The UK's departure from the EU

On 31 January 2020 at 23.00 GMT the UK formally left the European Union following the ratification of the Withdrawal Agreement and passage of the Withdrawal Agreement Act 2020 in the UK Parliament.

As set out in the Withdrawal Agreement the UK entered into a transition period that will last until 31 December 2020.

During this transition period the UK will continue to participate in the EU Customs Union and the Single Market (with all four freedoms) and follow all union policies.

Unless explicitly specified within the Withdrawal Agreement businesses should consider the transition as a period of no change, until this period elapses on 31 December 2020.

The end of the transition period will be a moment of great change for UK and EU based businesses, whatever the outcome of the free trade agreement negotiations.

As the new relationship takes effect there may be some disruption. techUK remains in close contact with the UK Government to alert them to any impacts on businesses, please get in touch with any impacts that you are facing at [email protected]

techUK will seek to provide guidance and support to members and the wider UK tech sector to prepare for the end of the transition period as well as to adjust to the new relationship, whatever form it takes.

What will the UK – EU future relationship look like?

During the transition period the UK Government is seeking to negotiate a UK-EU free trade agreement as part of the future relationship between the UK and the EU.

Both the UK and the EU have set out proposals for what this free trade agreement will look like.

The UK Government’s command paper and the EU Council’s draft agreement point to an envisaged partnership based on a comprehensive free trade agreement, similar to those that the EU has with Japan and Canada.

The result of this, is that while such an agreement would reduce barriers to trade and eliminate tariffs and quotas, agreement based around a comprehensive free trade agreement will be a significantly less open trading arrangement than the UK had when a member of the EU.

Businesses will therefore need to prepare to facilitate import and export declarations as well as fulfil customs processes irrespective of whether there is a deal on this basis or a non-negotiated outcome.

For details of how goods will be treated at the UK border, please see the UK Government’s future border operating model here.

How can I prepare for the end of the transition period?

The transition period will end on 31 December 2020. There is no obvious legal route for an extension of the transition period beyond this date.

Both the UK Government and European Commission have also stated that they do not envisage a further implementation period beyond 31 December 2020.

This means that unless otherwise stated, both UK and EU based companies must prepare for the full implementation of new business arrangements in the event of a deal, or in the event of a non-negotiated outcome, on 1 January 2021.

Additional detail on how to prepare for the end of transition can be found at gov.uk/transition or through technical notices issued by the European Commission.

New notices and updated information will likely be released by the UK Government and European Commission as negotiations continue.

Business should continue to monitor the gov.uk/transition and Commission’s Brexit preparedness page and more information and links to reasources can be found on techUK's 'how does the tech sector prepare?' page.

*Please note individual EU member states and UK Devolved Governments may also have Brexit preparation advice and local schemes for companies based in those jurisdictions.

What about data adequacy and financial equivalency:

As part of the future relationship discussions the UK Government is seeking data adequacy and financial equivalency assessments from the EU.

Data adequacy and financial equivalency are recognition processes run by the EU to determine whether a third county's rules on data protection and financial services are equivalent to EU rules.

If the EU finds there is equivalence then personal data and financial services can be exchanged with EU member states and the EEA on privileged terms, with higher levels of market access than a non-equivalent third country.

These assessments are unilateral processes carried out by the EU and are separate to the free trade negotiations.

An explainer on data adequacy and the future relationship from techUK can be found here.

While guidance from the ICO on personal data transfers after the transition period can be found here.

Information from the UK Government on financial equivalency can be found here, while guidance on EU exit and financial services from the Bank of England can be found here.

The UK Government and the EU committed to reaching decisions on data adequacy and financial equivalence in the Political Declaration.

Decisions on data adequacy and financial equivalency will need to be reached by the end of the transition period. If these are not reached by the 31 December 2020 deadline, personal data and financial services will be traded with the EU on third country terms.

How will the movement of people work between the UK and the EU after the transition period:

After the transition period the freedom of movement for UK and EU citizens between the UK and EU Member States will end. 

Through the negotiations the UK and the EU will seek to agree movement rights for workers and for short term stay. If a deal is reached this will allow fly-in fly-out services as well as the intra-transfer of employees within companies which operate across both the UK and the EU.

For long term stay and residency the UK Government will implement a new points-based immigration system from 1 January 2021. Further details on this can be found here.

EU citizens resident in the UK should seek to apply for the EU settlement scheme. This a free scheme which can be applied to up until 30 June 2021.

If your application is successful, EU citizens will be granted either settled or pre-settled status.

Settled status will allow permeant residency in the UK, while pre-settled status will allow for a further five years of residency from the date you get pre-settled status.

More information on the UK’s EU Settlement scheme can be found here.

UK citizens living in EU member states should seek information from the immigration department of that member state. Each member state may have a distinct regime for UK citizen settlement after the transition period.

Please note Irish and UK citizens will still be able to move freely and settle between the UK, Ireland and the Crown Dependecies (Bailiwick of Jersey, Bailiwick of Guernsey and the Isle of Man) through the Common Travel Area after the end of the transition period.