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Brexit: So what does this mean for UK entrepreneurial businesses?

With the Brexit now scheduled for 11pm on 31 January 2020, it is more important than ever that companies consider the impact of Brexit on their businesses and plan to mitigate any risks that Brexit may have on their business. The uncertainty that will remain as the UK starts the exit process and the “transition period” will have an effect on the markets and the way companies do business and therefore companies must have proper Brexit procedures and planning in place to reduce the impact of Brexit uncertainty where possible.

We have updated the Q&A page to the Brexit Section of our website which will hopefully help entrepreneurs and business owners with a number of questions which we think are likely to apply. Many of the answers we have set out highlight a number of scenarios and in some cases pose further questions which government and other institutions will need to provide answers to.

This Q&A is up to date as of 21 January 2020. We will keep the Brexit section of our website updated and expand on it as the Brexit process unfolds – though with the number of twists and turns the Brexit process is currently taking this can be a difficult task! We welcome your feedback and comments on this section in particular if you think there are other important questions which are not yet covered and which should be. That said there certainly are things which you should be thinking about now in relation to your corporate and commercial activity and we hope our Q&A section will give you some useful food for thought.

If you would like specific advice about certain aspects of your business then please do get in touch with your usual contact at the firm or contact Hannah Brazel ( who can assist with any queries.


Brexit - Your Questions Answered

Q: What does this mean in relation to any EU grant which we have either secured or applied for?


A: In relation to any EU grant which you have secured, the payments you have received and will receive until the point of Brexit should be secure and not clawed back due to the event of Brexit itself, bearing in mind that the UK continues to be a fully paid up member of the EU until that point. The UK government has already confirmed that European Commission research grants, including Horizon 2020 programme grants, awarded while the UK is still a member of the EU will be guaranteed by the Treasury until 2020. This will be the case even when the project continues beyond the UK’s departure from the EU. The European Commissioner for Research, Science and Innovation has provided assurances that UK researchers should not face any discrimination when bids are assessed. All application evaluators are now being given specific additional instructions that they should not evaluate proposals with UK participants any differently than before.

After the point of Brexit, the long-term future of UK participation in European research programmes will be decided as part of the UK’s exit negotiations.

Q: What does this mean in relation to the EU collaboration which we are working on?


A: Research Councils UK (RCUK) has stated it remained committed to enabling the best researchers to collaborate internationally. The UK’s participation in major European partnerships that are not part of EU institutions will not be affected. These include CERN, the European Southern Observatory (ESO), European Space Agency (ESA), Institut Laue-Langevin (ILL), European Spallation Source (ESS) and European Synchrotron Radiation Facility (ESRF).

The Government published a Position Paper on Collaboration on science and innovation in September 2017. It stated that “the UK wants Europe to maintain its world-leading role in science and innovation, and will continue to build on its unique relationship with the EU to ensure that together we remain at the forefront of collective endeavours”.

You will need to check the terms of your collaboration agreement very carefully and look at key provisions such as the contract term, the obligations of each party (eg secondment of personnel), funding basis and termination rights. Many collaborations agreements will be unaffected in the short term and it should be borne in mind that the point of true “Brexit” (when the UK is free of all

EU obligations) could still be a while away. Following the point of Brexit there is great uncertainty about ongoing EU funding (see our separate note on EU grants) and a key issue is the ability for EU workers to move freely between EU member states as part of cross-border collaborations and what happens next. To put some context on how important the free movement of EU workers is, at least a third of researchers at Cambridge are overseas nationals and almost a quarter of researchers there are from other EU countries. A post Brexit UK could make it much more difficult for UK universities to attract talent and participate in cross-border collaborations in Europe. There will certainly be more red tape and costs involved for UK universities and businesses. However it should not be overlooked that scientists from non-EU countries are currently able to work in UK universities and businesses and do so by meeting the Tier 1 or 2 qualifications for UK work visas. We would not expect this to change in a post Brexit UK.





Q: What does this mean in relation to our prospects of securing future funding?


A: The party line from the UK and European governments in relation to European grants and fundraising is that it is business as usual until Brexit actually happens (whenever that may be). A lot of funding is often drip fed into the companies by a process of tranching or through banking facilities that can be drawn down and you will want to seek reassurances from your investors or lenders that the event of Brexit, when it eventually happens, will not result in either a change of terms or a complete withdrawal of financial support that is available to be called upon and drawn-down. It will in most cases depend on the actual contract terms as well as the continuing commitment of your investor(s) and/or lender(s) to the UK. If you cannot receive any reassurances then you will want to consider putting contingency plans in place.

If you have been speaking to prospective investors about investing into your business then you will want to double-check that they still have committed funds. However for most private equity and venture capital funds their current funds will be committed and the issue of Brexit may only apply to any new fund that is planned and whether they still have the support of their cornerstone investors.

Brexit has caused and will continue to cause a significant amount of uncertainty in the markets which means a number of investors are certain to be evaluating the outcome of Brexit and may choose to hold off until the position is clearer. With a reduction in access to finance, which seems likely in the short term, this will also provide an increased market opportunity for those investors who decide to get on with it whilst others wait. For those who swallow their ‘brave pills’ they will be able to secure some great deals at very sensible valuations.

We think great companies will always get funded although we acknowledge that companies may need to work harder now to secure their funding. We have the experience of working with many tech companies throughout the recent recession and also during the times when the dot com bubble had well and truly burst and many of these companies not only survived these challenging times but flourished and have become very successful.

Q: Will this have any impact on our R&D tax credits?


A: Existing R&D tax credits will not be affected and no changes to the regime are expected to be introduced in the short term. Looking further forward, it’s feasible that a relaxation of State Aid obligations could allow the UK Government greater flexibility in relation to such tax incentives

Q: What does this mean in relation to the future availability of funding from the Institutions which receive EU funding (eg Scottish Investment Bank)?


A: Institutions throughout the UK receive substantial funding from Europe and, in the long term, this must be likely to fall away. However, in the short term, nothing will change as these funding programs will have their own commitment periods which will have some time left to run. It is perhaps the non-renewal of these funding programs in the medium term which could have the greatest impact. Given the recognised importance of many EU backed funding institutions within the UK (eg the Scottish Investment Bank), it is likely that the UK and Scottish governments (as applicable) would try to ensure that they, or some successor organisations, are able to continue to service the market although it remains to be seen whether the levels of financial support can be maintained. It is important that any UK institution which relies on funding from the EU gives a clear and transparent statement as soon as possible to help ensure that companies can start to make contingency plans. So far there have not been many statements as the institutions continue to monitor the situation.

Q: We are planning to refinance our banking facilities and will this have an impact?


A: Yes. The only thing that is certain is uncertainty. Uncertainty is the enemy of investment; particularly debt. Banks are likely to increase the cost of borrowing as a result of this uncertainty and their increased costs of borrowing (which is inevitable with the increase in the interest rates set by the Bank of England and if they’re having to consider issues with “passporting”). Borrowers may find that the costs of refinancing their debt has gone up, perhaps to unaffordable levels. Banks may simply refuse to refinance in some cases. Financial and other covenants are likely to become more onerous, and we may start to see the introduction of Brexit-related events of default.

Q: What will be the effect on businesses in financial difficulty or who want to restructure?


A: There have been a number of headline grabbing insolvencies recently particularly with high street businesses and the uncertainty of Brexit has undoubtedly been a factor in some of these cases. It should be noted that most of these companies seem to be your typical “bricks and mortar” shops and having less of an effect on those with a purely online presence, but that doesn’t mean Brexit won’t have a few more casualties in the next few months.

While most insolvency matters are determined by the individual regime in the respective member state, there are some aspects of insolvency law which have an EU-wide effect on cross border cases. It is yet to be seen how those aspects will be dealt with in the event of a no deal Brexit. The process of UK insolvencies is not likely to be affected, but the increased cooperation between the UK and other EU jurisdictions in cross-border insolvencies is bound to be thrown into disarray. Once European insolvency law ceases to apply to the UK (and more importantly once British insolvencies are no longer recognised in Member States of the EU), British companies with operations in other EU jurisdictions will have a much more complicated, protracted and costly task when restructuring their operations. It will be much better to do that under the existing regime, before the changes come into effect, than it will be during any hiatus period, or even in the early untested days of the new regime


Q: Will this affect EIS or SEIS tax relief on any business angel investments?


A: EIS and SEIS are subject to EU rules on State Aid. This also applies to VCT and other taxes such as R&D tax credits and EMI schemes (see other answers below).

The future after Brexit could be simpler and more efficient as far as tax incentives for growing businesses are concerned; however, it is likely the UK will still comply with the EU rules on a variety of issues including State Aid to access elements of the single market and to continue to operate as freely as we do now. The Government has regularly stated that they want the UK to remain the best place for science and innovation. There have been a number of measures encouraging investment in such companies including opening a consultation on investors investing a small portion of their pensions in venture or patient capital, further investment by way of the British Business Bank and Patient Capital Bank and encouraging EIS/VCT funds and reforms to EIS and SEIS in the 2017 budget. Even when (if) the (S)EIS rules do change, it is hard to see any government removing any benefits in relation to investments already made.

Q: Will this affect VCT relief on any business investments?


A: Like EIS and SEIS, VCT is subject to EU rules on State Aid and it is expected that the UK will likely still comply with the EU rules for at least the near future.

There has been a notable slow down on VCT investment this year (some statistics show this is as much as 40%!) with Brexit looming and the value of the pound dropping. It is expected the Government will make a big push to get the market moving again and there is even the possibility of increasing benefits received for investments to encourage investment.

Q: Will this affect our R&D tax credits?


A: R&D Tax relief is a UK government-run initiative so from first look it would appear to be unaffected by Brexit. However, the SME scheme (part of two separate schemes that make up R&D tax credits) is regulated by the EU under the State Aid rules. State Aid legislation ensures that EU members do not assist companies over a certain amount to ensure that one member is not distorting competition for others. After Brexit, there is a chance that the UK could remove the cap which could have a large impact on SMEs’ R&D policies.

Q: Will this affect our plans to introduce an Enterprise Management Incentive (EMI) share option scheme or our existing EMI share option scheme?


A: In May 2018, the European Commission approved the UK’s Enterprise Management Incentive (EMI) share option schemes for a further 5 years, but it must be noted that the European Commission’s decision applies until the UK ceases to be a member state of the European Union. This creates some uncertainty as to what happens to EMI schemes post- Brexit. The immediate impact on EMI schemes is likely to be minimal. The withdrawal agreement provides for a transitional period until 2020 where the UK will continue to be subject to the current State Aid rules. In the absence of a withdrawal agreement, the proposed new UK State Aid rules will largely mirror the current rules and will need to be in place by Exit Day. It is expected that the Competition and Markets Authority (CMA) will take over the European Commission’s oversight role for monitoring and enforcing State Aid rules in the UK.

We do not expect any changes to be made in the short term to and they continue to be a great way of helping to attract top talent to growing businesses in the UK. EMI schemes are subject to EU rules on State Aid and we would expect that after Brexit the rules could be improved and simplified by the UK government. For example, a key restriction at the moment is a 250 employee limit which was imposed by the EU. We do not expect EMI schemes to disappear post Brexit because they were introduced by the UK government in 2000 with the stated aim of making the UK a highly attractive place for high growth businesses and the top talent that they need to recruit.

Q: Will this affect our ability to attract a foreign buyer of our business?


A: We have recently seen a lot of volatility the M&A market for businesses. With a notable slowdown in acquisitions as everyone waits to see what will happen with a number of potential sales being postponed until there is more certainty around Brexit. However, the longer term impact will depend on what sector you are working in. Indeed, many of the fast growing companies that we work with by-pass the UK and European markets and head straight to the US and Asia as their core markets. Companies with best of breed technology will always get acquired and Brexit is unlikely to have a serious impact on these companies in the medium term. It should be noted, that in some circumstances, the period since the Brexit vote actually encouraged a flurry of M&A transactions. This was due to the low value of the pound together with foreign companies wanting to get a foothold in the UK prior to Brexit. If a foreign buyer is looking to delay their acquisition decision and have exclusivity extended then you will want them to make a quick decision and only allow an extension for a limited period of time.

Q: What does this mean for foreign businesses with their EU headquarters in the UK?


A: As a result of the likely loss of the benefits of ‘passporting’ from the UK within the EU and free movement of labour, we expect that every foreign business with a European headquarters will be considering their options and unfortunately several will already be taking steps to move to another EU jurisdiction. A number of large multinationals (Dyson, Panasonic, Honda and AIG– to name just a few) have been making headlines for moving their UK headquarters or operations to other jurisdictions, though many are claiming this is for reasons other than Brexit. Many other businesses will now be checking their lease terms to see if there is a break clause in their lease or making plans to put their property on the market. Those tied into a lease may find their landlords are less willing to agree to an early exit while high vacancy rates are on the horizon, however those who own their properties (especially in London and where able to move quickly) may benefit from the influx of non-EU investors looking to capitalise on the discounted property prices arising from the drop in the value of Sterling. For any members of staff working in such a business the issue will be whether they want to relocate and the relevant businesses will be required to consult with their staff.

 Q: What does this mean for foreign businesses planning to set up in the UK?


A: Any foreign business which has been planning to set up in the UK as their European headquarters will now be considering taking steps to move to another EU jurisdiction. It seems highly unlikely that the UK will be in a position to negotiate any arrangements with the EU until the event of Brexit has occurred for the UK. This could be a very long wait and nothing is certain. As such we would expect countries like Ireland to do well out of the Brexit process and many other EU countries will be keen to attract such businesses.

Q: What does this mean for University spin-out activity?


A: Within the UK we have some of the best universities in the world, countless Nobel prize winners serve on their academic staffs and we out perform in relation to the publication of scientific papers. Innovation is central to our future and it is of critical importance that we continue to nurture our intellectual assets. As universities worry about future funding, they are likely to want to continue spinning out companies to increase their commercial arms and reduce their internal costs. However, spin-out companies will want to be mindful that spin-out deals may have a more financial impact on the university and therefore, they may want to drive a tougher bargain. As the Brexit deadline approaches, the following will be at the forefront of everyone’s minds are:-

  • Visa and immigration requirements for foreign students;
  • ERDF funding across a wide range of projects from ‘investor readiness’ grants and SMART awards to the Scottish Co-Investment Fund. These programmes should however all be funded for the time being until or unless such funding is taken away;
  • Horizon 20:20 projects which have been started should be able to continue, at least for the time being, but it may be difficult to apply for any new such projects;
  • It is critically important that we are still able to attract the best talent, not only from the EU but also from the wider world, to pursue research, work in scientific collaborations and fulfil key roles in high growth innovative companies;
  • The challenges of securing investment are a recurring theme for virtually every new start up technology company. We may see investors taking a more cautious approach, at least in the short term, but we should all be promoting the positive aspects. The quality and quantity of dealflow is still there and for € and $US investors an investment in a UK technology company or fund or the acquisition of a UK technology company is now much cheaper than it has been in the past.

Q: What does this mean for UK start up and scale up activity generally?


A: It is often remarked that the best companies emerge unexpectedly in a time of disruption. During the next few months we are likely to see a period of significant disruption and political uncertainty. However, that is the type of environment which encourages fresh thinking and new ideas and we may be about to enter into another period of creative innovation. There are no passport controls on the internet and, with the emergence of virtual reality, augmented reality and tele-presence, we will find all sorts of new ways of communicating and doing business with each other across the world without always having to travel to meetings. While we can look forward to a new burst of creation and innovation, we must ensure that the innovators who are building the great companies of tomorrow have access to sufficient risk capital to enable them to do so. As we cannot depend on the clearing banks to provide risk capital for innovation, our future will be largely dependent on the wise and prudent deployment of capital into the innovative new businesses which we need to provide employment for tomorrow’s workforce. In the short term, financing will be more of a challenge, but there will always be capital looking for a home in good quality innovative new businesses with good growth prospects.

Q: What about FinTech and financial services companies and their dealings within the EU?


A: It is difficult to generalise as there are many FinTech companies developing new businesses in areas such as cyber security and payment systems which have global application but do not need to be specifically regulated in any one jurisdiction. The challenges will arise around those FinTech businesses which currently need to be authorised to trade across the European Union as the existing “passporting” regime will cease to apply. Therefore, any FinTech businesses should give thought to whether they need to establish a European base or incorporate subsidiary companies in local jurisdictions to trade in that jurisdiction that will simply be a price of doing business. A number of City Institutions have already started establishing subsidiary companies or applying for banking licenses in Europe (which includes Dublin). We expect this will inevitably mean the transfer of a number of jobs to Europe.

Q: We have a number of EU nationals working for our company - how will this affect us?


A: Firstly, free movement will be unaffected during the transition period from ”Brexit Day” until 30 June 2021. This means that any EU staff will still have a right to work during this period.

The plan for this period is for every EU worker to apply and obtain status to work that will be valid beyond the transition period. The official transition period ends on 31 December 2020, however deadline for applications is set at 30 June 2021 giving applicants an extra 6 months until their right to live and work in the UK will be lost. Applicants will essentially apply for 'settled' or 'pre settled status'. The status they are given will be dependent on how long they have resided in the UK. If applicants have any convictions this may prevent them gaining any status, and they would therefore lose their right to live and work in the UK when the transition period comes to an end.

If you are considering taking on an EU worker after 31 January 2020 they will still have a right to work under free movement, however they will be required to apply for settled/pre settled status if they are planning on staying. For further information on status criteria, family members of EU workers rights and the application process itself please go to

Q. As a UK employer should I be encouraging my EU citizen employees working in the UK to get a UK passport?


A: Once the UK leaves the EU, EU citizens will no longer have the automatic right to reside and work in the UK unless they have already obtained permanent residency. The ‘Leave’ campaign have however indicated they are keen to preserve the rights of EU citizens already living and working in the UK. Negotiations will take place over the next couple of years and therefore it will be some time before the final outcome is known. Whilst there is no immediate impact, there remains an element of uncertainty with regard to the long term situation. Any anxious EU citizens working in the UK, in the meantime, could consider applying for British citizenship, if eligible, to protect their position.

If you’re an employer with a number of EU citizens in your employment or the few EU citizen employees you have are particularly key to your business, you may wish to encourage them to apply for British Citizenship.  You could consider offering the following support:

  • Disseminating information about how to apply for British Citizenship and the benefits of doing so;
  • Offering practical assistance with filling out the necessary forms etc;
  • Provide an English language and culture teacher to those employees who struggle with the language etc.
  • Engage an immigration specialist third party to assist your staff.

How to become a British Citizen:

The most common way to become a British citizen is called ‘naturalisation’.  You can apply for British citizenship by naturalisation if:

And you must usually have:

  • lived in the UK for at least the 5 years before the date of your application;
  • spent no more than 450 days outside the UK during those 5 years;
  • spent no more than 90 days outside the UK in the last 12 months;
  • had settlement rights (‘indefinite leave to remain’) in the UK for the last 12 months if you’re from outside the European Economic Area (EEA); or
  • had permanent residence status for the last 12 months if you’re a citizen of an EEA country - you need to provide a permanent residence document; and
  • you have not broken any immigration laws while in the UK.

If your spouse or civil partner is a British Citizen, you can apply for citizenship if:

Unless your spouse or civil partner works abroad either for the UK government or for an organisation closely linked to government, you must usually also have:

  • lived in the UK for at least the 3 years before your application is received;
  • spent no more than 270 days outside the UK in those 3 years;
  • spent no more than 90 days outside the UK in the last 12 months; and
  • not broken any immigration laws while in the UK.

Further information on applying for British Citizenship can be found here.

Q: What should we be thinking about in relation to our staff employment contracts?


A: In the short term, staff employment contracts will remain largely unaffected and this is likely to be the case until the end of UK negotiations with the EU. However, if the UK leaves the single market and negotiates bespoke arrangements with the EU or individual member states, then, in theory, the UK Government could repeal current employment laws (most of which originate from European Directives – e.g. working time regulation, discrimination and equality legislation). This said, it seems unlikely that the Government will want to make significant changes because the EU member states that we will continue to trade with will probably insist on the UK having similar employee rights, the Government is likely to want to minimise upheaval for British businesses by maintaining the status quo (at least in the short term) and, politically, it is likely to be to the Government’s benefit to maintain the rights that employees and employers have come to expect in the workplace.

Q: How can we reassure our staff?


A: The vote to leave the EU has created instability, which is likely to last for some time and will be unsettling for staff. In order to reassure staff and safeguard your business interests we would suggest considering the following:

  • Send a communication to staff or hold a meeting to reassure them that changes will not occur overnight and that you are likely to get sufficient notice of any changes so that they can be properly managed.
  • Let staff know that in the short term at least staff contracts will not change (other than in the ordinary course of business) and existing EU migrant workers will be permitted to live and work in the UK and the current indications are that this is unlikely to change.
  • Appoint a director, senior employee or HR Manager within your business to be the person tasked with keeping up-to-date with the developments that will impact on staff and will send regular communications about this.
  • Encourage and support key employees who are EU migrant workers to apply for permanent residence in the UK if they are eligible.
  • If your business relies heavily on EU migrant workers, start putting together a strategy/contingency plan about how you are going to resource your business should the UK move to a points-based visa system. You may wish to take professional advice to help with this.

If you are a Holistic HR client and would like some further information about the implications of Brexit for Employment and HR practices, please contact us to receive your Employer’s Guide to Brexit. Alternatively, if you would like to find out more about the Holistic HR service, please follow this link:

Q: We are planning to apply for a European patent.  Should we still do this?


A: The current European patent system should not be affected by Brexit because the European Patent Convention is not a European Union instrument. It currently has 38 Contracting States and some of them (for example Switzerland, Norway and Turkey) are not members of the European Union. The UK should remain a party to the European Patent Convention.

Post Brexit, a business in the UK can still file a patent application to the EPO for whatever European foreign market it is seeking patent protection in. Patents granted by the EPO would then still have to be validated at the country level, a step that would not have been necessary under the proposed unitary system.

The much debated unitary patent was to be granted by the European Patent Office and would have been valid in 26 countries, with a centralised court of enforcement known as the Unified Patent Court (UPC). It was intended to cut down on the cost, administration and red-tape of filing and enforcing a patent across many European jurisdictions. Under the unitary system, those seeking patent protection in multiple markets would be able to file a single application to the EPO, and if granted, see it have immediate effect across all relevant states and pay a single renewal fee.

However the unitary patent is a creation of the European Union and, although the UK government confirmed in November that it intends to ratify the UPC Agreement, as EU membership is a requirement for participation, it remains uncertain what involvement the UK will have in the unitary patent and UPC system.

Q: What about our existing European patent applications?


A: Brexit will have no impact on existing and future non-unitary patent applications filed through the EPO. These will continue to designate the UK and, once granted, be capable of validation with the UK IPO, for as long as the UK remains a member of the EPC. There is not now, and never has been, any suggestion that the UK would consider withdrawing from the European patent system.

The UK government has announced that it is proceeding with preparations to ratify the Unitary Patent Court Agreement which would introduce the new unitary patent system (which would also be administered by the EPO). However, EU membership is a requirement for participation and UK involvement therefore remains uncertain post Brexit.

Q: What about our existing EU trade marks or design rights?


A. Much like European Patent applications Brexit will have no immediate impact on existing EU trade marks and designs. They will continue to be enforceable across the EU and this should continue to be the case following the UK leaving the EU. It is also anticipated that there will be a transition framework which will enable existing EU trade marks and designs to continue to apply at UK level post Brexit. Following the UK’s exit from the EU, it is expected that the right to enforce new EU trade marks and design rights in the UK will be lost. Accordingly, post Brexit, new applications may have to be sought in both the UK and the EU in order to protect right holders.

Q: What about the transfer of personal data?


A: The General Data Protection Regulation (GDPR) entered into force on 25th May 2018 and is directly applicable in all EU member states without the need for implementing national legislation. It will continue to apply in the UK until we leave the EU. Post Brexit, GDPR will form part of UK law under the European Union (Withdrawal) Act 2018, with some technical changes to make it work effectively in a UK context.

If the UK leaves the EU without a deal in place, it will become more difficult to export data from the EU to the UK (without putting in place EU model clause contracts). UK data protection laws would have to be approved as providing adequate protection for personal data by the European Commission, and the European Commission has indicated that they will not make such an adequacy assessment until after the UK has left the EU.

It will therefore be vital for businesses to assess what safeguards may be required to be implemented in order to ensure free flow of personal data between the EU and the UK. Other key data issues for businesses to give consideration to as a result of Brexit will include a review of all data ownership and uses, for example to establish:

  • whether a GDPR representative needs to be appointed;
  • what customer and third party data is held and in which locations;
  • what are the permitted terms of use of such data and when can such use be withdrawn;
  • where is such data transferred to and from;
  • what consents for the use of data have been obtained from data owners; and
  • what rules and regulations apply to the use of such data.

Should you want more information on GDPR or the impact it will have on your business, please see our GDPR section or contact Andy Harris, Head of IP, Data and Contracts ( for more specific queries.

Q: What happens to EU laws in the UK after the UK leaves the EU?


A: There are two types of EU legislation that have effect in the UK: Primary legislation - mainly EU Regulations which have direct effect in the UK all on their own; and Secondary legislation - UK Acts of Parliament that have been passed in response to EU Directives and other law.

The main UK legislation that needs to be repealed is the European Communities Act 1972 (ECA), which provides for the supremacy of EU law. Repealing the ECA will bring an end to the constitutional relationship that exists between EU and UK law. The vast amount of secondary legislation that has been passed to implement EU law will need to be considered by the Government. Parliament has provided for the repeal of the ECA in the European Union (Withdrawal) Act 2018, where all existing EU-derived law will be converted into domestic law. This will allow the UK time to decide which laws it wants to retain and which will be removed and replaced with new UK-based legislation.

It should be noted that even if the UK does not retain any of the EU legislation companies looking to trade in the EU would still need to comply with EU laws such as competition rules, regulations and standards. As part of the amending of the post-Brexit legislation, consideration will need to be given as to how the UK will address EU provisions to allow for trade and movement of people.

This Brexit Q&A section is written as a general guide only. It does not contain definitive legal advice, which should be separately sought as appropriate in relation to any particular matter.

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