Frequently Asked Questions about Brexit for Business

Find answers to the most pressing questions you have about the UK’s exit from the EU and how it could impact your business.

These FAQs were last updated in January 2020 and will be updated in February 2020 following the UK’s planned exit from the EU on 31 January.

This is an uncertain time for businesses, so we’ve compiled common queries raised by our business customers into a series of FAQs and tried to detail clear answers and links to more information where relevant.

The questions cover general enquiries, business strategy, operations and business practices, supply chain management, financing and investments.

If you have a question not covered here, please speak to your Relationship Manager or Business Relationship Team.

We have signed the Governments' SME Finance Charter to demonstrate our ongoing support to SMEs through Brexit and beyond. Read the charter to find out more.

Not a business? If you’re a personal customer take a look at our personal Brexit FAQs for the most frequently asked questions on our products and services relating to Brexit.

1. General FAQs

1. How will the revised Withdrawal Agreement impact business?

The bill to implement Prime Minister Boris Johnson’s revised Withdrawal Agreement has been passed by Parliament.

If passed into law by 31 January 2020 it will mark the start of a transition period which will last until at least the end of December 2020, during which time almost all EU law will continue to apply in the UK.

It is not yet known what trade arrangements will be negotiated during this transition period and businesses are advised to plan for a range of scenarios, including reaching the end of the transition period with no agreements in place regarding trade and other areas of cooperation.

Under the revised Withdrawal Agreement, the whole of the UK, including Northern Ireland, will leave the Customs Union, which allows tariff-free trade with the EU. The agreement also removes the controversial ‘back-stop’. Instead, there will be checks on goods at points of entry into Northern Ireland.

‘Level playing field’ provisions around common rules and standards in environmental protection, labour, state aid and competition have been removed from the revised agreement. They are now referred to in the non-binding Political Declaration, which also says the UK and the EU will work towards a Free Trade Agreement.

The British Chambers of Commerce has a Business Brexit checklist advising on areas to consider.

The Government has launched a Get Ready for Brexit website where you can input specific information about your business to get a tailored response on how to prepare.

The European Commission’s Preparedness Notices also give information on potential implications of Brexit across a range of policy areas, as do technical notices issued by the UK Government earlier this year.

See the Government’s Brexit help site
See technical notices on GOV.UK
See the European Commission’s Preparedness Notices


2. I don’t trade with Europe, so Brexit won’t affect me, will it?

Even if you don’t trade with the EU, or countries in the European Economic Area (EEA), you may experience the knock-on effects of any impacts on your suppliers and customers. Brexit is also likely to impact your employees if they are from the EU.

To prepare, you may want to review your supply chain and your customer base, identify any risks and take steps, wherever possible, to mitigate them. You might want to make more use of domestic suppliers, for example.

Whatever your current trade arrangements, review your business strategy in light of Brexit and consider any opportunities it presents too – such as international trade beyond Europe.

You may also want to reassure your EU workers that they are welcome and that they will be able to apply for ‘settled status’ under the EU Settlement Scheme.

To find out more about the opportunities for international trade visit the Lloyds Bank International Trade Portal.

To find out if you are ready for Brexit, whatever your business type, you can visit the Government’s interactive website Get Ready for Brexit


3. How will business travel to Europe be affected by Brexit?

Under Article 45 of the Lisbon Treaty, UK citizens can currently travel and work freely in the EU.

If Parliament  ratifies the Withdrawal Agreement before 31 January 2020, which it is on track to do, the UK will enter a transition period and EU regulations around travel will continue to apply until the end of December 2020, while negotiations between the UK and EU take place.

This means UK travellers won’t need visas to travel to the EU and registered EHICs will still be valid throughout 2020.

Travellers also won’t need to have at least 6 months left on their passport to travel in the EU.

Rules around travel may change following the end of the transition period on 31 December 2020.

See information on passport rules post-Brexit


4. If we go to WTO rules what does this mean for my imports and exports?

If the UK and EU are unable to reach an agreement on trade at the end of the transition period on 31 December 2020, the UK will cease to have a free trade agreement with the EU, so World Trade Organisation (WTO) rules will apply. These rules are complex, but at their simplest they set out that nations must apply the same tariffs on goods and services to all countries that they trade with under WTO rules.

For importers and exporters, this could mean costs will go up as imports and exports to the EU will no longer be tariff-free.

However, the UK could choose to lower tariffs or get rid of them altogether, which could present opportunities for businesses. The UK could also enter into agreements that give developing countries preferential access to our markets. Again, this could open up opportunities.

Another issue to consider is non-tariff barriers – these are things like safety regulations and product standards. If the UK and the EU can’t agree a system for recognising product standards, this is likely to mean more checks at the border.


5. What effect will Brexit have on cards and payments?

Provided the Withdrawal Agreement is passed into law, Brexit will have no effect on cards and other payments between the UK and the EU during the transition period lasting until 31 December 2020. The European Payments Council (EPC) has confirmed that the UK would automatically remain part of the geographic scope of the Single Euro Payments Area (SEPA) during this time.

It is not yet known what agreements on financial services will be reached during the transition negotiations. The EPC has proposed several possible scenarios, including allowing UK payments service providers to continue their participation in the SEPA schemes if the UK remains part of the European Economic Area or establishes a free trade agreement with the EU that meets certain criteria.

You can get help to manage your payments efficiently with Lloyds Bank Payment Services.


6. How will regulation change in a post-Brexit Britain?

Under the EU Withdrawal Act, the vast majority of existing EU laws and regulations will become UK laws and regulations after Brexit, until the end of the transition period on 31 December 2020.

The longer-term future of UK laws and regulation is not clear, however. The Act makes provision to amend, repeal or remove laws as necessary. And it is possible that some rules, such as those on Free Movement, will change under a renegotiated future relationship.

Passporting, the EU system for banks and financial services companies, will also be affected by Brexit. Passporting enables those who are authorised in any EU or EEA state to trade freely in any other state with minimal additional authorisation. These passports are the foundation of the EU single market for financial services. Passports will no longer automatically apply to UK-authorised firms once the UK is outside the EU and the EEA.


7. Will I still have access to the same banking products and services after Brexit?

The majority of Lloyds Bank commercial customers will see no changes to their current products and services after Brexit.

For a small number of clients, certain products may need to be withdrawn and replaced with alternatives or you may need to find alternative providers. For example, if your business is registered or domiciled overseas. If you are affected by any changes related to Brexit, we will have already contacted you where appropriate.

If you have any concerns, you can speak to your Relationship Manager or Business Relationship team.


8. Will the same GDPR regulations still apply post Brexit?

Yes, they will. The General Data Protection Regulation, which came into force in May 2018, covers companies that have EU citizens as customers. Therefore, it will still apply when the UK is no longer a member of the EU.

You can find out more information on the flow of data in the event of a no-deal Brexit from the Information Commissioner’s Office (ICO).

Back to top

2. Business Practices

1. Which sectors are most likely to be affected by Brexit? And will the impact on the service sector be different from that on manufacturers?

Businesses that trade heavily in goods or services with the EU, that are heavily regulated, or that employ substantial numbers of staff from the EU are likely to feel the most significant impact from Brexit.

These are thought to include agriculture, financial services, food and drink, automotive and chemical engineering - however any impact will depend on an organisation’s own circumstances.

 

The Government’s Get Ready for Brexit website covers most sectors. You can input specific information about your business to get a tailored response on how to prepare.

The British Chambers of Commerce also has a Brexit preparation checklist per sector which may help.

See the Government’s Brexit help site
See the British Chambers of Commerce sector checklists
Understand tariffs and how they work


2. What is the Government doing to help businesses prepare for Brexit?

The Government has published various guidance for businesses on how to prepare for Brexit.

In August 2018, it began releasing a series of technical notices that set out detailed advice on a wide range of topics aimed at different industries and sectors. They’re designed to help businesses make informed decisions.

The documents give information on the potential implications of Brexit across a range of topics including farming, fishing, seafaring and medicines.

More broadly, they include implications for companies that import and export and what will happen if the free circulation of goods between the UK and EU ends.

Recent updates include information on what businesses can expect during the transition period. Businesses are advised to check regularly for further notices.

In addition, the Government’s Get Ready for Brexit website allows you to input specific information about your business to get a tailored response on how to prepare. It also highlights actions businesses can start to take now that don’t depend on ongoing negotiations.

See the Government’s Brexit help site
See technical notices at GOV.UK


3. What are technical notices and how can they help my business prepare for Brexit?

Technical notices are Brexit-related documents published by the UK Government. They set out, in considerable detail, how leaving the UK without a deal would impact different issues and business sectors.

The documents cover many UK business sectors and should be of use to businesses in planning for no-deal scenarios. From importing to exporting and meeting regulations, there is advice and guidance if there is no Brexit deal.

It is likely these will be updated, so businesses are advised to check back regularly for further notices.

In addition, the Government has launched a Get Ready for Brexit website where you can input specific information about your business to get a tailored response on how to prepare.

See the Government’s Brexit help site
See technical notices at GOV.UK


4. What is a UK Economic Operator Registration and Identification number and will I have to register for one?

An Economic Operator Registration and Identification, or EORI, number is a unique ID code required by businesses that trade goods with countries outside the EU.

In the UK, an EORI number is allocated to an importer and exporter by HMRC. It provides information to customs authorities as part of EU security measures on shipments.

In the unlikely event that the UK exits the EU without a deal on 31 January 2020, or if a trade agreement isn’t reached by the end of the transition period on 31 December 2020, UK businesses shipping goods to or from the EU would need to follow the same customs procedures as currently apply when trading with a country outside the EU. That means you would need to register for an EORI number.

You can apply online at https://www.gov.uk/eori


5. How will employment rules change for UK-based EU citizens after Brexit?

Around 3.6 million non-UK EU nationals live in the UK. Those already working in the UK can apply for ‘settled status’ to remain indefinitely if they’ve been here for five years.

Those who have been in the UK for less than five years can apply for pre-settled status, and qualify for full settled status once they’ve lived in the UK for five years.

The deadline for applications to the EU Settlement Scheme is 30 June 2021.

If Parliament ratifies the Withdrawal Agreement by 31 January 2020, which it is on track to do, free movement arrangements will remain in place until the end of the transition period on 31 December 2020 and EU citizens will be able to continue to move to and work in the UK.

Post-Brexit immigration arrangements are not finalised.

The Migration Advisory Committee has recommended that the UK’s current points-based system for immigration should be extended to EU migrants, to give more skilled workers more permits.

If you currently employ EU workers, you should consider how the new migration rules are likely to affect your business.

For more information see: https://www.gov.uk/settled-status-eu-citizens-families


6. Is it too late to start planning for Brexit now? And where should I start?

It is not too late to plan. The Government is urging all businesses to Get Ready for Brexit.

The first step is to consider how exposed you are to any risks associated with Brexit. Look at the possible impact on your supply chain, exports, customers and customer demand, stakeholders and workforce. At the same time, explore any opportunities Brexit presents, including to further trade with countries outside of the EU.

The British Chambers of Commerce has put together a Business Brexit checklist highlighting key areas to consider, including future staffing requirements and any potential delays at borders. This can help you put in place measures to mitigate the risks, ensuring you have the skills needed, the correct customs documentation and provisions to cope with currency volatility.

The Government has launched a Get Ready for Brexit website where you can input specific information about your business to get a tailored response on how to prepare.

See the Government’s Brexit help site


7. Who do I need on a business task force to plan for Brexit?

In the same way you would plan for a major incident or takeover, you should consider establishing a core team to manage your Brexit strategy.

According to the CBI, 82% of large businesses – and a third of firms overall – have set up an internal Brexit task force or steering group to project-manage preparations.

To be most effective, your task force should be made up of representatives from key functions across your business, not just senior management. This includes people who deal with the supply chain, procurement, marketing, sales, governance, HR and financial planning.

Smaller companies that don’t have as many resources may wish to bring on board experts from legal firms and business associations to help them gain a greater understanding of what Brexit means for them.


8. Should I plan for Brexit under a deal or for a no-deal scenario?

The UK is on track to leave the EU on 31 January 2020 with a deal in place, after Parliament passed Boris Johnson’s Withdrawal Agreement Bill. However, the agreement still needs to be ratified by both the UK and the EU by 31 January.

There is the potential for the UK to reach the end of the post-Brexit transition period on 31 December 2020 with no trade deal with the EU in place.

This presents a range of different scenarios to plan for.

The Government’s Get Ready for Brexit website gives detailed information on actions businesses can take to prepare for Brexit which do not depend on ongoing negotiations.

The British Chambers of Commerce also has a Business Brexit checklist advising on areas to consider. The Government’s technical notices and the European Commission’s Preparedness Notices are a useful source of information.

See the Government’s Brexit help site
See Technical Notices on GOV.UK
See the European Commission’s Preparedness Notices


9. What are the HR and employee issues I need to plan and prepare for?

It’s unlikely that there will be immediate changes to employment law as a result of Brexit. Much of the regulation is enshrined in domestic law, and powers from EU Directives have been brought under UK law in the EU Withdrawal Act.

However, businesses that employ EU nationals will need to understand the implications of Brexit for workers.

EU workers who are resident in the UK can apply for ‘settled status’ after five years under the EU Settlement Scheme or ‘pre-settled status’ beforehand. The Government has produced a toolkit that employers can use to communicate the scheme to employees.

See the EU Settlement Scheme Employer Toolkit on GOV.UK


10. My business is with the public sector. What impact is Brexit likely to have on my market?

Immediately after Brexit, public procurement rules will remain for the short term, while the UK and EU negotiate the transition period.

It is not yet known how procurement regulations will change following the end of the transition period in December 2020.

It’s possible that the market will be opened up to other countries, which may affect businesses in this country, but in that circumstance UK businesses too may have opportunities to bid for public contacts further afield.

According to Deloitte, public sector bodies are likely to be affected by any tariffs on goods in the same way as private sector bodies.

Another impact they are likely to feel is in staffing – there has already been a steep decline in EU applications for nursing positions, for example. These potential issues may have knock-on effects for companies that do business with the public sector.

Back to top

3. Business Strategy

1. Which export markets are most likely to look favourably on the UK after Brexit?

The EU and countries with which the EU has Free Trade Agreements currently account for 56% of UK exports. However, exports to the US have risen by more than 26% between 2011 and 2016.

In the run-up to Brexit, the UK has been trying to replicate EU trade deals and by December 2019 had secured 20 ‘continuity’ deals covering 50 countries or territories. These include an agreement with the Southern African Customs Union (SACU) and Mozambique, which represents about £2.4bn worth of exports, and agreements with Morocco, Georgia, Switzerland and Central America.

Other countries that may offer export opportunities for the UK post-Brexit include the English-speaking nations, like Canada and Australia, as well as Turkey and the Middle East.

Looking for exporting opportunities? See the Lloyds Bank International Trade portal


2. What can I do to protect my business from Brexit?

The first step you may want to take – if you haven’t already done so – is to carry out a Brexit risk assessment to see if your business has any vulnerabilities. This may also uncover opportunities for your business when the UK leaves the EU.

You might want to look at how different scenarios would impact your business – reverting to World Trade Organisation rules if no trade agreements are reached during the transition period, delays in the supply chain, and issues with recruitment, for example.

Areas to look at include impacts on importing and exporting, your supply chain, taxation, regulation, and your employees.

The British Chambers of Commerce has a Business Brexit checklist showing areas to consider.

You can then do whatever is possible to mitigate risks: for example, ensuring all your customs documentation is in order, making adjustments to your supply chain, and doing what you can to retain your EU employees.

You could also consider exploring alternative banking solutions if the products and/or services we provide you with might be impacted by changes to passporting arrangements. You will already have been contacted if you are affected by these possibilities.

The Government has launched a Get Ready for Brexit website where you can input specific information about your business to get a tailored response on how to prepare.  Include possible need to find alternative arrangements for banking products that may be impacted by a loss of passporting.

See the Government’s Brexit help site


3. What is the Bank of England forecasting will be the likely impact of Brexit?

In November 2019, the Bank of England said that Prime Minister Boris Johnson’s revised Withdrawal Agreement had reduced the likelihood of a no-deal Brexit, which would end some of the uncertainty facing UK businesses and households.

Governor Mark Carney said the proposed Brexit deal had created "the prospects for a pick-up in UK growth".

The Bank expects the annual pace of growth to rise from around 1% at the end of 2019 to over 2% by the end of 2022.

The Bank of England revised its analysis on the consequences of a no-deal Brexit in early September 2019.

Mr Carney, the Governor of the Bank of England, said the new analysis showed a 5.5% reduction in GDP over the next 5 years, a rise in the unemployment rate to 7% over the same period, and inflation peaking at 5.25%. Previous analysis in November 2018 modelled an 8% GDP reduction, unemployment at 7.5% and inflation at 6.5%.

Mr Carney said the change in forecast was ‘the result of the preparations for no deal that have been put in place since November [2018]’.

In previous speeches on Brexit, he has made clear that the Bank of England is prepared for all outcomes and will work to minimise any rise in inflation.

“The Monetary Policy Committee will respond to any persistent change in the outlook to bring inflation sustainably back to the 2% target while doing what it can to support jobs and activity.”


4. The European Regional Development Fund has invested heavily in our region, what is going to happen now?

Under the Withdrawal Agreement, the UK will continue to participate in programmes financed by the current EU Budget until their closure.

Back to top

4. Supply Chain

1. How can I make sure my supply chain is ready for Brexit?

It is difficult to predict how Brexit will impact supply chains, so you can’t ensure you are 100% ready. However, there are some sensible steps you can take.

First, you should conduct a thorough review of your supply chain in order to get a full understanding of your network and where any potential risks lie. For example, if your supply chain crosses the EU-UK border, what will happen if there are delays in the event that no trade agreement is reached at the end of the transition period in December 2020?

You can then test for risks in different Brexit scenarios and identify mitigating actions – such as working with different suppliers, or building in contingencies for any delays.


2. How can I minimise delays when supplying goods post-Brexit?

Delays at the UK-EU border are felt to be one of the biggest potential difficulties of reaching the end of the transition period in December 2020 without a trade agreement in place. Depending on negotiations, from 2021 you may need to follow different customs controls when exporting to Europe to the ones you currently use.

These include registering for a UK Economic Operator Registration and Identification (EORI) number.

You may also need to get an export licence or provide supporting documents to export certain types of goods from the UK.

For detailed information on changes at the UK border, see the Government’s Partnership Pack.


3. Will I have to change my packaging after Brexit?

Like many post-Brexit issues, it depends on any future relationship agreed and what business sector you’re in. For example, the Government has said that EU-based food labelling will more or less be rolled over, although there may need to be changes in labelling related to the origin of food.

There are also plans to set up new geographical indication (GI) schemes with a new UK logo for products like Shetland lamb and Whitstable oysters, regardless of trade negotiations.

However, the pharmaceutical industry may be more impacted if the UK exits the transition period without a trade deal, with new packaging required if drug makers have to reapply for a marketing authorisation.


4. Will my business still have to meet EU safety standards for goods post-Brexit?

To be sold on the EU market, many products have to meet safety standards set out in EU regulations. The CE mark is used on certain goods to show that they meet these standards.

As part of negotiations around a future trade deal, the UK may adopt a ‘common rulebook’ covering standards for goods within the EU, but this is not certain.

Depending on any agreements made during the transition period, after December 2020, products tested for conformity with EU standards by a UK body may not be recognised in the EU – so they may have to be retested in the EU. Obviously, this would involve time and cost.

Back to top

5. Finance and Investments

1. What is likely to happen to sterling and how can I manage my financial risk?

The pound fell to its lowest level in over 30 years after the Brexit referendum. Economists forecast that uncertainty during the transition period and the possibility of not having a trade agreement with the EU in place by January 2021 could see the pound falling in 2020.

If you are importing or exporting, you might want to consider hedging in order to manage currency risk. You may also want to do some contingency planning around a potential rise in the cost of importing raw materials, if sterling falls further.

Another consideration is what currency you are paid in. If you are exporting, you could try to agree prices in advance to protect yourself from any further volatility.

Other financial risks to consider, and plan for as far as possible, include rises in the costs of making payments.

To discuss your business needs, speak to your Bank Relationship Manager or Business Relationship Team.


2. Is now a good time to invest in my business despite the uncertainty around Brexit?

Rather than cancelling investment plans because of uncertainty, you may want to consider them in the light of the changes Brexit could bring about. What are your customers’ needs likely to be post-Brexit? Will Brexit offer you opportunities to explore new markets – by exporting, for example?

Our International Trade Portal can help you explore further.


3. Should we increase our reserves/cash position ahead of Brexit because of all the uncertainty?

Consider whether it’s reasonable to expect trade to be affected by Brexit in the short term. If your business is often immediately influenced by consumer confidence, if you trade significantly with the EU currently, or if you rely on supplies from the EU which may be delayed, then it is reasonable to expect some disruption.

Working to improve your cash position will give you some resilience to short-term shocks, but also potentially allow you to invest in any new opportunities – such as to establish an alternative supply chain, or to step up trade with countries outside of the EU.

This could be a good opportunity to review your cash flow as part of a wider financial health check. Even during periods of so-called stability, the Federation of Small Businesses advises holding cash reserves that would allow your business to operate for three months.


4. What will be the likely impact of Brexit on cross-border mergers and acquisitions for businesses?

Levels of merger and acquisition (M&A) activity are difficult to predict. On the one hand, possible divergence between the UK and the EU around anti-trust laws, potentially separate competition supervisory bodies to be cleared, and generally volatile markets, are all likely to decrease activity.

However, currency fluctuations (notably a weaker pound) and the desire by businesses to establish new geographical bases could see a rise in tactical M&A activity. Share price volatility can also trigger opportunities for some aggressive bids.

Due diligence is expected to take longer post Brexit, and if an agreement cannot be reached between the UK and the EU on aligning competition regulation and anti-trust legislation, mergers and acquisitions could be subject to parallel processes.

Corporate restructuring within a group of companies that crosses borders is expected to become more complex too.

The Government and the House of Lords have created publications in the area of competition regulation and State Aid post Brexit.

The Government has also published a paper on the anti-trust role of the Competition and Markets Authority in the event of a no-deal Brexit.


5. What support is available from Lloyds Commercial Bank to help with Brexit?

You can talk to your Relationship Manager or Business Relationship Team for support around financial planning.

We have also published a series of reports on the UK exit from the EU, looking at different scenarios and how to plan.

For support widening trade beyond the EU you can make use of a range of resources on our International Trade Portal.

Back to top

Legal Information

While all reasonable care has been taken to ensure that the information provided is correct, no liability is accepted by Lloyds Bank for any loss or damage caused to any person relying on any statement or omission. This is for information only and should not be relied upon as offering advice for any set of circumstances. Specific advice should always be sought in each instance.

Back to top

Important legal information

The products and services outlined on this site may be offered by legal entities from across Lloyds Banking Group, including Lloyds Bank plc and Lloyds Bank Corporate Markets plc. Lloyds Bank plc and Lloyds Bank Corporate Markets plc are separate legal entities within the Lloyds Banking Group.

Calls may be monitored or recorded in case we need to check we have carried out your instructions correctly and to help improve our quality of service. Please note that any data sent via e-mail is not secure and may be read by others.

Lloyds Bank is a trading name of Lloyds Bank plc, Bank of Scotland plc and Lloyds Bank Corporate Markets plc. Lloyds Bank plc. Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no.2065. Bank of Scotland plc. Registered Office: The Mound, Edinburgh EH1 1YZ. Registered in Scotland no. SC327000. Lloyds Bank Corporate Markets plc. Registered office 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 10399850. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278, 169628 and 763256 respectively.

Eligible deposits with us are protected by the Financial Services Compensation Scheme (FSCS). We are covered by the Financial Ombudsman Service (FOS). Please note that due to FSCS and FOS eligibility criteria not all business customers will be covered.

Lloyds Banking Group includes companies using brands including Lloyds Bank, Halifax and Bank of Scotland and their associated companies. More information on Lloyds Banking Group can be found at www.lloydsbankinggroup.com

While all reasonable care has been taken to ensure that the information provided is correct, no liability is accepted by Lloyds Bank for any loss or damage caused to any person relying on any statement or omission. This is for information only and should not be relied upon as offering advice for any set of circumstances. Specific advice should always be sought in each instance.