Remember when Brexit used to be the biggest headline hitting our screens? It might feel like a lot has changed since the UK voted to leave the EU, but 2021 is the year that Brexit becomes a reality. Whilst perhaps old news, as the UK actually left back in January 2020 and in turn entered a 12-month transition period where negotiations took place, effects of these changes are now being felt, as new rules and regulations came into force on 1st January 2021. So, it’s time your startup got acquainted with what Brexit actually means for your business. 

Changes in law can impact startups heavily, yet demystifying new rules and regulations can feel like a full-time job in itself for any stretched startup founder. Research has found nearly 60% of SMEs don’t fully understand their supply chains. So, we’ve sifted through Gov.uk so you don’t have to, and we’ve compiled 10 things startup founders need to know about all things Brexit. From new restrictions, to opportunities Brexit may afford founders, here’s exactly where your startup stands:

 

The team at East Coast Distillery
#VirginStartUpAlumni East Coast Distillery

1) What Brexit means for your employees 

For founders, you might be understandably concerned about ensuring your current employees are protected, and that any future hires are possible. The main thing to ensure here is that all your employees that aren’t yet UK citizens get registered for Settled Status

Settled status is a fancy way of saying that your employees will be able to retain the same rights as UK citizens, and therefore the right to remain post-Brexit. 

How does this work? Employees who’ve resided in the UK for five or more years by 31st December 2020 are eligible to apply for Settled Status. Those having lived in the UK for less time can apply for Pre-settled Status. Once the five-year milestone has hit, they can then apply for Settled Status. The deadline for applications is 30th June 2021, so you have time to explore this with your employees. 

2) What Brexit means for hiring

When it comes to EU-based recruitment, the immigration system has been reworked to a points-based model, of which you can find out more here. If, as a founder, you’re concerned about how this may impact your startup, you can look to apply for a sponsor license to allow you to subsequently hire EU nationals going forward.

 

Arroe's electronic products
#VirginStartUpAlumni ARROE

3) What Brexit means for international trade 

If you regularly import and export as part of your startup’s supply chain, there’s a high chance you already know exactly how Brexit has impacted international trade. But for founders who infrequently deal internationally, let’s break down what the new regulations mean for your business. 

When it comes to importing, the steps you need to take are clearly outlined on the Government website. The rules changed as of 1st January 2021. The main things to note are: 

  • You now need to make customs declarations when you import goods from the EU
  • You need to ensure you have a new EORI number that starts with GB to import goods into England, Scotland or Wales, and you may need one that starts with XI for Northern Ireland
  • You need to find out the commodity code on your goods to understand the rate of duty you’ll need to pay
  • You’ll need to check if you need a license for any of the goods you are importing, as the rules for importing some types of goods have changed

4) And for exporting?

Follow these steps and you can minimise hold-ups at the border. 

 

The founders of Black Milk
#VirginStartUpAlumni Black Milk

5) What Brexit means for your cash flow 

From January 2021, businesses will begin to see the extent of the impact Brexit has on companies. There have been concerns amongst businesses on how everything from the exchange rate, to cash flow will be affected, but as long as your startup is prepared, these issues will be navigable. 

Check up on the tax treaties that have been agreed between the UK and the country you’re concerned with, to understand whether this affects your startup. If you sell online, ensure all check-outs allow the option for non-GBP payments to maximise sales. Assessing your cash flow and finances is something all startups can benefit from whether there is a change or not, so use Brexit as the perfect excuse to get on top of your business. 

6) What Brexit means for travel 

Aside from the personal holidays we’re all hoping to book in 2021, if you’re travelling for business this year, it’s good to be aware of the following facts: 

  • On the day you travel, you must ensure your passport is valid for the next 6 months or more, and that it’s less than 10 years old. If not, you’ll need to renew your British passport. These stricter rules do not apply for travel to Ireland, however. 
  • European Health Insurance Cards (EHIC) are still valid until the expiry date when travelling in the EU. Once expired, you need the new Global Health Insurance Card, available online for UK residents.
  • You are able to stay up to 90 days in any 180-day period without a visa, but check in on the rules for living and working in the EU to examine specificities further. 
  • Check with your phone operator on any changes to roaming charges.
The set-up at Aquifer Film Studio
#VirginStartUpAlumni Aquifer Film Studio

We’ve covered the key areas your startup may be impacted. Now, what about the opportunities this affords startups? 

7) Trade set for big boost in 2021

Devalutions in GBP are inevitable, but this may encourage trade and investment as we move through 2021 - something startups can get excited about. 

8) 'Support local' will take on new meaning 

If you’ve been reading the updates on importing and exporting, thinking your independent startup won’t be affected - think again. A huge trend we’ll see this year that can be considered as hugely useful for independent businesses, is as the cost of imported goods rise, consumers will favour small businesses, giving independents a chance to thrive. 

HumaniTea founder
#VirginStartUpAlumni HumaniTea

9) A chance to pivot? 

It’s been reported that many public sector roles handled by the EU will now be handled within the UK itself, so startups have a unique opportunity to pivot to support companies within this sector.

10) There are resources out there to help you 

If you’re unsure what Brexit means for your business, be sure to check out the Government’s Brexit Transition Checker to build up a clear picture of key steps your startup specifically needs to take. 

For further advice and updates on Brexit, check out the UK Government’s website. Find out how a Start Up Loan from Virgin StartUp can support your business in 2021.