Funding Advisory Hub

Bishop Fleming Funding Advisory Service

Our Funding Advisory Hub, curates insights and expertise together in one place, to assist your company in raising finance.

Brexit and the labour market

1st July 2020

At the start of January 2020, the biggest question facing the labour market was: “what would the impact of Brexit have”?

The transition period (which will end on 31 December 2020) calmed these queries for a period and any concerns over the impact of Brexit have largely been quietened with the change of focus caused by COVID-19.

However, with Brexit talks now restarting in earnest, it is imperative for a deal to be agreed within the next six months to avoid Britain leaving the EU on a no deal basis. 

The overall impact of Brexit on employment and the labour market will depend on economic factors as well as migration flows.  

The UK has already said that it will delay implementing full-scale border controls until July 2021, and will introduce these controls in three phases (starting in January 2021) due to the pressures already suffered by businesses from the COVID-19 pandemic.

With negotiations underway, it will be interesting to see if agreement can be reached on achieving a “level playing field” as requested by the EU in areas such as state aid, competition law and labour and environmental regulations. 

HMRC now has a checklist on its website to help businesses and individuals get ready for Brexit. This checklist can be found here.

A summary of the key points on travelling and working between the UK and EU is provided below. This will be updated depending on the current negotiations taking place. 

EU Settlement scheme

Up until 30 June 2021, the rights and status of EU, EEA and Swiss citizens living in the UK will not change. From that date, in order to continue living in the UK, these citizens will need to apply under the EU Settlement scheme.

If their application is successful, they will get either settled or pre-settled status to remain in the UK. 

If these citizens already have indefinite leave to enter or remain in the UK, an application under the EU Settlement Scheme is not required. 

The scheme is open now and the deadline for applying is 30 June 2021. Any businesses which employ EU, EEA or Swiss citizens should review their workforce and ensure their employees are applying now, bearing in mind that there are significant delays in processing applications due to COVID-19. 

Immigration system from 1 January 2021

It was expected that the government would introduce a new ‘points-based’ immigration system to come into force from 1 January 2021 when freedom of movement between the EU and the UK is due to end.  This scheme was expected to make it difficult for low-skilled workers to come to the UK, due to a salary threshold requirement. 

As a result of COVID-19 and the well-publicised issues with getting sufficient seasonal farm workers to pick the harvest, this system has now been set aside.  

It will be interesting to see what other changes are made, bearing in mind the need to fill positions in the care, food and hospitality industries. 

Immigration Health Surcharge

Most non-EEA nationals applying for temporary leave to remain in the UK must pay an Immigration Health Surcharge (HIS) to the Home Office, in addition to the immigration application fee.

This is scheduled to increase from £400 per year (£300 for some visa categories) to £624 per year from October 2020 (£470 for some visa categories). It will also apply to EEA nationals moving to the UK after the Brexit transition period. 

There are potential plans for an “NHS visa” to be created, and Prime Minister Boris Johnson has stated that the surcharge will be abolished for all NHS workers. 

Travelling to the EU

Whilst the transition period is in place, travel between the UK and Europe has largely remained the same. 

From 2021, you will need to ensure you have at least 6 months left on your passport, and this must be less than 10 years old.

No visa will currently be required for short visits (up to 90 days in any 180-day period). A visa will be needed to remain in the EU for longer. 

In addition to the above, from late 2022, travelers will need to apply for an ETIAS (European Travel Information and Authorisation System) visa waiver. This is similar to an American ESTA and is expected to cost around £6 and will be valid for several years.  This is conditional on there being a reciprocal arrangement for EU nationals visiting the UK (expected to be the eTA visa waiver). 

Currently, if you go on holiday to the EU, the European Health Insurance Cards (EHIC) will give you state-provided medical treatment if you fall ill or have an accident in any EU country, Switzerland, Norway, Iceland and Liechtenstein. The EHIC provides cover for pre-existing medical conditions and routine maternity care as well as emergency care. 

The EHIC will remain valid during the transition period and it is hoped that this will be retained after this period (or for there to be a similar health scheme offering free or subsidised healthcare).

Until more is known about this, the current advice is to get appropriate travel insurance before you go abroad.  These also cover pre-existing medical conditions and routine maternity care as well as emergency care.  

Drivers with a full driving licence and wishing to drive within the EU may also need an international driving permit to drive in certain countries. In addition, those wishing to drive their own vehicle will need to carry a Green Card and a GB sticker for UK car insurance to be applicable. 

Other issues to consider, from 1 January 2021 include:

  • There will be different entry requirements for business travel, and country guides can be found on the HMRC website.
  • Businesses will need to make a customs declaration if goods are taken with you to sell abroad. 
  • If you are working abroad, you will need to check if your qualifications will be recognised in the EU for professional services
  • The social security position will need to be checked for each country in which you work. There may also be a requirement to notify HMRC. 
  • Indemnity insurance may be needed for your employees
  • Consider what action may be required with respect to handling personal data between the UK and the EU, if the EU has not made an adequacy decision by 31 December 2020. An adequacy decision would enable the unrestricted transfer of personal data to continue, subject to GDPR compliance. 
  • Free roaming of mobile phones will end throughout the EU, Iceland, Liechtenstein and Norway. Roaming charges will need to be checked with your phone operator
  • Taking cash of £10,000 or more between the UK and any other country will need to be declared.
  • Travel for pets will take at least 4 months to arrange. 
     

If you would like to discuss these issues, please contact a member of our Personal Tax or International Advisory teams, or your usual Bishop Fleming advisor in the first instance.

Keep up to date

Key contacts

Related insights