Brexit: Consequences for entrepreneurs and employees

When you, as an entrepreneur, do business with the United Kingdom, Brexit will change things for you. On January 1, 2021 the United Kingdom’s transition period for leaving the European Union will end. You are expected to be ready for all the changes that brings. Although this date is quickly approaching and the impact is significant, you may not be fully prepared for this transition. Lexlupa will briefly explain what the consequences of Brexit are for you on January 1 and how you can adapt your management. 

**Please note: This article was written before Januari 1, 2021. For more recent information on the Brexit agreement that applies as of 2021, click here.**

Hard or soft Brexit?

At the time of publishing this blog (November 2020) the EU and the UK are still negotiating. Right now experts are looking into if and what agreements can be made in regard to trade between the EU and the UK. 

For the purpose of better understanding these negotiations, we are talking about a soft and a hard Brexit. A soft Brexit will mean that proper agreements are made in regard to business with the UK. If no trade agreement has been made, there will be a hard Brexit: business with the UK will go according to the regulations set by the World Trade Organization (WTO). In both cases, Brexit will have consequences for entrepreneurs doing business in the UK. 

Because at the moment it is not yet clear whether a soft Brexit will happen, it is advisable to prepare for a hard Brexit as an entrepreneur. 

The biggest changes: Employees, import, export, transport and services

When you deliver goods and/or services, import from the UK, or when your personnel file is related to the UK, you, as an entrepreneur will be most affected by Brexit. Below we will explain what those consequences could be for you if British people are working for your Dutch company, or when Dutch employees are working for you in the UK. when you export and import goods from and to the UK, you can read more here* about the potential Brexit consequences for you. Do you deliver services to the UK or do you receive services from the UK? This article explains what the impact of Brexit can be for you and how you can prepare for it. 

Below we will dive into the possible Brexit consequences for your employees. 

Employees

Do you employ British residence or are your employees working in the UK? You will need to deal with the new regulations starting January 1. 

British employees in The Netherlands

British citizens will need a residence permit starting January 1, 2021. Brits that will work in The Netherlands in the future will also need a work permit. When you employ people from the UK, this condition will apply to them. As an employer, you will need to arrange the work permit*. Your employees will have to request the residence permit themselves.
British employees that were already employed before January 1, 2021, do not need a work permit. However, they will need to request a residency document. Make sure your British employees are aware of this new requirement. Because without the proper documentation, they are not allowed to work in The Netherlands (or other EU-countries). 

Dutch employees in the UK

After January 1, 2021 you cannot work and live in the UK without proper documentation. When you employ non-British employees in the UK, they will need to have the proper residence status. Information about this status and the request for this is given by the British government. Make sure your employees have the proper residence status in time. When this is not done in time, they will no longer be able to live and work in the UK. 

Prepare properly for the Brexit consequences

When you do business, or work together with parties from the UK, Brexit will demand you research your management in this area. When you have the correct information about the changes, you will need to implement these before January 1, 2021. 

Support: Brexit Impact Scan and Brexit-voucher 

The government will meet you halfway concerning the correct information. The Brexit Impact Scan* by the RVO advices you on the basis of a questionnaire. Companies in need of external advice or support can request a Brexit -voucher*. This is a compensation for SME-businesses that may be affected by Brexit. The voucher covers 50% of the expenses of professional advice, up to €2.500,-. Both your enterprise and the Brexit-consultant will need to meet a few conditions. 

Want to know more about the Brexit consequences?

Brexit changes are complex, unclear and manifold. Above we have listed the most general consequences you, as an entrepreneur, will have to deal with. It is too much to go into all the details and some topics will be left unspoken. Please visit Government information for entrepreneurs on Brexit (in English) for more information. Or read more about the Brexit agreement on Lexlupa.com. 

Lexlupa is a multidisciplinary effort of fiscal, legal and economic experts. We give advice and guidance to companies, institutions and private individuals at life events. Lexlupa helps you to make well-informed choices in business and personal affairs, and we support you in managing your business in the best possible way. 

*Need help navigating the Dutch websites? Reach out to us. 

**Article (currently) only in Dutch