longer apply to subsidies granted in the UK.

This means that public authorities within the UK are not required to adhere to the regulations of other EU member states, which may potentially have favourable outcomes for UK business and trade. However, for public authorities to award subsidies, they need to ensure they are compliant with World Trade Organisation rules, and the UK's free trade agreements (FTA). So, for the sake of fairness, for new subsidies to be granted to businesses in the UK, they aren't able to receive competitive advantages over other companies operating in the EU.


Personal data refers to any information that may be used to identify any living person. This may include names, IP addresses, physical addresses, or personal details, and most businesses handle this data on a daily basis. Before the 31st of December 2020, a free flow of personal information was allowed between the UK and the EU. Now that the Brexit deal has been implemented, however, EU data protection law has been converted into UK domestic law. This essentially means that the UK has regained full autonomy over its data protection rules. Yet, since businesses are still entitled to the same rights of data protection, it's unlikely any changes will be made that would jeopardise the security of any personal data SMEs handle. However, it may be worth taking stock of any personal data your company holds, because it's possible that further developments could take place in the future.


More information

If you're looking to gain a more thorough understanding of how these new developments may affect your business, more help is at hand.

The GOV.UK transition page helps to break down the Trade and Cooperation Agreement concerning the main changes for businesses. Their Brexit checker gives SMEs a personalised list of actions that may help you to adapt to these changes as seamlessly as possible.

Government-backed loans

If the new Brexit developments have caused issues to your business' cash flow, rest assured there are options out there for financial support. Back in March, as a response to the Covid-19 pandemic, the government announced a series of government-backed loans to provide struggling businesses with a financial lifeline. So, whether your business is impacted by the national lockdown or the new Brexit measures, it may be worth checking out what help is on hand for you.

The Coronavirus Business Interruption Loan Scheme (CBILS) is catered explicitly towards smaller sized businesses. It helps SMEs to access loans and additional forms of finance (up to a limit of £5 million). The scheme provides overdrafts and invoice facilities for up to 3 years, and loans and asset finance facilities for up to 6 years, so businesses aren't under any immediate time pressure to pay anything back. The government also guarantees 80% of the funding, so your SME isn't required to pay back any interest throughout the first year of borrowing!

At Kriya, we help make accessing CBILS as quick and hassle-free as possible. We're an accredited lender, and we offer both loans or revolving credit facilities that are adaptable to the unique needs of your business. To ensure the application process is as simple for you as possible, our fantastic customer service team is on hand at each step of the way.

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