EU Exit frequently asked questions
We have put together the answers to the most common questions our customers and stakeholders have asked about the EU Exit period.
This section outlines the high-level information about VAT, customs, tariffs, people movement and immigration, data implications and the Northern Ireland Protocol. These are subject to change and will be updated as more information and clarity about the process becomes available, so do check back from time to time.
Businesses should prepare and continue to collect the necessary evidence for export in line with HM Revenue & Customs (HMRC) for VAT zero rating. Please note however that this should only apply to goods moving out of the UK (noting the comments in regards to GB to NI movements).
Northern Ireland will remain part of the United Kingdom’s (UK) VAT system but will maintain alignment with European Union (EU) VAT rules on goods. This means that Northern Ireland will be bound in the same way as the rest of the UK on certain UK VAT changes. However, the Northern Ireland Protocol also allows the UK Government to apply VAT exemptions and reductions in Northern Ireland, including zero rating, corresponding to those applicable in Ireland. There is no further information available at this time on any VAT rate changes in Northern Ireland.
It is difficult to comment further on this as negotiations are still fluid. In the meantime, businesses should consider and explore how systems may be flexed to capture any rate changes to ensure compliance.
How will supplies of goods made from the UK (excluding Northern Ireland) to an EU Member State be treated from a VAT perspective, post the Transition Period?
The supply of goods from the UK (excluding Northern Ireland) to other EU Member States will be classified as an export for VAT purposes. This means a requirement to collect the relevant evidence to support VAT zero rating, where applicable. The UK Government has confirmed that an Intrastat dispatch declaration will no longer be required for these movements.
Will HMRC still be responsible for the collection of VAT and customs and excise duties in Northern Ireland?
HMRC will remain responsible for the collection of VAT and other indirect taxes in Northern Ireland and the rest of the UK.
Northern Ireland businesses should plan to continue with the submission of Intrastat and EC Sales List declarations for the reporting of goods moving between Northern Ireland and the rest of the EU. This will not, however, include:
- NI to GB goods movements
- NI to EU supplies of services
The Northern Ireland Protocol confirms, "Ensuring Northern Ireland continues to be able to operate the EU’s VIES system to share data with Ireland will require alignment with EU VAT rules with respect to goods, and therefore the information declaration requirement will be necessary for VAT purposes."
Where however goods are imported from the EU into GB, Intrastat Arrivals declarations will continue to be required for the year 2021 (subject to exceeding the relevant threshold). On movements of goods from GB to the EU, the UK Government has confirmed that Intrastat dispatch submissions will no longer be required.
HMRC’s position is that Northern Ireland businesses could avail of EU VAT simplifications where the movement of goods involves EU Member states and Northern Ireland. However, where the movement of goods involves the rest of the UK/GB then these simplifications should not be available.
Precisely how these rules will be applied where the Northern Ireland business is the intermediary in a triangular transaction is not yet clear.
Will there be any changes to how I should handle my VAT compliance requirements post the EU Transition Period?
We expect the UK VAT compliance filing arrangement to remain largely the same in relation to current deadlines and how VAT returns are filed.
During the EU transitional period, EU law will continue to be binding in the UK and Northern Ireland. Post transitional period (01 January 2021) there remains uncertainty as to the mechanism by which Northern Ireland businesses may rely on EU VAT case law. However, given the Northern Ireland Protocol requires the UK to implement certain EU VAT law into the UK legislation, it is likely that any future European Court of Justice (ECJ) case law would need to be accepted by UK courts for the decision to be binding on Northern Ireland business. We expect further clarification to follow.
HMRC has confirmed that the supply of services will follow UK VAT rules only, in contrast to supplies of goods. With respect to services provided to non-UK customers, we would not expect any immediate change to current rules on VAT place of supply rules given its complexity and ability to create double taxation. Northern Ireland businesses should however continue to monitor announcements made by HMRC in this respect.
A European Commission (EC) publication has confirmed that a movement of goods from Northern Ireland to an EU Member State will remain to be treated as an EU dispatch from a VAT perspective i.e. there will be no change to the current rules.
Much like movements from Northern Ireland to the EU, the current VAT rules for these types of supplies should remain the same. We currently await HMRC's comment in this respect.
HMRC’s position is that VAT will not be due on the movement of own goods from Northern Ireland to mainland UK.
HMRC’s position is that output tax will need to be accounted for on the VAT return, but this VAT charged can also be reclaimed as input VAT (on the same VAT return) subject to the normal VAT deduction rules.
HMRC have confirmed that VAT should continue to be charged and accounted for on these supplies at the relevant UK VAT rate, unless the goods are entering a special customs regime, or subject to a domestic reverse charge. Where this is a business to business supply, suppliers should continue to issue VAT invoices to allow for purchasers to deduct this VAT as appropriate and in line with normal VAT deduction rules.
What will be the impact on partially exempt taxpayers that move or sell goods from mainland UK to Northern Ireland?
If a business is partly exempt, and moves its own goods to Northern Ireland, the associated input VAT will be subject to an adjustment under partial exemption rules in Northern Ireland. To avoid double taxation, businesses can ‘reattribute’ input VAT on the original purchase in mainland UK as if the goods had been used for a taxable purchase.
HMRC intend to introduce anti-avoidance rules that will prevent this from being used for avoidance purposes. We await further detail in this regard.
HMRC has confirmed that UK VAT groups will continue to operate largely as they do now. However, where goods are supplied by members of a VAT group, and those goods move from Great Britain to Northern Ireland - VAT will now be due in the same way as when a business moves its own goods. In addition, where supplies of goods are made between members of a VAT group, those goods are located in Northern Ireland at the time that they are supplied, and one or both members only have establishments in Great Britain - VAT must be accounted for by the representative member, but may be reclaimed subject to the normal rules.
These should be chargeable at the applicable rate of VAT in Northern Ireland.
Where a business in Northern Ireland sells goods to a non-business consumer in an EU Member State, and where the transaction qualifies as a distance sale, VAT will be due in that Member State at the Member State's applicable rate of VAT.
The EU Commission has confirmed that taxable persons established in Northern Ireland or Member States should be able to use the OSS for declaring and paying VAT due on their intra-EU distance sales of goods.
The EC has confirmed that taxable persons established in Northern Ireland should be able to request a refund of VAT paid in Member States via the EU VAT refund scheme and vice versa.
Given the different VAT rules applicable in NI for goods (falling under the ambit of the EU) and services (which do not), the EU VAT refund scheme may not be available for all EU VAT incurred - with some of the VAT likely to only be reclaimable via a 13th Directive claim. We await further clarity from HMRC in this regard.
HMRC has confirmed that margins schemes involving goods will not generally apply for sales in NI where stock has been purchased in GB, with VAT accounting required under normal rules. However, these margin schemes should remain unchanged for sales of goods that are purchased in NI or the EU and sold in NI, GB or the EU.
Where sellers are in GB, the margin scheme will remain available for stock purchased in NI or GB.
Additional clarifications are being sought from HMRC on the guidance issued in this regard.
HMRC has confirmed that where goods sold on board ferries between GB and NI, UK VAT will be due and accounted for on the seller’s UK VAT return. Where goods are sold on journeys that visit GB and NI as part of a voyage to third countries the sale will be treated as outside the scope of UK VAT and where goods are sold on journeys between NI and an EU member state they are taxed in the place of departure, as is the case currently.
There has been a mention of ‘new tariffs’ in relation to imports post the European Union (EU) Transition Period, what does this mean?
On the 19 May 2020, the United Government (UK) Government announced the UK's new MFN Tariff regime, UK Global Tariff (UKGT), would replace the EU's Common External Tariff on 1 January 2021 at the end of the Transition Period. The UK Government has streamlined and simplified nearly 6,000 tariff lines, removed the EU’s Meursing table and eliminated tariffs on a wide range of products.
A freeport is a designated area, under customs approval, where goods will not be subject to the normal taxation and customs rules. The use of a freeport can reduce the administrative burden on businesses that frequently import raw materials and re-export finished goods. Freeports can also be designated ‘enterprise zones’ offering additional incentives to business such as regulatory and tax reliefs. Typically, goods brought into a freeport do not attract a requirement to pay duties until they leave the freeport and enter the domestic market, and no duty at all is payable if they are re-exported. The UK Government aims to create up to 10 freeports in locations across the UK and its consultation to inform its freeports policy closes at 11.45pm on 13 July 2020.
As a Northern Ireland business, the movements of goods between Northern Ireland and EU Member States will be treated as dispatches and acquisitions from a VAT perspective. The Northern Ireland Protocol is designed to prevent a hard border on the island of Ireland. However, it also states that Northern Ireland will be part of the customs territory of the UK. Given that there are special arrangements in place for supplies between Northern Ireland and the EU, we await further published guidance from the UK Government and EU to confirm what the reporting requirements will be for these transactions.
The protocol allows for 'unfettered access' for Northern Ireland businesses to the mainland UK. However, Northern Ireland agri-food producers will be required to continue to align with EU [Sanitary and Phytosanitary] rules.
Agri-food goods entering Northern Ireland from Great Britain would do so via a Border Inspection Post or Designated Point of Entry as required by EU law. They would be subject to identity and documentary checks and physical examination by UK authorities as required by the relevant EU rules.
The requirement for veterinary documentation and customs agents’ charges to move the goods compliantly will result in additional costs. Charges may vary based on a transactional or item basis. It is recommended that you contact your customs agent to clarify their charging policy.
We await published guidance on the customs treatment of these movements, but expect these to be subject to special reporting requirements.
Where you are exporting to non-EU (third countries), you will need to continue to file an export declaration as is current practice.
The UK Government has published guidance on importing animals, animal products and high-risk food and feed not of animal origin from 1 January 2021. If your products are of animal origin, there is additional documentation required for the exporting of these products, such as health certificates signed by vets in order to move the products across borders. Where you are importing goods of animal origin into the UK, you must provide the right certification with your import and enter the EU through a Border Control Post (BCP), previously known as border inspection post (BIP) or designated point of entry (DPE), where checks will be carried out to make sure that the import conditions have been met. In some cases, you may need an import licence or authorisation.
There is no requirement for you to use a customs agent, although many businesses do as declarations must be submitted to HM Revenue & Customs (HMRC) via an online platform and can be complex and investing in the necessary software to lodge them yourself can be expensive. If you expect to be submitting a large number of declarations, it may be more cost effective for you to undertake this yourself. HMRC offers grants and training to help you undertake the completion of customs declarations in-house. Before making your decision, compare in-house costs to using a customs agent and consider the following:
- Do you have the in-house expertise to do customs documentation?
- Do you have the volume of business?
- Is it more costs effective to do it in house or appoint an agent?
- Do you have time to prepare and train staff?
On 30 January 2020, the UK Government suspended transitional simplified procedures and these are still suspended. Therefore, you do not have to apply to use this between February and December 2020. HMRC has published guidance on the steps, rules and documentation a business importing for the first time needs to consider, or you can read our step-by-step guide to importing.
What export documents will be needed for sending goods to EU countries? Will every single shipment require a certain export doc?
Given that there are special arrangements in place for supplies between Northern Ireland and the EU, we await further published guidance from the UK Government and EU to confirm the reporting requirements for these transactions.
After 31 December 2020, you will need an EORI number to move goods between the UK and the EU. If you do not have one, you may have increased costs and delays. For example, if HMRC cannot clear your goods you may have to pay storage fees.
If I already have a deferment account, can I use this for imports and exports after the EU Transition Period?
Yes, you will be able to use your existing Duty Deferment account. However, if the value of your imports increase, you should revisit the value of your deferment account limit (and your guarantee) to ensure you can continue to import an increased level of imports and not breach your deferment account limit.
It is understood (at this time) that in order for the business to act as a declarant (importer of record) and clear goods in the EU, an EU establishment will be required, or an indirect representative that is resident in the importing country should be appointed to undertake customs formalities in the EU on your behalf. It is also understood that in order to operate a Duty Deferment account in the EU, an EU establishment will be required.
An establishment is usually determined on a case-by-case basis based on each trader's individual circumstances. However, indicators of an establishment include having human and technical resources available to carry out normal business activities or make or some business decisions in the country in question.
Where you have an EU or global market after the EU Transition Period, it is important that you have sufficient systems in place so that the correct documentation can be produced. It is vital you understand your supply chain to determine who is responsible for filing what and when. For example, a declaration for imports and exports is completed on a C88 form and requires detailed information from various sources.
Will there be customs duty payable on the movement of goods from the UK mainland to Northern Ireland?
There will be no customs duty or tariffs payable on goods coming into NI from the rest of the UK unless the goods are ‘at risk’ of being supplied into the EU market.
EU customs duties will apply to goods entering Northern Ireland if those goods risk entering the EU's Single Market. No customs duties will be payable, however, if goods entering Northern Ireland from the rest of the UK are not at risk of entering the EU's Single Market.
This applies to all goods that are not subject to further processing and that meet the criteria that the Joint Committee will establish in order to determine the risk of the onward movement of that good, taking into account the specific circumstances in Northern Ireland. For goods from third countries not considered to be at this risk, the customs duties applicable in Northern Ireland will be the same as in the other parts of the UK.
The Joint Committee will establish, by the end of the Transition Period, the criteria for the "at risk" assessments and may amend the criteria during their application. Such criteria shall take into consideration issues such as the final destination of goods and value or risks of smuggling.
If goods are deemed to be ‘a risk’ when entering Northern Ireland, customs duty will be payable in Northern Ireland based on the rates published within the EU tariff i.e. these will not be subject to the UK Global Tariff rates.
Unfortunately, these conditions are not yet known, but we will update this section as soon as more information becomes available.
Commercial processing means any alteration of goods, any transformation of goods in any way, or any subjecting of goods to operations other than for the purpose of preserving them in good condition or for adding or affixing marks, labels, seals or any other documentation to ensure compliance with any specific requirements.
What documentation do I need to prepare or file for ‘at risk’ goods brought into Northern Ireland from the UK, and what can I do now to prepare?
It is unclear at this time exactly what documentation is required in this scenario. However, we do know that either way, whether the goods are ‘at risk’ or not, the trader will be expected to evidence why the goods are or are not ‘at risk’. Therefore, you should start to ensure that your systems can establish an audit trail for the goods detailing their arrival and ultimate disposal, clearly showing whether the goods have retained in Northern Ireland, or have been subject to an onward movement to Ireland or the EU.
HMRC is investing a further £16 million in a grant programme to fund employee training and IT improvements for customs intermediaries, traders and hauliers that make customs declarations. Businesses that complete customs declarations now have until 31 January 2021, or earlier if funding is fully allocated, to apply for grant funding to help them increase their capacity to do so.
On 31 January 2020, the UK officially left the European Union (EU) and entered into a Transition Period, which will extend to 31 December 2020. During the Transition Period, it is business as usual for data transfers and the EU General Data Protection Regulation (GDPR) will continue to apply. Therefore, if you are currently GDPR compliant, you do not need to take any immediate action. During EU Transition Period, companies and organisations that offer goods or services to people in the EU do not need to appoint a European representative. The UK Information Commissioner's Office (ICO) will continue to act as the lead supervisory authority for businesses and organisations operating in the UK.
During the EU Transition Period, you do not need to appoint a representative in the European Economic Area (EEA) if you are offering goods or services to individuals within the EEA and/or monitoring the behaviour of individuals within the EEA. However, at the end of this period (effective 1 January 2021) you may need to consider appointing a representative if the EU has not granted the UK an adequacy decision, i.e. deemed the UK's data protection regime to confer protection equivalent to EU regimes. The ICO has published guidance about European representatives in the event on a No Deal exit.
This will depend on negotiations during the EU Transition Period. However, the UK intends to incorporate the EU GDPR into UK law via legislation aptly named the ‘UK GDPR’. There are two primary outcomes for data protection and data transfers at the end of the transition period, namely:
- The UK has obtained an adequacy decision from the UK and data transfers can continue freely between the EEA and UK.
- The UK becomes a third country and transfers of personal data coming from the EU to the UK will be ‘restricted’.
If the UK becomes a ‘third country’ and data transfers are ‘restricted’, businesses in the UK will have to ensure an additional transfer mechanism or ‘safeguard’ is in place, in accordance with Article 46 of the GDPR. The two safeguards are ‘binding corporate rules’ and ‘standard contractual clauses' (SCCs).
Following the EU Transition Period, the UK will also seek appropriate arrangements to allow continued cooperation between the UK, ICO and EU Member State data protection authorities, and a clear, transparent framework to facilitate dialogue on data protection issues in the future. The ICO has published guidance on your data protection obligations if there is a No Deal exit.
You can take the following steps to prepare:
- Re-visit the preparations carried out in the lead up to the implementation of the GDPR in May 2018. In particular, review the data mapping exercise completed as part of these preparations. Data mapping is useful for clearly setting out where your organisation’s data is flowing to and where it is coming from. For tips on carrying out data mapping, read our GDPR data audit checklist.
- Get familiar with your supply chains so you know how data moves across the organisation.
- Check where your data is stored. Is it stored in the cloud, and where are those servers and back-up servers based?
- If you have data sourced from within the EEA or you have a payroll provider based in the EEA, for example in Ireland, you should have an audit trail showing how your business fully complies with GDPR. This will help protect your business in the event of a query or wider investigation from the ICO.
- Review internal and external privacy policies.
An adequacy decision is a finding by the European Commission (EC) that a ‘third country’ i.e. a country outside of the EEA offers levels of data protection that are essentially equivalent to that within the EU. In practice, this means that data transfers can take place from the EU to the UK without further authorisation from a national supervisory authority being required, as per Article 45(1) of the GDPR. An adequacy decision is therefore important to ensure that data can continue to flow freely between the EU and UK. The process for obtaining an adequacy decision can be lengthy and involves a proposal from the EC, an opinion of the European Data Protection Board, an approval from representatives of EU countries and the adoption of the decision by EU Commissioners.
EU SCCs are one of the safeguards under Article 46 of the GDPR and are currently the most frequently relied upon safeguard to enable cross-border data transfers to take place lawfully.
The SCCs are standard form model clauses approved by the EC that govern data transfers between the EEA and a ‘third country’. The UK will become a ‘third country’ if there is no adequacy decision reached between the UK and EU at the end of the EU Transition Period. SCCs ensure data subjects, whose personal data is transferred outside the EU, have adequate protection, and must be implemented in their entirety and cover the following data transfer relationships:
- Data controller based in the EU transferring to a data processor based in a ‘third country’.
- Data controller based in the EU transferring to another data controller based in a ‘third country’.
Although the SCCs are widely relied upon, they will not cover all transfer scenarios, for example, data controller based in a ‘third country’ and data processor based in the EU. In such scenarios, specific advice should be obtained.
The European Court of Justice has recently published its decision in Schrems II and held that SCCs are a valid transfer mechanism for personal data from the EEA to a third country. However, data controllers should ensure that there are no laws in the third country that would make it impossible for the SCCs to be complied with.
The European Commission has confirmed that it will be updating the SCCs to ensure that they remain fir for purpose.
In a landmark decision (known as Schrems II) published in July 2020, the European Court of Justice ruled that the EU-US Privacy Shield is no longer a valid transfer mechanism. This means that UK organisations will now need to consider implementing an additional safeguard under Article 46 or 47 of the GDPR or relying on one of the derogations under Article 49 of the GDPR in order to transfer personal data to US organisations that were signed up to the Privacy Shield.
UK Government had previously confirmed that it would continue to recognise the EU-US Privacy Shield following the end of the Brexit transition period. However, the European Court’s decision in Schrems II has complicated the position by invalidating the EU-US Privacy Shield.
As the UK intends to implement the provisions of the GDPR into its domestic law, post-Brexit UK organisations will need to ensure that they can:
• implement an additional safeguard in place in accordance with Article 46 and 47 of the GDPR; or
• rely on a derogation under Article 49 of the GDPR
in order to transfer personal data to the US (regardless of whether the organisation was previously signed up to the Privacy Shield or not).
It is important to note that prior to the decision in Schrems II, the U.K. government was making preparations to allow data transfers to the U.S. under a modified Privacy Shield arrangement following the Brexit transition period. It is currently unclear whether the UK Government will still proceed with this arrangement in light of the ECJ’s decision.
The ICO has a range of resources to help businesses understand the implications of Brexit for the data protection laws including an interactive tool to help you maintain the free flow of personal data into the UK from Europe, and if the UK leaves the EU without a deal. If you receive personal data into the UK from the EEA, the tool will help you:
- Decide if SCCs can help you maintain data flows
- Select the right SCCs
- Understand the SCCs
- Complete the SCCs
The ICO continues to keep its guidance under review, updating it where necessary, so we recommend you visit their website regularly and sign up for newsletter.
UK to EEA data transfers: The UK Government has said that transfers of data from the UK to the EEA will not be restricted. This is because the UK Government will continue to recognise the protection afforded to UK subjects when their personal data is transferred to the EU by virtue of the GDPR.
EEA to UK data transfers: In the absence of an adequacy decision for the UK by the end of the transition period, data transfers from the EU into the UK will be restricted. This means an additional safeguard under Article 46 of the GDPR will need to be in place for these transfers to continue lawfully. The two safeguards are binding corporate rules or SCCs.
In the unlikely scenario that none of the safeguards are applicable to your business, your next step may be to determine if one of the derogations under Article 49 of the GDPR could apply. However, these will only apply in limited circumstances and you should seek specific advice in this regard. Read more about the conditions for international transfers of personal data and the data protection steps your business could take for a No Deal exit.
My business is UK-based and exports to the EU, but we do not have an EU subsidiary. Will I need an EU representative? Will an EU organisation exporting to the UK need to do the same?
The UK government intends to mirror the provisions of the EU GDPR into UK law via the UK GDPR. The EU GDPR and UK GDPR will be the same in substance and contain the same provisions. Article 27 of the EU GDPR requires organisations not established in the EU, but monitor or process personal data of EU based individuals, to appoint an EU-based representative to:
- Act as their point of contact for individuals and local data protection authorities
- Maintain records of the organisation's data processing activities
- Make data processing records available to the ICO
The UK government intends this arrangement to be reciprocal. Therefore, an EU-based company without a subsidiary in the UK, targeting goods or services to people in the UK, will need to appoint a UK-based representative. The ICO has published guidance about European representatives in the event on a No Deal exit.
My business is not directly targeting people (living in the EU), but my products are supplied to the EU market through, for example, an online retailer. Do I still need an EU representative?
If your business is not directly targeting the EU market, you do not need to appoint an EU representative. For example, a manufacturer of specialist tools who sells the tools in the EU but does not do direct marketing or process customer data relating to individuals in the EU, does not need to appoint a representative. However, if you were going to start direct marketing or marketing in trade publications in the EU, the need to appoint an EU representative would likely be triggered.
There are certain exemptions that can apply in relation to appointing a representative, for example, if the data processing is occasional and low risk. However, specific advice should be obtained if you are unsure whether you need to appoint a representative. The ICO has published guidance about European representatives in the event on a No Deal exit.
Due to the impact of EU Exit, ‘free movement of people’ is due to end on 31 December 2020. After 1 January 2021, most European Economic Area (EEA) nationals will no longer be able to come to the United Kingdom (UK) and work, without first getting a work visa. EEA nationals and workers includes people from all countries in the EU, EEA countries Lichtenstein, Norway and Iceland, and Switzerland. The one exception to this relates to Irish passport holders, who have right to live and work in the UK.
EEA nationals who reside in the UK prior to 31 December 2020 can apply for proof of their right to remain in the UK under the EU Settlement Scheme. The EU Settlement Scheme is set to close on 30 June 2021, so an application must be made by that date. If an application is not made, the EEA national will not have proof of their right to live and work in the UK. Some commentary suggests that application rates for Northern Ireland are currently in and around 40%.
Following the end of the EU Transition Period on 31 December 2020, it is envisaged EEA nationals will be permitted to enter the UK for up to six months as a ‘visitor’. EEA nationals will not be allowed to work under the terms of this visa. If an EEA national wants to enter the UK for work after 31 December 2020, in most circumstances they will have to apply for a work visa prior to entering the UK.
There will also be an impact on British passport holders travelling to the EU after 31 December 2020. British passport holders will not need a work visa to work in Ireland, but may need a work visa if they are travelling to work elsewhere in the EU. A British passport holder, travelling to the EU for work purposes after 31 December 2020 should seek advice before doing so. Advice for UK nationals living abroad, including residency, health and benefits, and specific advice for people following the UK's departure from the EU is available online through a series of Living in country guides.
One of the key issues facing businesses is the uncertainty around recruiting and retaining staff, especially if they employ staff from the EU. Free movement of EEA workers is due to end on 31 December 2020. From 1 January 2021, it will be more complex and more expensive to recruit EEA workers, as the UK intends to introduce a new immigration system. Under this new system, an employer is likely to require a UK Sponsor Licence and employees must meet English Language requirements, as well as other requirements such as a salary threshold, or particular job roles being defined as a ‘shortage occupation’.
Northern Ireland businesses should consider their long-term recruitment plans and consider their future workforce needs now. By recruiting EEA nationals prior to 1 January 2021, significant savings can be made. For example, if the current visa costs for non-EEA nationals are applied to EEA nationals in the new immigration system, it could cost up to £5,000 in fees for a three-year visa. In contrast, if the worker arrives prior to 1 January 2021, there will be no visa costs.
Employers can continue to recruit EEA workers under the freedom of movement arrangements up to the end of December 2020 and these workers can make an application under the EU Settlement Scheme to prove their right to stay in the UK.
From 1 January 2021, employers who have not previously sponsored workers in the UK, will need to develop and adopt governance models, policies and processes ahead of the new system being introduced. Employers should obtain a Sponsor License to enable them to employ EEA workers who arrive in the UK from 1 January 2021.
The EU Settlement Scheme is a mandatory application scheme under which all EEA nationals resident in the UK by 31 December 2020, must make an application by 30 June 2021 in order to protect their rights. You should apply for the scheme if:
- You or your family members are an EU, EEA or Swiss citizen
- You reside in the UK on or before 31 December 2020
The EU Settlement Scheme opened on 30 March 2019 and applications are free. You must make an application by 30 June 2021. Successful applicants will be granted either Settled Status or Pre-Settled Status, depending on their circumstances and the length of time they have lived in the UK. You do not need make an application under the EU Settlement Scheme if you have ‘Indefinite Leave to Remain’ in the UK, or if you are an Irish citizen. However, in some situations, you may wish to do so and you should take advice accordingly.
If an EEA national does not make an application under the EU Settlement Scheme, it is not clear if they will have proof of their right to live and work in the UK. As such, it is a possibility that employers will not be able to continue employing staff who have not applied under the scheme as their ‘Right to Work’ may be in question.
Settled Status is generally granted to a person has started living in the UK by 31 December 2020, and lived in the UK for a continuous period of five years or more. This means that for five consecutive years, the person has been in the UK for at least six months in any 12-month period.
Exceptions apply however, for example, if the applicant has been absent from the UK for reasons such as childbirth, serious illness, study, vocational training or compulsory military training. This is sometimes referred to as the ‘continuity of residence’, which we cover in more detail in the next question. Successful applicants can stay in the UK indefinitely (assuming they do not breach UK criminal law at any point) and will be able to apply for British citizenship (if eligible) 12 months after receiving Settled Status. However, it should be noted that Settled Status can be lost if the holder spends more than five years outside the UK.
Pre-Settled Status is usually granted if a person does not have five years continuous residence when they apply to the EU Settlement Scheme, but started living in the UK by 31 December 2020. Successful applicants can stay in the UK for up to five years from the date they get Pre-Settled Status. However, applicants should apply for Settled Status once they have acquired five years continuous residence in the UK. We have provided more detail in the next question.
If a person will reach five years continuous residence at some point before 31 December 2020, they could choose to wait to apply for Settled Status so that they reach five years continuous residence when they make the application. This means that if their application is successful, they will get Settled Status without having to first make an application for Pre-Settled Status, and then make another application for Settled Status in the future. With either status, the applicant will be able to:
- Work in the UK
- Use the National Health Service
- Enrol in education or continue studying
- Travel in and out of the UK
- If eligible, access to some public funds such as benefits and pensions
For more information, watch our People Movement and Immigration tutorial
This regulation applies for the purpose of calculating periods of continuous residence in the UK. This is important as it allows the EU national to have periods of absence while still fulfilling continuous residence rules for the purpose of applying for Settled or Pre-Settled status through the EU Settlement Scheme. Continuity of residence is not affected by:
- Periods of absence from the United Kingdom which do not exceed six months in total in any year
- Periods of absence from the United Kingdom on compulsory military service.
- One absence from the United Kingdom not exceeding twelve months for an important reason such as pregnancy and childbirth, serious illness, study or vocational training or an overseas posting
Continuity of residence is broken when:
- A person serves a sentence of imprisonment
- A deportation or exclusion order is made in relation to a person
- A person is removed from the United Kingdom under these Regulations
Contact Advice NI on 0800 138 6545 if you or your employee want help on calculating continuous residence. They offer free, independent, multilingual, advice over the phone, online and face-to-face to EU nationals in relation to the EU Settlement Scheme.
In February 2020, the UK Government set out the details of the UK's new points-based immigration system. These new arrangements will take effect from 1 January 2021, once freedom of movement within the EU has ended. The new immigration system will treat EU and non-EU citizens equally and aims to attract people who can contribute to the UK’s economy. Irish citizens will continue to enter, live and work in the UK as they do now.
The new immigration application process to work, live and study in the UK from 1 January 2021 will open from autumn 2020. A visa is not required to enter the UK when visiting for up to 6 months. The new points-based system that will be introduced will require 70 points from applicants and is focused on the most ‘highly skilled workers’, ‘skilled workers’, ‘students’ and a range of ‘other specialist workers’. EU citizens moving to the UK to work will need to get a visa in advance.
There are three mandatory criteria, which add up to 50 points:
- The applicant must have a job offer from an approved sponsor
- The job offer needs to be at the required skill level
- Specific English language requirements
In addition to these mandatory criteria, applicants must earn enough points through additional criteria such as:
- Specific education level
- How the salary compares to the going rate for the field in which they wish to work
- Whether there is a shortage of workers in the particular field
It is likely that the criteria will be amended in 2021 to include other factors such as age. We will update this section when more guidance becomes available.
You should take steps to understand the makeup of your workforce by carrying out a workforce audit. For example, do you know how many EEA and non-EEA personnel you employ directly, or how reliant your business and supply chain is on labour from the EEA? You should identify the employees in your business affected by EU Exit.
Those impacted will include:
- Workers from the EEA
- Workers who commute from the Republic of Ireland to work in your business, noting that Irish passport holders are not impacted by EU Exit
- Workers who are UK nationals but have family members from the EEA
- Students from the EEA working in your business, for example completing a scholarship or student placement
- Any British passport holders that are required to travel to the EEA for work (this does not include travel to Ireland)
You should also consider whether there are tasks or departments that are heavily reliant on EEA workers. Are those workers being supported to make an EU Settlement Scheme application? Does your business need to mitigate employment risks? What is the potential cost of not helping the relevant employees? Essentially an organisation needs to gauge their immigration risk, identify those who need to make immigration applications and take action as set out below:
- Keep updated on EU Transition Period developments including checking how to get ready for new rules in 2021, signing up to receive email alerts when new information is published or signing up for Home Office email alerts to check the status of EU nationals in the UK.
- Speak to your employees about the challenges of EU Exit and the upcoming immigration changes. Let them know you are aware of the issues and are looking at ways to address them. If employees know they are valued and supported, this will help increase their loyalty to your organisation. For more information, read our build effective relationships with your employees guide.
- Retain skills so you can avoid losing vital skills and knowledge if a staff member leaves. You may wish to consider cross-skilling employees so that key skills and business knowledge are spread throughout your workforce. Read our knowledge management and business growth guide to find out how to share knowledge in your business.
- Provide your employees with support and guidance on how they can make an application under the EU Settlement Scheme or as a Frontier Worker, or apply for British and Irish nationality. Note that some countries do not allow dual citizenship, so employees should check with their embassy in the UK to see if their home country allows dual citizenship.
- Make employees aware of the EU Settlement Scheme: employer toolkit, which offers tools and information to support EU citizens and their families on the EU Settlement Scheme.
- Understand the increased complexity to your business of employing EEA citizens from 1 January 2021, including information about sponsorship fees, skill levels and salary thresholds). If you intend to employ EEA citizens from 1 January 2021, it is likely that you will need to apply for a UK Sponsor Licence. This should be actioned as soon as possible to enable you to continue to employ EEA citizens under the new points based system. For more information, read the guide on how to apply for a Tier 2 or 5 Sponsor Licence and how to sponsor a migrant worker.
- Be mindful of discrimination. Ensure any support you offer is made available to all employees in your business whether they are UK citizens, EEA nationals or from outside the EEA. For more information, read our guide on prevent unlawful discrimination and promoting diversity.
Businesses should be aware of the following timelines:
- 31 December 2020: End of freedom of movement for EEA workers to the UK
Businesses should consider their long-term recruitment plans now. Employers can continue to recruit EEA workers until the end of December 2020 and these workers can make an application under the EU Settlement Scheme until 30 June 2021.
- February 2020 to December 2020: Sponsorship Licence Application
Businesses who wish to recruit EEA workers from 1 January 2021 should apply for a Sponsor License. Your business should look into the new Points Based Immigration System and sponsorship application process now and read the guide on how to apply for a Tier 2 or 5 Sponsor Licence and how to sponsor a migrant worker.
- 1 January 2021: Launch of the new UK Points Based Immigration system
From January 2021, employers who have not previously sponsored migrants in the UK will need to develop and adopt governance models, policies and processes ahead of the new system being introduced. Employers should obtain a Sponsor Licence if they do not hold one to enable them to employ EEA workers under the new immigration system.
The CTA will not change as a result of the UK exiting the EU. Employers should note that Irish nationals will not need immigration permission to work in the UK and British nationals will not need immigration permission to work in Ireland. 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.
Following a statement to changes to the Immigration Rules on 14 May 2020, non-EEA family members of those born in Northern Ireland, and who consequently are entitled to British and/or Irish nationality will now also be able to apply for status under the Scheme regardless of whether their Northern Irish family member holds British or Irish citizenship.
A Frontier Worker is an EU, EEA or Swiss citizen who lives in one EU state, works in another and returns home at least once every week. An example of this in a Northern Ireland context is an EEA worker living in Dundalk and working in Newry, or living in Donegal and working in Strabane.
EU, EEA or Swiss citizens who are frontier working in the UK by 31 December 2020 will continue to be able to enter the UK using a valid passport or national identity card until 1 July 2021. From then on, they will need a frontier worker permit, as well as a valid passport or identity card, to enter the UK to work. The frontier worker permit scheme will open for applications on Thursday 10 December 2020.
Following the launch of the scheme, individuals who are eligible will need to hold a valid frontier worker permit from 1 July 2021, as well as a valid passport or national identity card, to enter the UK as a frontier worker.
This is an important immigration application for EU, EEA or Swiss nationals who:
• Do not hold a British or Irish Passport
• Live in the Republic of Ireland
• Work in Northern Ireland
• Return home at least once per week
Guidance has been issued on situations where a Frontier Worker will retain their status if they are not working and this includes the following situations:
• They are temporarily unable to work because of an illness or accident
• They were working for more than one year but are now involuntarily unemployed, and you’re registered as a jobseeker
• They completed a fixed-term employment contract of less than one year and are now involuntarily unemployed, and are registered as a jobseeker
• They became involuntarily unemployed during the first 12 months of work, and are registered as a jobseeker
• They are in vocational training whilst involuntarily unemployed
• You are in vocational training whilst unemployed, and the training is related to the work you carried out in your previous work
• You are temporarily unable to work in the late stages of pregnancy
• You are on maternity or paternity leave, and you return to your previous employment, or find another job, at the end of this period
From 1 January 2021, non-British, non-Irish workers who wish to begin employment in the UK while remaining resident outside the UK will need to apply through the UK’s points-based immigration system.
We will update this section when further guidance is available. Further details on frontier workers can be found at gov.uk.
There will be no change to the way EU, EEA and Swiss citizens prove their right to work until at least 1 January 2021. Employers should conduct right to work checks on EU, EEA and Swiss citizens in the same way as now until at least 1 January 2021.
Job applicants can prove their right to work using any of the following:
- Valid passport or national identity card if they’re an EU, EEA or Swiss citizen
- Valid biometric residence card if they are a non-EU, EEA or Swiss citizen family member
- Status under the EU Settlement Scheme using the Home Office online right to work checking service
There will be no change to right to work checks until 1 January 2021 and you will not be required to undertake retrospective checks on existing EU employees. For more information read the right to work checklist.
Irish citizens will continue to have the right to work in the UK and will continue to prove their right to work as they do now, for example by using their passport. Also read right to work checks and ensure your workers are eligible to work in the UK.
The EU Settlement Scheme: Employer Toolkit contains relevant materials for you to provide clear and accurate information to the EU citizens and family members you employ.
These materials include:
- Template letter to EU citizen staff
- Presentation on the EU Settlement Scheme
- Factsheet on the EU Settlement Scheme
- Leaflet on the EU Settlement Scheme
- Poster on the EU Settlement Scheme
- Translated materials on the EU Settlement Scheme
These can be downloaded and used in the workplace to raise awareness for staff that may be affected. If an employee has applied to the EU Settlement Scheme and needs help or information about their application, they should contact the EU Settlement Resolution Centre.
A number of measures have been taken with implications for immigration to the UK during the COVID-19 pandemic. A key development has been the inability in most cases to proceed with an immigration application, as they cannot be processed due to the closure of Visa Application Centres. Some centres are however beginning to re-open, including in particular for in-country applications.
Other recent key developments include:
- The UK government has announced self-quarantine measures will apply for certain arrivals to the UK from 8 June 2020. Following entry, travellers must use personal transport where possible to get to their accommodation and remain there in self-isolation for 14 days. This does not apply to those travelling from the CTA and to certain exempt visitors i.e. haulage and transportation workers, medical and scientific professionals needed to assist with the COVID-19 pandemic.
- The Immigration Health Surcharge is to be scrapped entirely for all NHS staff and care workers.
- Government guidance issued confirming that individuals with visas expiring between 24 January 2020 and 31 July 2020 who cannot leave the UK can be granted an extension to 31 July 2020, and can switch into a long-term visa category from within the UK rather than having to apply from abroad.
In relation to the EU Settlement Scheme, the UK Government's position is that EEA nationals and their family members should continue to register under the Scheme as normal. Delays do currently exist in obtaining a decision (particularly where evidence must be submitting in hard copy), or when accessing assistance via the EU settlement Resolution Centre.
For an individual to qualify for Settled Status, normally they must not be absent for over six months in any 12-month period. There is some discretion for absences up to 12-months for an important reason, such as sickness. It is therefore likely that otherwise eligible individuals who are abroad and who cannot return to the UK at present will be able to avail of this discretion if their time outside the UK exceeds six months. It is recommended that advice is taken should this situation apply.
There is a possibility that due to disruption caused by the COVID-19 pandemic, the EU Transition Period and/or the deadlines for applications to be made under the EU Settlement Scheme may be extended. However, to date the UK government has suggested that they do not believe such an extension to be necessary.
If you have Settled Status, you will be able to spend up to five consecutive years outside the UK. If you have Pre-Settled Status, you will be able to spend up to two consecutive years outside the UK. However, if you spend more than six months outside the UK, this is likely to affect your ability to obtain Settled Status.
Can I bring family members who are not European Union (EU), European Economic Area (EEA) or Swiss citizens to the UK?
An EEA national can be joined by their non-EEA family members until 31 December 2020 and after 31 December 2020 if:
- The EEA national has made a successful application under the EU Settlement Scheme and received either Settled Status or Pre-Settled Status
- The relationship began on or before 31 December 2020, or 31 December 2025 for Swiss nationals
- The non-EEA national is a 'close family member'
In the current guidance, a 'close family member' is defined as a spouse, civil partner, unmarried partner and dependent children, grandchildren, parents and grandparents.
If you have applied to the EU Settlement Scheme, you will be able to ‘link’ your child’s application to your application, using the application number you received when you made your application. You can do this at any time after you have applied and can use your own email address in the application if your child does not have one. Your child can also make a separate application.
If you presently hold permanent residence status in the UK, you must still make an application under the EU Settlement Scheme by 30 June 2021 unless you are eligible for and decide to apply for naturalisation before 31 December 2020. An applicant can typically apply for naturalisation 12 months after acquiring or obtaining permanent residence. If you are not eligible to make an application for naturalisation before 31 December 2020 then it is recommended that you apply for Settled Status, as after 31 December 2020, your permanent residence card will lose its validity. It will not, however affect the date you are eligible to apply for naturalisation.
If you have ILR, there is no requirement to make an application under the EU Settlement Scheme. However, there may be some advantages to making an application under the EU Settlement Scheme, such as being able to live outside the UK for up to five years at any one time, instead of the current two-year limit for ILR.
If your application for Settled Status or Pre-Settled Status is successful, and you are from the EU, you will not receive a physical document. Instead, you will have a ‘digital status’ from the UK Government’s service to view your Settled Status or Pre-Settled Status.
If you are a non-EEA national, you will receive a physical card showing your status.
If your application is successful, you will be granted either Settled Status or Pre-Settled Status, depending on your length of residence in the UK. If you believe you have granted the incorrect status, you should seek legal advice.
You have a number of options, depending on your circumstances:
- You can make another application at any point before the EU Settlement Scheme closes
- You may also be able to apply for the decision to be reviewed, known as an ‘Administrative Review’
- In certain circumstances, other avenues of legal redress may be available and advice should be sought