At 11pm on the 31st December 2020, the UK left the European single market and customs union.
But after more than 6 months of post-Brexit Britain, what are the tangible effects of Brexit on UK companies? In this article, we cover some of the positive and negative impacts Brexit had on UK businesses, and how things are different.
For more general queries that our specialists answer, visit our blogs and FAQs page.
The key effects of Brexit on UK businesses
Here are some key effects of Brexit on UK businesses:
Mixed Effects for UK Businesses – Leaving the EU has had both positive and negative impacts, with the full effects still unfolding. While trade with the EU is now more challenging, opportunities to trade with other markets have increased.
Pre-Brexit Trade Conditions – Previously, the UK was part of a single trading area with the EU. Goods moved freely between the UK and EU, without tariffs, border checks, or documentation requirements.
Post-Brexit Customs Changes – Customs borders now exist between Great Britain and the EU, with main points at places like Dover. Tariffs are avoidable, but documentation and customs checks are mandatory.
Industry Impact – Industries relying on frequent trade with the EU are most affected.
There are also challenges related to worker availability due to new regulations on movement.
Positive impacts of Brexit on UK businesses
Less EU restrictions
After Brexit, the UK is less restricted by some EU regulations. It’s argued that Brexit has had positive impact on UK businesses, by allowing them to trade more freely with non-EU markets. For example America and Australia.
The UK is working to put in place new trade agreements with many non-EU countries around the world.
Opportunity for growth
Emerging markets like China, South Africa and Brazil account for more consumer spending every year. The fall of the pound makes British products cheaper for international markets, which could make them more appealing.
You may want to research which countries need your products and services, and work them into your strategy.
Becoming an AEO
If it can dedicate the resources, a UK business might want to apply for Authorised Economic Operator status. This essentially means you’ll have an easier time moving goods between countries, as you’re seen as ‘trusted’. HMRC awards AEO recognition, and acceptance depends on things like compliance, records, and dedication to customs.
However, becoming an AEO business is difficult, and smaller businesses may prefer to use a broker or agent.
Negative effects of Brexit on UK businesses
Tariffs for British exports
Luckily, the UK secured a post-Brexit trade deal with the EU, allowing UK businesses to continue tariff-free trading. You can read the agreement between the UK and EU in the Trade and Cooperation Agreement (TCA) of April 2021.
However, imported or exported UK goods have to meet specific terms the TCA set out to qualify. Businesses need to demonstrate goods originate from either the UK or EU. If they’re agricultural produce, they need to have grown in British or European soil to be considered originating. If they’re from outside, they need to have been ‘significantly changed’.
If products don’t meet rules set out by the TCA, they can be subject to the UK global tariff or common customs tariff. And even if they meet them, Europeans can be subject to unexpected custom duty charges when buying from the UK.
Claiming the preferential tariff rates can be more effort than it’s worth, and some businesses just pay the customs duty.
Disruption in supply chain
Many companies stockpiled before Brexit, in order to skip tariffs for importing EU goods. To continue good relations between UK and EU businesses, it’s important to offer transparency about any charges or tariffs they may face.
There are also logistical problems with the supply chain – delays haven’t been helped with a pandemic either.
CE Marking Changes
“CE marking is an administrative marking with which the manufacturer or importer affirms its conformity with European health, safety, and environmental protection standards for products sold within the European Economic Area.”
Businesses now have to factor in the new UKCA marking, while before they were just using CE marking.
The CE marking is still relevant for the EU (so if UK companies are selling there – CE is still used), but now products being sold in UK cannot use the CE marking and need to use UKCA marking. The change is being phased in gradually.
Decrease in EU workers
Brexit has been tough on the workforce, with the end of freedom of movement between the UK and EU. Businesses won’t be able to rely on cheap labour, and you may need to invest more in apprenticeships and existing employees.
After the 1st January 2021, non-UK citizens arriving in the UK will also need a work visa. Your business will need to apply to become an approved employer sponsor, in order to still offer work to non-UK citizens. If you have existing EU, EEU or Swiss employees, they will need to apply for settled or pre-settled status to remain working in the UK.
Confidence in the UK
Since Brexit, the FTSE 100 share index has been volatile, and the Sterling rate hasn’t returned to pre-Brexit levels. Confidence in UK businesses will probably continue to be unstable and unpredictable for the foreseeable future.
There are many legal services available to businesses looking to reduce the negative effects of Brexit.
Our thoughts on the impact of Brexit on Businesses
As notaries, we deal with international documents and businesses on a daily basis. Our role is to notarise and certify documents so they’re still able to be used abroad, alongside helping clients legalise them via apostille or embassies.
Here are a few things we’ve noticed at MSC notaries since Brexit and the effects it’s had on businesses we know.
Are we getting more businesses wanting to relocate out of the UK?
“Not so many businesses relocating, but a lot of businesses seem to be opening up subsidiaries in EU countries.”
Is there now more/less paperwork that businesses need notarising?
“On the whole probably a bit more. Whereas before, notarisation wasn’t required for certain documents/processes, some EU countries are now insisting that documents are notarised and/or legalised before being sent. Similarly, a lot of documents that didn’t need to be apostilled/legalised before now require this before being sent to the end user.”
Have costs for notarisation/apostille/legalisation changed since Brexit?
“Per document fees are the same. The volume of documents has increased so clients are finding total costs are higher.”
How has Brexit affected MSC Notaries from a business perspective?
“From a practical point of view, it hasn’t had much impact. However, we are seeing a slightly higher volume of documents coming through which require notarisation and legalisation.”
How can MSC Notaries help businesses after Brexit?
With some businesses wanting to move abroad, we can help notarise and legalise corporate documents for use overseas. We offer a streamlined and professional notary service in London for a wide range of businesses.
If you need help out-of-hours or at your office, we offer a mobile notary service for London and beyond.
Call us on 0208 907 2699 or email info@mscnotaries.com for more information.
Impact of Brexit on UK Businesses FAQs
Do UK businesses need to change data protection for EU clients?
Yes, UK businesses handling EU client data must still comply with GDPR. While the UK now follows its version, called UK GDPR, it remains closely aligned with EU regulations. Businesses working with both UK and EU clients must adhere to both sets of rules to ensure compliance. However, one advantage of Brexit for UK businesses is the ability to adapt data laws more flexibly in the future to suit domestic needs.
What customs documents are required for UK-EU trade post-Brexit?
Post-Brexit trade between the UK and EU requires several key documents, including:
Customs declarations – Containing details of goods, their value, and origin.
Commercial invoices – Listing transaction terms, buyer/seller details, and product descriptions.
Packing lists – Providing information on shipment contents, dimensions, and weight.
Certificates of origin – Needed to verify where products were made and whether they qualify for tariff benefits.
While these processes introduced initial challenges, many businesses have adapted, and some have even benefited from Brexit-driven reforms that simplify trade beyond the EU. The positive impacts of Brexit on UK businesses include greater flexibility in forging global trade agreements and reducing reliance on the EU market.
Is it harder to export food or plant products to the EU?
Yes, exporting agricultural products now involves stricter sanitary and phytosanitary checks, requiring certifications to prove compliance with EU health standards. However, Brexit has also created advantages for UK businesses in the food sector by encouraging expansion into non-EU markets, leading to increased trade with nations such as the US, Australia, and parts of Asia.
Are there support programs for UK businesses to adapt to Brexit changes?
Yes, the UK government offers schemes to assist businesses. The SME Brexit Support Fund provides financial aid and guidance on customs and VAT changes. Additionally, the positive impacts of Brexit on UK businesses include opportunities for deregulation in certain industries, allowing companies to operate with fewer restrictions and take advantage of new trade deals worldwide.
