If the UK leaves the EU without a deal, there may be changes that affect your business.
Your business may need to make changes before the UK leaves the EU. Please visit Prepare for Brexit to find more detailed guidance on policy changes relevant to your sector and to sign up for updates.
Markets and trade
Cross-border trade in the electricity market
If the UK leaves the EU without a deal, cross-border flows across electricity interconnectors will no longer be governed by EU legislation.
Alternative trading arrangements will need to be developed. The government, Ofgem and where appropriate, the Northern Ireland Utility Regulator, are working with interconnectors to ensure new access rules are approved in Great Britain and are providing support to interconnectors engaging with EU member state authorities.
Market participants will need to make use of the alternative arrangements developed for purchase and sale of power cross-border. In the event of a no deal, there will be implications for trade between Great Britain and the Single Electricity Market through interconnectors. Changes to trading arrangements have been outlined by the Northern Ireland Utility Regulator in an information note published on 11 March.
UK market participants will need to register under the Regulation on Energy Market Integrity and Transparency (REMIT) with an EU regulatory authority for the purposes of market monitoring to avoid a disruption to cross-border trade or trade within EU wholesale energy markets, or trade within the Single Electricity Market that Northern Ireland shares with Ireland.
The majority of the existing REMIT regime will be maintained domestically with minimal changes. Ofgem and the Northern Ireland Utility Regulator have published information about REMIT setting out steps for market participants in Great Britain and Northern Ireland respectively to take. Read further guidance on trading electricity if the UK leaves the EU without a deal.
The government will take all possible measures to maintain the Single Electricity Market and continue to work with the Irish government and European Commission to seek agreement that the Single Electricity Market will continue. Northern Ireland electricity market participants should continue using the Single Electricity Market processes and arrangements. However, market participants should be aware of the risk that the Single Electricity Market may not be able to continue, in which case government and the Northern Ireland Utility Regulator will take action to seek to ensure continued security of supply and market stability.
Market participants should check the status of contracts and licences to operate in EU countries which may be impacted by EU member state domestic market access restrictions, to ensure that they are still eligible to undertake their committed activities.
Energy and climate
Participating in the EU Emissions Trading Scheme (EU ETS)
If the UK leaves the EU without a deal, then the EU rules governing the EU ETS would no longer apply to the UK.
Business emissions from 1 January 2019 onwards will no longer be covered by the EU ETS, so UK businesses would no longer need to surrender allowances for these emissions at the end of each year.
However, all stationary installations currently participating in the EU ETS should continue to comply with the regulations for the monitoring, reporting and verification of greenhouse gases. These regulations will underlie the new UK Carbon Emissions Tax.
The UK Carbon Emissions Tax will be set at £16 per tonne for 2019. In light of the further extension to Article 50, the government confirms that the Carbon Emissions Tax will not be commencing on 15 April. Further information on the implications of the extension for carbon pricing will be set out in due course.
Subject to state aid approval, the scheme to compensate energy-intensive industries for the indirect costs of the EU ETS would remain in place to compensate for the indirect emission costs of the new Carbon Emissions Tax.
Accounts administered by the UK in the EU ETS allowance registry and Kyoto Protocol registry will be blocked from the point of the UK leaving the EU. Operators wishing to retain access to their allowances after the withdrawal date should consider opening an account in another member state’s registry for this purpose, and should consider the amount of time this is likely to take. Clean Development Mechanism project developers with a UK Letter of Authority will also need a letter of approval from a different Designated National Authority.
Until further notice, the UK government will not issue or auction any 2019 EU ETS allowances.
It remains possible for allowances to be purchased through the European Energy Exchange (EEX) auction platform, and on the secondary market. Operators should consider this when planning to meet 2018 compliance obligations.
To make sure your compliance obligations will not be affected, the government brought forward the 2018 compliance year deadline. This has subsequently been subject to further change. Operators must surrender allowances equivalent to their 2018 verified emissions by 30 April 2019.
Carbon Emissions Tax legislation is included in the Finance Bill 2018-19.
Importing and exporting
Preparing for disruption to trade at the UK-EU border
Get a UK EORI number (this starts with GB) so you can continue to import or export goods and apply for authorisations that will make customs processes easier for you.
Decide if you want to hire an import-export agent, or make the declarations yourself.
Contact the organisation that moves your goods (for example, a haulage firm) to find out what information they need to make the declarations for your goods, or if you will need to make them yourself.
Read the guidance on simplified customs procedures for trading with the EU if we leave without a deal.
Further information is provided in HMRC’s advice for businesses trading with the EU.
Preparing to move goods between Ireland and Northern Ireland
If the UK leaves the EU without a deal, goods moving between Ireland and Northern Ireland will face different procedures compared to other UK-EU trade. This approach will apply until longer-term arrangements are made.
Exporting controlled goods
You will need a new export licence if you are exporting dual-use items from the UK to the EU or the Channel Islands.
- Register on the online export licensing system (SPIRE).
- Check how to apply to use the Open General Export Licence.
This new export licence will remove the need for you to apply for individual licences. You can use it immediately after the UK leaves the EU.
Preparing for changes to existing trade agreements
Check the way you currently trade with non-EU countries. When the UK leaves the EU the way you access existing favourable arrangements with these countries may change. Changes may be different for each country.
Read the guidance on changes to trading with non-EU countries that have a free trade agreement with the EU.
Preparing for changes to import tariffs
If the UK leaves the EU without a deal, the UK would implement a temporary tariff regime. This would apply for up to 12 months while a full consultation, and review on a permanent approach, is undertaken.
Under the temporary tariff regime the majority of UK imports would be tariff-free.
In certain sectors, tariffs would be maintained to support the most sensitive agricultural industries, the automotive sector, vulnerable industries exposed to unfair global competition, and to maintain the UK government’s commitment to developing countries.
Regulations and standards
Importing or using chemicals
If you use or import chemicals then you will need to check whether you have new obligations under UK REACH (the Registration, Evaluation, Authorisation and Restriction of Chemicals Regulation).
For example, if you currently purchase a chemical substance directly from an EU/EEA supplier, you must make sure any substances you purchase are covered by a valid UK REACH registration by someone within your supply chain. Otherwise, in order to remain compliant you will need to register as an ‘importer’. To do so, you must:
- open an account on REACH IT once it is established and provide initial information on your registration within 180 days of the UK leaving the EU
- provide full technical information on your registration within 2 years of the UK leaving the EU.
Ensure you can continue to manufacture and export chemical products
There may also be new actions you need to take if you manufacture or export chemicals. Further information is provided on the HSE website.
Employing EU, EEA and Swiss citizens
Right to work checks
You should continue to carry out the same right to work checks on all EU/EEA and Swiss citizens, by using their passport or national identity card, until January 2021.
You will not need to distinguish between EU/EEA and Swiss citizens who were resident in the UK before or after the UK leaves the EU.
EU/EEA and Swiss citizens living in the UK before the UK leaves the EU
If the UK leaves the EU without a deal, EU/EEA and Swiss citizens who are resident in the UK before the UK leaves the EU will be able to apply to the EU Settlement Scheme to get settled or pre-settled status. This will mean they can continue to live, work and study in the UK.
EU/EEA and Swiss citizens must apply by 31 December 2020 if the UK leaves the EU without a deal.
You can use the EU Settlement Scheme guidance for employers to give further information to your employees.
EU/EEA and Swiss citizens who arrive in the UK after the UK leaves the EU
If the UK leaves the EU without a deal, EU, EEA and Swiss citizens arriving in the UK from Exit Day to 31 December 2020 can continue to come to the UK, to live, work and study without applying for a visa in advance.
After free movement ends, if they want to stay for longer than 3 months, they can read the guidance on staying in the UK to find out what they’ll need to do.
Irish citizens can continue to live, work and study in the UK, just as before.
From 1 January 2021, a new skills-based immigration system will launch.
For non-EU nationals, Brexit will not affect the application process for work visas.
Travelling to the EU
If the UK leaves the EU without a deal, British passport holders travelling to the EU will need to have 6 months remaining validity on their passport, not including any extra months added to a 10 year passport if it was renewed early.
Check the county guides to see if there are different business travel and visa requirements for the country you are planning to visit.
Your business will need to make sure it follows data protection law if the UK leaves the EU without a deal.
If you operate across the EU or exchange personal data with organisations in the EEA, there may be changes that you need to make before the UK leaves the EU.
You can also check if you can use standard contractual clauses (SCCs) for transfers from the EEA to the UK.