How did Brexit affect UK businesses?
The UK leaving the EU at the end of 2020 caused a profound change in trading markets and business activities for various types of companies. At TEPO we’ve analyzed how Brexit regulations have impacted UK businesses with both positive and negative effects.
On the one hand, the UK secured a post-Brexit trade deal with the EU called the TCA (Trade and Cooperation Agreement), allowing UK businesses to continue tariff-free trading across a variety of sectors. For instance, agricultural products imported or exported from the UK need to have grown in British or European soil to be considered ‘originating’ and qualify for TCA terms. If not, they need to have been ‘significantly changed’ to not be subject to the UK global tariff or common customs tariff that businesses often end up unexpectedly paying.
With the end of free movement between UK and EU, Brexit also impacted the workforce since EU workers now need a work visa just like any other non-UK citizen. Businesses will need to apply to become an approved sponsor, and for existing EU, EEU or Swiss employees, they will need to apply for settled or pre-settled status to remain working in the UK.
But on the other hand, the UK is less restricted by EU regulations and can trade more freely with other non-EU markets like the US, one of its closest allies. Each year, the two countries trade over $260 billion worth of goods and services, which could increase even more with new trade agreements. One is currently being made for bilateral exchange of goods and services with no trade tariffs across the Commonwealth of Nations, a voluntary political association of 53 sovereign states nearly all former British colonies.
With a meritocratic system for immigration and more flexible labor laws than in most EU countries, it should be made easier to attract and then hire highly skilled foreign employees. Moreover, the fall of the pound makes UK products cheaper and more appealing to other expanding markets such as China and Brazil. It could be a good idea for entrepreneurs to look for markets where their products are even more necessary.