The Post-Brexit legal landscape for SMEs

Posted on February 2, 2021
Posted by Sparqa Legal

Brexit for SMEsFollowing the UK’s exit from the EU on 31 January 2020, there was a transition period until 31 December 2020 whilst the EU and the UK negotiated their future relationship. During this period it was generally business as usual for SMEs. A ‘no deal’ Brexit was narrowly avoided by the agreement of a trade deal between the EU and the UK on 24 December 2020; the EU-UK Trade and Cooperation Agreement (‘Brexit Deal’), which came into force on 1 January 2021. 

Now that the Brexit dust has started to settle, we answer some key FAQs about how an SME’s business operations may be impacted. You can also use our free Brexit checklist for an overview of some of the important issues thrown up by Brexit and what steps your business should consider taking. 


1. Does my business still need to comply with the GDPR post Brexit?

The short answer is, yes it does!

The GDPR has been retained in UK law as the UK GDPR and the key data protection principles and obligations under the UK GDPR currently remain the same. This means that if you don’t have any contacts or customers in the EEA, you’re probably already compliant. To find out more, see our Q&A on Introduction to the GDPR

If your business does have contacts or customers in the EEA, you’ll now need to comply with both the EU GDPR and the UK GDPR when processing their data. This might mean that you need to appoint an EU representative if you don’t have a branch or office in an EEA country. Brexit also has important implications for any personal data you collected from the EEA before 1 January 2021. Our Q&A on Data protection obligations explains how Brexit affects your data protection compliance. 


2. Can my business still transfer personal data outside the UK?


It depends on the context of the transfer:


  • Transfers to and from the EEAThere are currently no changes to transfers of personal data to or from countries in the EEA; the Brexit Deal allows a further transition period of up to six months to allow the continued free flow of personal data from the EEA to the UK whilst the EU Commission makes an adequacy decision for the UK.


  • Transfers to and from countries outside the EEAAs before Brexit, unless an exception applies, transfers to countries outside the EEA can only be made where the transfer is either covered by an adequacy decision or appropriate safeguards (eg Binding Corporate Rules (BCRs) or Standard Contractual Clauses (SCCs)). The difference is that UK based businesses will now need to make sure that they can rely on the UK versions of those transfer mechanisms; ie UK adequacy regulations, UK BCRs or UK SCCs.


For more detailed guidance about how tranfers of personal data outside the UK are affected post Brexit, see our Q&A on Sharing personal data outside the UK.



3. Can my business hire staff from the EU post Brexit?

It depends.

Free movement with the EU ended on 31 December 2020, which means you can only recruit EEA or Swiss nationals if:

  1. they were already lawfully residing in the UK prior to 1 January 2021; these individuals have until 30 June 2021 to apply for settled or pre-settled status under the EU Settlement Scheme; or
  2. your business is an approved sponsor and can provide EEA or Swiss nationals with a working visa. 

For more information about hiring staff after Brexit, and how your current EEA or Swiss staff members might be impacted, see our Q&A on Hiring staff after Brexit



4. Has Brexit affected my staff members’ employment rights?


You should continue to ensure that your staff members’ pre Brexit employment rights are protected. 



5. Has Brexit affected imports and exports?


Changes have been made to the way goods are exported and imported to and from the EU and border controls are being introduced in three stages up until 1 July 2021. The government recommends that you engage a customs intermediary (like a freight forwarder or customs broker) as soon as possible to help you with importing and exporting from and to the EU. They can also help you classify your goods properly and evidence their origin. Engaging a customs intermediary is particularly important if you are exporting or importing controlled goods, as you cannot delay customs declarations. 

See our Q&A on Negotiating terms with suppliers or subcontractors for more information. 



6. Does Brexit affect online services provided in the EEA? 


If you provide online services in the EEA, you will need to ensure that you follow the rules of each EEA country you operate in. Before Brexit, online service providers (such as online retailers, video sharing sites, and social media sites) were permitted to operate anywhere within the EEA provided they complied with the laws of the country they were established in (such as the UK). However, since Brexit online service providers are now required to comply with the rules in each country they operate in. 

If you provide online services in the EEA, you’ll need to check whether you are required to comply with the laws of each EEA country you are operating in, and you may need to get professional advice on how to ensure you continue to comply with the relevant laws. 

See our Q&A on Brexit and online sales for more information.

The content in this article is up to date at the date of publishing. The information provided is intended only for information purposes, and is not for the purpose of providing legal advice. Sparqa Legal’s Terms of Use apply.