Frequently Asked Questions

We have collated a list of FAQs that our customers and stakeholders have asked us around the topic of Brexit, which we hope you will find helpful. These have been categorised into three headings which are outlined below. Both the questions and answers are subject to change and will be updated as appropriate as more information and clarity about Brexit becomes available.

Introduction to the FAQs

We have collated a list of FAQs that our customers and stakeholders have asked us around the topic of Brexit, which we hope you will find helpful. These have been categorised into three headings which are outlined below. Both the questions and answers are subject to change and will be updated as appropriate as more information and clarity about Brexit becomes available.

Explore the range of guidance we offer through the links below.

What is Brexit?

Britain exiting the European Union (EU), or Brexit in shorthand, was the result of the 23 June 2016 referendum vote by the British public when 51.9% voted to leave.

Read More

On 29 March 2017, the UK Prime Minister (PM) triggered the withdrawal process (Article 50 of the Lisbon Treaty), formally beginning the UK’s exit from the EU. Under this treaty, the UK’s exit from the EU will occur exactly two years later – 29 March 2019.

What is meant by 'Deal or no Deal'?

When considering whether a ‘Deal or No Deal’ has been agreed for the UK to exit the European Union (EU), it is important to clarify that this refers to whether or not the ‘Withdrawal Agreement’ has been agreed and ratified.

Read More

This Agreement aims to set out the arrangements for the UK’s withdrawal from the EU. The key areas of focus within the ‘Withdrawal Agreement’ include, issues of citizens’ rights, financial contributions and the Irish border. Additional information on the transition period and a high level statement on the overarching trade deal is included within the agreement. Note, the UK’s future relationship with the EU is being negotiated in a separate agreement which will be entered into once the UK has left the EU.

It is important to highlight that both a ‘Deal’ or ‘No Deal’ outcome are substantial changes compared with the status quo of the UK being part of the Single Market and Customs Union.

Single Market

This market allows the free movement of goods, services, money and people within the EU which helps boost trade, create jobs and lower prices. In practice, it requires significant regulation to make it work as, for example, products must be made to the same technical standard and general level playing field rules have to be imposed across each Member State.

Customs Union

This union ensures that all EU Member States charge the same import duties to countries outside the EU. This allows Member States to trade freely with each other, without customs checks at borders.

So what is an Exit Deal or No Exit Deal likely to look like?

Exit Deal

Securing a ‘Deal’ will bring certainty for citizens and transition for businesses. However, as outlined earlier, it will not resolve the nature of the future economic partnership and involves major change from the status quo. The spectrum of future arrangements is likely to lie between the ‘Chequers Plan’ and the ‘Canada-Style’ partnerships.

Chequers Plan

This plan was created by Theresa May’s Cabinet in July 2018 and is the Government's preferred way forward. It includes proposals for the UK to mirror EU rules on goods, to have joint jurisdiction between the UK and EU, for borders between the UK and EU to be treated as a combined customs territory and for the free movement of people to end and be replaced by a ‘mobility framework’.

This framework would allow UK and EU citizens to travel to each other’s territories, and apply for study and work. In addition, the UK would be free to strike its own trade deals with countries around the world - something it is currently unable to do as a member of the EU.

Canada-Style

The EU judges that because the UK is leaving the Single Market and Customs Union, what it can offer is a Free Trade Agreement similar to the EU-Canada Comprehensive Economic and Trade Agreement (CETA), which was signed in 2016.

CETA removed 99% of customs duties on EU exports to Canada and vice versa, and allows EU companies to bid for public contracts in Canada. But, under the deal, Canada is not obliged to pay into the EU budget, sign up to free movement or abide by European Court of Justice (ECJ) rulings.

This ‘Canada-Style’ arrangement is very different to our current situation as we currently don’t incur custom duties with the EU.

No Exit Deal

Without a withdrawal agreement the UK would immediately move from being in the Single Market and Customs Union to trading under World Trade Organisation rules. This very significant change would result in customs checks, tariffs on goods, a regulatory block to trading with the EU in some areas, denied access to EU research/ funding programmes and the end of free movement between the UK and EU.

The UK Government has outlined that it remains confident that a ‘Deal’ can be reached and ratified through respective Parliamentary processes. On Sunday 25 November, the UK Prime Minister and EU 27 leaders have ratified the terms of the ‘Withdrawal Agreement’. However, it is important to note that this is yet to be ratified by the British Parliament, with a vote expected in December.

The Government has also produced guidance on how to prepare for Brexit if there is a ‘no deal’ outcome – documentation that we would encourage all NI businesses to review in more detail.

What timelines should we be aware of?

The key date is Friday, 29 March 2019, specifically at 11pm, when the UK will leave the European Union (EU). An extension to this date is unlikely and would have to be requested by the UK and agreed with the other 27 EU Member States.

Read More

The following deadlines are subject to change as a result of a final ‘deal’ not having yet been agreed or ratified:

November 2018

  • A ‘Withdrawal Agreement’ has been agreed between the EU negotiators and the UK cabinet.
  • This ‘Withdrawal Agreement’ was ratified at an EU Summit on Sunday 25 November between the UK and the EU 27 National Leaders.

January 2019

  • Under the EU Withdrawal Act, by the 21 January, the Government is required to make a statement on whether or not a ‘Deal’ has been reached. If ‘No Deal’ is agreed, the Prime Minister is required to explain the situation to Parliament.

December 2018

  • The UK must gain Parliamentary approval through the House of Commons and the House of Lords, in order for the ‘Withdrawal Agreement’ to be formally ratified.

29 March 2019

  • At 11.00pm, the UK leaves the EU.
  • At 11.01pm, if a ‘Deal’ has been agreed then a transition period begins which is set to run from March 2019 to December 2020.
  • Free Trade Agreement negotiations with non-EU countries can begin.

What is happening with the Irish Border?

Trade between Northern Ireland (NI) and the Republic of Ireland (ROI) is significant, with the value of goods exported from NI to ROI reaching £2.9bn in 2017, with imports from ROI into NI accounting for £2.1bn (HMRC).

Read More

The border between NI and ROI has been one of the major issues of discussion during the Brexit negotiations. The Centre for Cross Border Studies estimates that up to 30,000 people are cross-border workers, in that they live and work on different sides of the border. Both the UK and European Union (EU) are in agreement that they want free cross-border flow of trade and people. However, both parties have yet to agree on how to achieve this outcome.

A contingency plan has been proposed called the ‘Backstop’ arrangement which would avoid a hard border between NI and ROI. A ‘Backstop’ has been included within the ‘Withdrawal Agreement’ which has been ratified by the EU 27 at Sunday 25 November’s EU Summit. This Backstop, however, would only come into effect should the UK and EU fail to agree a future, overarching deal.

What is the Impact on Markets and Regulation?

Financial Markets

The Financial and Professional Services industry in Northern Ireland (NI) supports 52,000 jobs (NISRA), with Belfast being ranked as the 10th most important Financial Services city in the UK outside of London ('TheCityUK').

Read More

Of particular importance for this sector will be the volatility of financial markets e.g. currency and interest rates which are both sensitive to the nature of the decisions being made in relation to Brexit. Markets, and in particular the currency markets, will react to any level of uncertainty which can create an instant financial impact on businesses.

It is not possible to predict with any certainty what will happen to Sterling as we approach Brexit. However, it is important to be aware of the impact of different Brexit scenarios on the markets. For example, companies should understand their currency exposure i.e. look at what they buy and sell in Euro and identify if contracts allow for currency fluctuations, and if not, how can they manage this risk. Consulting with financial advisers and banks will provide some insight into how to manage potential risks even if they cannot be fully mitigated.

Regulation

Highly regulated sectors such as Financial Services, Agri-Food and Life and Health Sciences need to be more alert to regulatory changes that may arise from Brexit.

NI businesses operating within such regulated sectors should assess how Brexit may impact their business, specifically focusing on how the regulatory environment, which is currently largely driven by the European Union (EU), may change. Time is of great importance for this sector given the perishable nature of the products, so even small changes in customs arrangements may cause significant impact.

The ongoing alignment to EU standards or how the UK rectifies differences in standards over time are the key issues which will be resolved through the UK and EU developing a future economic partnership. Some important EU regulations to monitor as Brexit progresses include:

 

  • Intellectual Property: With regards to the impact of Brexit on Intellectual Property (IP), the UK Government has outlined within the white paper that they plan to remain within the Unitary Patent System and the Unified Patent Court that underpins it. Further information can be found on Gov.uk - IP and Brexit: The facts.
  • GDPR: When Brexit comes into effect on 29 March 2019, the UK won’t be subject to GDPR in the way that Member States, including the UK and NI therein, are currently. However, NI businesses with any EU citizens as customers will need to comply with GDPR requirements. UK legislation entitled the 2018 Data Protection Act which seeks to replicate the conditions of GDPR in a British legal framework received Royal Assent on 23 May 2018. NI businesses will therefore need to ensure they are compliant with this new Data Protection Act.

Funding

The UK Government has set out guarantees for EU funded programmes should there be no Brexit deal. This guarantee ensures that UK organisations “will continue to receive funding over a project’s lifetime if they successfully bid into EU-funded programmes before the end of 2020”.

What is the Impact on Trade and Customs?

According to HMRC’s Regional Trade Statistics for the year ending 2017, Northern Ireland (NI) exports were valued at £8.7bn, with the European Union (EU) accounting for 57% in terms of destination markets.

Read More

In addition, 33% (£2.9bn) of NI’s total exports are destined for ROI. The top 3 exporting sectors in NI were, ‘Machinery and Transport’ (33% share of total exports), ‘Chemicals and Related Products’ (16% share of total exports) and ‘Food and Live Animals’ (15% share of total exports).

For the year ending 2017, NI Imports were valued at £7.4bn with 64% coming from the EU. 28% (£2.0bn) of NI’s total imports come from the ROI. From a sector perspective, the top 3 importing sectors were ‘Machinery and Transport’ (25% share of total imports), ‘Food and Live Animals’ (20% share of total imports) and ‘Manufactured Goods’ (17% share of total exports).

In the period between 2013-14 and 2017-18 inward investment projects secured by Invest NI averaged at 276 projects per year, with a peak in 2014-15 of 340 projects. These projects included job creation, R&D, skills and trade development activities. Invest NI research shows that almost ¾ of new inward investors have reinvested in NI.

For NI to be outside both the Single Market and Customs Union means that goods crossing any border would need to have duties and VAT applied, meet country of origin criteria and satisfy regulatory standards. Finding a way to achieve this level of regulation without physical checks at border points may be difficult.

An important regulation supporting trade within the EU is the Mutual Recognition Regulation. This regulation is defined by NI business info as, “the principle of EU law under which member states must allow goods that are legally sold in another member state also to be sold in their own territory”.

The UK Government has provided guidance on the impact to this principle in a ‘No Deal’ Brexit scenario, stating that the UK would “no longer fall within the scope of the mutual recognition principle”. For NI businesses exporting non-harmonised goods to the EU market they will need to meet the national requirements of the first EU country they export to.

From a trade perspective, Brexit will impact all businesses. Those most affected will include businesses that;

  • Sell or buy high volumes of goods or services to/from the EU.
  • Have highly integrated UK-EU supply chains.
  • Are heavily reliant on the EU for staff.
  • Operate in highly regulated areas.
  • Benefit from EU Research and Development grants and other funds.

NI businesses should assess their exposure to Brexit through understanding how trade will be impacted and implementing plans to reduce risks and seize linked opportunities.

What is the Impact on People and Immigration?

The free movement of people has been a cornerstone of the UK’s membership of the European Union (EU) and has played an important role for business. Both the UK and EU are committed to protecting the status of citizens in both territories.

Read More

As a result of the transition period, nothing material is likely to change for nearly two years. However, negotiations on the UK’s access to the Single Market will impact the immigration status of employees across both the EU and UK in some way. The Government has indicated that any new immigration arrangements will be phased in.

A Social Market Foundation report, published in 2016 outlined that 7% of all Northern Ireland (NI) employees were born in the European Economic Area (EEA), which makes NI second behind London (12%) in terms of reliance on the EEA for employees.

The Common Travel Area (CTA), which is the arrangement between the UK and Ireland that permits ease of travel amongst other reciprocal rights in each other’s countries, will remain. The associated rights and entitlements of the CTA includes access to employment, healthcare, education, social benefits, as well as the right to vote in certain elections.

NI businesses can still employ EU nationals whilst negotiations are ongoing. EEA nationals can still work for any employer in any role according to current EU law and employers are under a duty to not discriminate against workers based on their nationality.

Key to minimising NI businesses disruption is understanding who within the labour force is impacted and what the future talent pipeline looks like. Businesses should consider the pipeline of skills and talent within firstly their own labour market and secondly their supply chains labour market and, in turn, reflect on how this impacts medium to long-term business goals.

Other employment issues which NI businesses should be reviewing within the context of Brexit include:

  • National Minimum Wage: The national minimum wage is a UK Government initiative and is higher than that in similar European systems. Additionally, the UK Government recently introduced the National Living Wage. Within NI, 12% of jobs in 2017 were paid at or below the minimum wage, versus 6.7% for the UK as a whole. However, while this would imply that NI businesses are particularly affected, no material changes are expected in this regard as these are UK Government rather than EU initiatives.
  • Transfer of Undertakings (TUPE): The revised TUPE regulations came into operation on 6 April 2006. The UK has gone further than the EU in terms of TUPE and when it applies, therefore Brexit is unlikely to impact the existing regulations.
 

Why would I act now when we don’t know what the outcome will be?

Brexit does feel very uncertain. That's in its nature, but so are technological advances, and businesses don't know exactly where technology might end up in the future, but it doesn't stop them thinking about it.

Read More

Brexit does feel very uncertain. That's in its nature, but so are technological advances, and businesses don't know exactly where technology might end up in the future, but it doesn't stop them thinking about it.

For example, we know that freedom of movement will come to an end. Therefore, if Northern Ireland (NI) businesses currently rely on European Union (EU) workers a lot at the moment, and also rely on being able to move people around Europe, this is one change that is going to take place within the next few years.

While uncertainty remains on the specifics, there are a range of preparations businesses can be implementing regardless of whatever eventuality emerges – with a summary of some of the key suggested actions covered below.

I’m a UK only company, I don’t do business in Europe, so why would it affect me?

Firstly, your business might not trade with the European Union (EU), but what does the workforce look like? Most businesses across Northern Ireland (NI) are going to have some employees who are originally from the EU.

Read More

Or what about your supply chain organisations? Perhaps they do. Any delays and costs incurred through supply chains could well become delays and costs for your business too.

With so much uncertainty, are there any actions I can take now to help my business prepare for Brexit?

‘Deal or no Deal’ Actions

Regardless of which Brexit scenario materialises, there are a number of actions which Northern Ireland (NI) businesses should be considering now to lay the groundwork for their future trading post-Brexit. These include:

Read More
  1. Be agile - prepare for the various outcomes now, so you can respond to new developments, as they occur. Where appropriate, consider creating a dedicated governance body to be accountable for understanding what different Brexit scenarios mean for your organisation.
  2. Support your staff - work with affected groups to provide support, plan and prepare for Brexit changes.
  3. Understand your supply chain - understand where and how your business buys and sells products and services. This will enable you to understand the impact of any new trade model and prepare to change current practices where required.
  4. Clean up and capture more data - data will be key regardless of the final Brexit deal. Make sure your data is accurate, appropriately classified and stored now, to make day 1 post-Brexit easier. Should imports require declaration of additional data for the processing of customs clearances, NI businesses should be capturing the customs origin and value of products to take advantage of any Free Trade Agreements.
  5. Review existing contracts - the legal change that will result from Brexit will impact contracts placed under European Union (EU) law. Businesses should identify contracts where there are the biggest financial and operational impacts.
  6. Engage with third parties - you can put yourself in a strong position by staying close to other organisations and stakeholders (for example banks or insurers) that are most important to you. It’s not just your own readiness, but the readiness of all your partners that will matter.

What should my business be considering in getting ready for Brexit?

Northern Ireland (NI) businesses should consider the following 4 areas in relation to getting ready for Brexit:

Read More

Markets and regulation

How will Brexit affect the UK economy and market demand?

  1. Macroeconomics: - for example, what plans do you have in place to manage volatility in the value of sterling?
  2. Market opportunity: for example, what new product/market opportunities does Brexit open up for you? Or how will it impact your competitors?
  3. Reputation: for example, what sources of regulation are significant for your business at present and are they likely to change?
  4. Funding: for example, do you receive R&D funding from the EU or from organisations based in the European Union (EU)?

Trade and customs

What impact will changes on trade have on cost, administration and time within your business?

  1. Current state: for example, do you know the proportion of your sales and purchases with counterparties in the EU? Or if you’re trading with suppliers or customers in countries who currently have a trade agreement with the EU?
  2. Supply chain risk: for example, have you engaged with your suppliers? Or do you have contingency options in place?

People and immigration

How will changes to immigration impact your business?

  1. Workforce compositions: for example, do you know how many EU and non-EU personnel you employ directly? Or how reliant your business and your supply chain are on labour from the EU?
  2. Workforce planning: for example, have you conducted scenario planning to understand the risks and impacts on your business critical functions due to uncertainty in personnel? Or do you have a location strategy should your geographical footprint need to change?
  3. Mobility: for example, how mobile is your workforce? Or are you supporting your existing employees to secure their status in their current country of residence?

Governance and mobilisation

How are you organising your response to Brexit?

  1. Governance: for example, who is responsible for mitigation planning? Or does management understand plans to manage the risks and opportunities presented by Brexit?
  2. Tracking: for example, do you understand the range of possible Brexit outcomes? Or does your contingency plan meet industry regulator guidance (if available)?
  3. Communications: for example, how are you communicating your businesses Brexit strategy internally?

Agri-food

The Agri-Food sector is a significant contributor to the health of the Northern Ireland (NI) economy from both an employment and exports perspective.

Read More

Department of Agriculture, Environment and Rural Affairs (DAERA) statistics show that in 2017 there were nearly 25,000 farms in NI supporting over 48,000 jobs. In addition, NI’s food & drink processing sector turned over £4.5bn in 2017 reflecting the importance of this sector to the NI economy.

In relation to trade, the UK and Ireland Agri-Food sectors are interconnected, with each being the others largest export market for food and drink. ‘Bord Bia’ (Irish Food Board), outlined that 37% of ROI’s food and drink exports are to the UK.

From an NI perspective, each year 680,000 tonnes of food flow into NI from GB, and 680,000 tonnes flow in the opposite direction, NI to GB. In addition, InterTradeIreland statistics show that in 2016 within the food, drink and tobacco sector, trade from NI to ROI accounts for £640m and from ROI to NI £508m.

The Agri-Food sector relies on European Union (EU) subsidies given largely through the EU’s Common Agricultural Policy (CAP) scheme. Agriculture in the UK datasets outline that in 2016 NI received €379m in CAP payments with DAERA reporting that CAP payments provided 60% of cash income to NI farms in 2014-15.

Considerations for NI businesses

  • How will your labour force be impacted by currency volatility and changes in regulation which may result in non-UK nationals being unable to work in the UK after Brexit? Will seasonal demand for labour be met?
  • What impact will tariffs have on your cost margins should they come into effect after Brexit?
  • Have you completed a risk assessment of your supply chain?
  • From a regulatory perspective, UK food standards currently mirror those of the EU. How might changes in these standards impact your business?
  • How will potential changes to physical, human and legal infrastructure within this space impact your business?
  • Can your business adapt to new regulations which may add time and costs to the movement of your goods across territories?

Life and Health Sciences

The House of Commons report on the Pharmaceutical Sector published in 2018 outlined that within the UK this sector has a turnover of £41.8bn, employees greater than 113,000 and contributes 7.7% of Manufacturing GVA.

Read More

In 2016, the UK exported £24.9bn of pharma products, of which 48% went to the European Union (EU). The Association of the British Pharmaceutical Industry (ABPI) outlined that on a monthly basis, 37m packs of medicine arrive in the UK from the EU, with 45m moving the other way.

ABPI report that this sector employs 8,400 people across 170 companies within Northern Ireland (NI).

Considerations for NI businesses

  • If a ‘No Exit Deal’ outcome occurs, how will your business be impacted by tariff changes should the UK move to WTO rules?
  • If the UK adopts alternative clinical trial regulations what impact may this have on approvals to access the EU market?
  • Should the UK not be covered by the Unitary Patent System, what impact could lengthier and more costly patent disputes have on your business?
  • Have you considered the impact on R&D funding post-Brexit?
  • What other trade opportunities may emerge post-Brexit?

Financial and Professional Services

The Financial, Insurance and Professional Services Sectors within Northern Ireland (NI) supports around 52,000 jobs, accounting for approximately 7% of jobs across the region.

Read More

A large proportion of these jobs are concentrated around Belfast. In addition, the most recent GVA data released by the ONS stated that these sectors collectively generated £2.9bn to the NI economy in 2016, which is around 8% of total regional GVA.

For NI the recent expansion in the Financial, Insurance and Professional Services Sector in particular can be explained by the region’s strategic position and close proximity to London, as well as acting as a supporting hub for financial activity along the East Coast of America through to Europe, the Middle East and Asia. Supporting hub activities for example include professional services firms in Belfast holding a large proportion of back-office jobs for London based companies.

A significant regulatory change within this sector focuses on the potential loss of ‘Passporting’. ‘BBA’ (British Bankers Association) outline that this regulation enables firms that are authorised in any EU or EEA state to trade freely in any other with minimal additional authorisation. When the UK leaves the EU it will no longer be covered by these Passporting frameworks and it is important that businesses within these sectors firstly recognise this and secondly prepare for the impact of this change on their business.

Considerations for NI businesses

  • Have you considered the impact of interrupted data flows in relation to GDPR for your business?
  • Are there opportunities to collaborate with firms in the ROI?
  • How will potential changes in passporting rights impact your business ability to grow post-Brexit?
  • How will different Brexit outcomes impact your business model? For example, cross-border client-facing activities?

Manufacturing

In 2018, Northern Ireland's (NI's) manufacturing sector supported around 86,500 jobs, accounting for approximately 11% of employee jobs.

Read More

ONS estimate the sector contributes around £5.9bn to the NI economy, which is around 15% of total GVA. From an exporting perspective, HMRC data in 2017, highlighted that NI’s manufacturing sector exported goods to the value of £5.0bn, with £2.6bn destined for European Union (EU) countries and £2.4bn to Non-EU.

Considerations

  • Have you assessed your skills needs (e.g. high-grade engineers) for further growth and expansion in your operations?
  • If you currently have supply chain linkages with EU firms, have you taken into account potential changes in exchange rates and the impact this will have on the price of your inputs?
  • Have you considered buying inputs from firms located outside of the EU, which could be more cost effective?
  • Have you considered other target markets, outside of the EU, for exporting your goods and services?
  • Have your cost projections taken account a scenario with higher tariffs on exports?

Latest News

6
Features
News
HMRC advice for firms trading with the EU
David Roberts, Invest NI Economist
Dec 06, 2018
Brexit looms large over Autumn Budget
David Roberts, Invest NI Economist
Nov 02, 2018
A week in the life of Brexit
David Roberts, Invest NI Economist
Jul 19, 2018
EU Settlement Scheme Announced - Securing Rights of EU Citizens in UK
David Roberts, Invest NI Economist
Jun 22, 2018
Unpicking the EU negotiations
David Roberts, Invest NI Economist
Mar 15, 2018
How can you plan for the unknown?
Olive Hill, Executive Director of Strategy
Feb 22, 2018