BREXIT UPDATE: Government Announce £20 Million SME Brexit Support Fund

Government makes grants of up to £2,000 available to help small businesses cope with post-Brexit paperwork and costs when trading with the EU

Small businesses that only trade with the EU can apply for a £2,000 grant through the Brexit Support Fund. The fund will open up for applications in March.

The government has made available £20 million for the Brexit Support Fund . The fund aims to help small businesses cope with new customs, rules of origin, and VAT rules import that come into force from April and July.

The new import controls will come into effect in three stages up to July 1 2021. Further details may be found in the Border Operating Model.

Businesses do not have to complete new import declarations for up to six months, unless they are moving controlled goods.

UK Trade Marks and Designs after 1 January 2021

In just 44 days there will be changes to how the intellectual Property (IP) system and the Intellectual Property Office (IPO) will operate. The following covers the upcoming changes to trade marks and designs, unregistered designs, and parallel trade from the UK to the EEA as a result of the Withdrawal Agreement.

Trade Marks and Designs

At the end of the transition period, registered Community designs (RCDs) and unregistered Community designs (UCDs) will no longer be valid in the UK.

These rights will be immediately and automatically replaced by UK rights. If you own an existing right, you do not need to do anything at this stage.

From 1 January 2021, any existing RCDs, UCDs, EU, and International trade marks will only cover the remaining EU States.

Registered Designs

Upcoming legislative changes will ensure the holder of an RCD is provided with an equivalent UK right. They will retain the registration and application dates recorded against the corresponding RCDs and will inherit any priority dates. Re-registered designs will be created at no cost to the RCD holder.

As independent UK rights, they may be challenged, assigned, licensed or renewed separately from the original RCD.

If you hold a pending RCD application on 1 January 2021, it will be possible to apply to register a UK design up to, and including, 30 September 2021. So long as the UK application relates to the same design filed in the pending RCD application, the UK design will retain the earlier filing date of the pending RCD.

Once created, a separate renewal fee will apply both for that UK right and the corresponding RCD. These will be paid separately to the ICO and EUIPO.

Unregistered Designs

Designs protected in the UK as a UCD before 1 January 2021 will be protected as a UK continuing unregistered design and will be automatically established on 1 January 2021. It will continue to be protected in the UK for the remainder of the 3-year term.

Under the new law, a UK unregistered design right will be created called a supplementary unregistered design (SUD). The terms of SUD protection will be similar to that already provided by UCD. Both SUD and UCD provide protection for both 2D and 3D designs for a period of 3 years. However, this protection will not extend to the EU.

SUD will be established by first disclosure in the UK. It is important to note that first disclosure in the EU will not establish a SUD whilst first disclosure in the UK will not establish a UCD. It is vital to carefully consider the manner of first disclosure as the novelty of the design could be destroyed if done incorrectly. Both the IPO and EUIPO can provide further guidance on first disclosure.  

Parallel Trade from the UK to the EEA

Parallel trade is the import and export of genuine IP protected goods. This occurs when the IP rights in these goods are ‘exhausted’. This means they have been placed on the market of a specific territory by, or with the permission of, the rights holder. There will be some changes to the exhaustion of IP rights systems post-Brexit.

Goods placed on the UK market after the transition period may no longer be considered exhausted in the EEA. This means that a business exporting these goods from the UK to the EEA may need the right holders consent.

In the event that your business is exporting IP-protected goods to the EEA which have already been placed on the UK market, you may need to contact the rights holder to get permission to continue this practice after the transition period ends.

Copyright

Most UK copyright works will still be protected in both the EU and the UK. This is because of the UK’s continued participation in the international treaties on copyright. For the same reason, EU copyrights will continue to be protected in the UK.

If you do not take action, there is a risk your business operations will be interrupted. You can find out what other actions you may need to take by using the checker tool.

Brexit Transition Period for ROI Companies: Revenue Bond

The UK may have exited the EU on 31st January 2020 however, there will be a transition period running until 31st December 2020. Until then the UK’s relationship with the EU, at least from a trading and regulation perspective, will remain unchanged and the UK remains in the single market and customs union. As a result, there are currently no visa requirements for workers, extra charges or checks being introduced for imports and exports, or revenue bond requirements on Irish companies with only UK directors.

Section 137 Revenue Bond Requirement  

During the transition period Irish companies with only UK directors continue to be exempt from the requirement in Section 137 of the Companies Act 2014 which states that every Irish registered company must have at least one director who is a resident in the European Economic Area (EEA). The EEA consists of the EU member states in addition to Iceland, Liechtenstein, and Norway.

However, there are two further options to ensure compliance with Section 137:

Section 137 Bond

The first option is the arrangement of a bond to the value of €25,000 for a minimum period of two years. The company must renew and submit the next bond to the CRO before the expiration of the existing bond. The purpose of the bond is to act as an insurance for the company to pay a fine or penalty imposed upon it under the 2014 Act or the Taxes Consolidation Act 1997.

Section 140 Certificate

Another option is a Section 140 certificate which exempts a company from the EEA director requirement. This can be obtained by making an application to the Revenue Commissioners supporting the position that it has “reasonable grounds to believe that the company has a real and continuous link with one or more economic activities being carried out in the State.”

This is established by satisfying at least one of the conditions of Section 140(9) of the Act. However, the certificate is only available for existing companies, not those which are newly incorporated as they will be unable to demonstrate a real link at the point of incorporation.

After receipt of the statement from the revenue an application must be made to the CRO within two months.

If the link ceases the company must either appoint an EEA resident or establish a bond.

Subsidiaries

The Act provides an exemption for subsidiaries where a guarantee is given by the parent company to cover liabilities.

The exemption only applies where the parent company is established and registered in an EEA state. Therefore, a no-deal Brexit would prevent Irish subsidiaries of UK companies from relying on the exemption.

Non-Compliance

Non-compliance with Section 137 is a Category 4 offence which can result in a fine of up to €5000. In addition, the Registrar has the power to strike a company off the register.

For more information on the bond requirement or on setting up your own company in the Republic of Ireland, contact us via our website or give us a call on 028 9055 9955.

GDPR and Brexit

The introduction of the General Data Protection Regulations (GDPR) in May 2018 altered the way companies in the UK and EU collect, process, and store personal data. The following highlights the changes which the GDPR has introduced and the potential effects of Brexit on data handling.

GDPR Key Changes

It is important that you are aware of GDPR key changes and how to implement GDPR. To help you with this, we have summarised the key points:

There is an increased territorial scope – it applies to all companies that process personal data of people residing in the union, regardless of the company’s location.

You must give data subjects more information when you are collecting their personal data.

There are new regulations for gaining consent to collect personal data. Both consent and explicit consent now require clear affirmative action.

The age barrier for collecting data is rising from 13 to 16.

You must delete data that you are not using for its original purpose.

People can revoke their consent to data processing at any time, and it must be easy for them to do so. More control must be given to the data subjects.

You have 72 hours to notify data breaches to regulators, unless the breach is unlikely to result in a risk to data subjects.

There is a single national office for complaints.

Large data controllers must appoint a Data Protection Officer.

If you do not comply with the GDPR, you could face fines of up to €20,000,000 (roughly £18,000,000) or 4% of your total global annual turnover for the preceding financial year.

Fines and Breaches

2019 has seen proposed fines of £183m and £99m handed to British Airways and Marriot whilst Facebook suffered a £500k fine in late 2018. Overall, in the first nine months there were 206,326 cases of GDPR breaches across 31 EU countries.

Brexit

The GDPR applies to anyone who processes the personal data of EU residents. This means that, whether your business is small or international, you must comply with the new regulations for secure collection, storage, and usage of personal information.

Whilst the GDPR is an EU regulation, UK businesses must still comply with the new regulations even if there is no data collection from EU members. This is because in 2018 the GDPR regulations were made part of UK law, forming part of the Data Protection Act 2018.

GDPR Obligations on SMEs

Article 30 of the GDPR distinguishes between the obligations placed on companies such as Facebook and those placed on SMEs employing fewer than 250 people. Nevertheless, SMEs must bear the following stipulations for GDPR in mind:

If the processing carried out is likely to result in a risk to the rights and freedoms of data subjects, the processing is not occasional, or the processing includes special categories of data as defined in GDPR Article 9 then the GDPR will affect small businesses under 250 employees.

Any breaches in data security must be reported immediately to data protection authorities such as the Information Commissioner’s Office (ICO) which is responsible for enforcing GDPR in the UK. Ideally, breaches should be reported within 24 hours if possible but at least within 72 hours.

Individuals have more rights dictating how businesses use their personal data. In particular, they have the ‘right to be forgotten’ if they either withdraw their consent to the use of their personal data or if keeping that data is no longer required.

It is also possible for individuals to sue companies for breaches to recover not only material damages, but non-material damages such as distress.

Marketing and Awareness

The GDPR was introduced to give consumers more visibility and control over how their personal data is being collected, processed, and stored. The Right to Access allows consumers to confirm with companies what data is being collected from them and how it is being processed.

You may have noticed recently that many businesses currently in possession of your data have had to re-confirm your consent as a preventative measure to protect against GDPR breaches. In the new climate of data protection, the awareness of consumers means that re-permissioning consent will likely result in a significant reduction of subscribers. This is illustrated by Henley Festival who saw their subscribers drop from 24,000 to 8,000.

This risk may be an unnecessary one if your company already possesses one of the six legal bases to process data other than consent. Deputy Commissioner of the ICO, Steve Wood, has busted the myth that fresh consent is required to comply with GDPR so think carefully before putting your database at risk.

Ireland – The ideal company location after Brexit

Effect of Brexit

As Brexit draws closer, companies are facing a potentially serious threat to business operations which cross European borders. With the trade deals still up in the air it is likely that added customs, VAT, and tariffs will become a reality.

Why Ireland?

Ireland is in a unique position, geographically and historically, and could offer the ideal solution to Brexit. The British authorities have announced their plans to remain part of the Common Transit Convention post Brexit. This will allow Irish businesses to export between Ireland and UK to their destination with reduced customs checks and controls. Additionally, Ireland will maintain the EU Free Trade agreement allowing businesses to trade across European borders freely.

Beyond the advantages of cross-border trade, Ireland is the ideal location to set up a company in the EU post-Brexit for a number of reasons:

Ireland has one of the lowest corporate tax rates in Europe at 12.5%

Ireland will be the only English speaking country in the European Union

Euro currency eliminates exchange fees when dealing with most EU countries

The Irish government has been busy preparing for a hard Brexit, publishing the Brexit Omnibus Bill on 22 February 2019. The Bill covers 17 areas that will need legislation in the event of a no-deal Brexit. If you are a non-Irish resident and considering the incorporation of an Irish company in the wake of Brexit we strongly recommend you act quickly. Once an Irish company is incorporated it will require applications for tax registration and a corporate bank account which can take a few weeks.

Moving a UK company to Ireland would enable it to retain an EU presence and avoid additional costs to trade. We at The Company Shop have built a strong reputation in the Republic of Ireland, specialising in the formation of ROI companies for over a decade. For more information on getting your Irish company set up give us a call on 028 90559955 or contact us on our website.

Brexit – Preparing your Business

Brexit uncertainty takes people to the streets.

With Brexit approaching there remains a high level of uncertainty over the effects this will have on local businesses. It is important to act now rather than waiting for the dust to settle come exit day. In prepping for life after Brexit keep the following in mind:

Changing trade rules

In the event of a no deal Brexit there would be no transition period. UK trade rules would most likely revert to those covered by the World Trade Organisation (WTO). This means that goods would be subject to custom checks and tariffs, increasing costs and slowing processing times. Ensuring your current pricing structure is robust and that operations are running as efficiently as possible will ease the change to WTO rules.

Managing your supply chain

Currency fluctuations have always been a challenge for businesses trading with EU countries. These will likely worsen after Brexit. Increasing the percentage of products sourced from the UK will allow your company to bypass new import costs. If this is not possible it is advised to build a strong relationship with current suppliers. A global security account lets you pay suppliers in their own currency, both saving costs and improving relationships with suppliers.

Avoiding currency uncertainty after Brexit

A specialised currency strategy will be key post-Brexit. Currency experts will be able to work with your business in order to develop the best strategy. Setting up a forward contract will allow you to lock in exchange rates for a future date, making it easier to plan for future payments and budget efficiently. Dealing with suppliers in this way greatly improves your negotiation position.

Additionally, Specialist payment providers grant access to the most competitive exchange rates and can offer advice on managing your international payments.

Knowing your target markets

It’s not all doom and gloom! The EU will remain an important trade partner with the UK. 43% of British trade is with the EU and a large portion of this trade is likely to remain. By focusing a pricing and marketing strategy in the UK market you will be able to boost sales and reduce costs.

Looking inward is also not the only option. There may be opportunities in the near future to expand markets beyond Europe. In fact, Canada have shown considerable interest in UK exports. A reason for this being the growing appetite for ‘Brand Britain’.

The internet is also a powerful tool to expand your business. The UK is home to the 3rd largest e-commerce market in the world allowing international markets to be easily reached through marketplaces such as Amazon and Alibaba.

A majority of UK businesses remain positive about international trade and now is the time to get ahead of the curve so that your business can not only survive, but thrive after Brexit. 

Further information on the wider-ranging implications of Brexit can be found here.

Setting up a company during Brexit

Setting up a company in the current environment can be a scary prospect. Here at the Company Shop, using our expertise of UK and Republic of Ireland company formations, we can guide you through the process with ease.

Do not hesitate to call us at 028 9255 9955 or contact us online!

Converting your Republic of Ireland Company

The Companies Act 2014 was signed into law by the President on 23rd December 2014 and became effective on 1st June 2015. From this date Republic of Ireland companies will be incorporated with either a Constitution or a Memorandum of Association.

There are a number of differences between the new (LTD) Limited company and the (DAC) DESIGNATED ACTIVITY COMPANY – some of which are listed.

(LTD) – LIMITED:

One director and one secretary (two persons) only required.

Constitution only – no requirement for Memorandum and Articles of Association.

No company objective(s).

No requirement to hold an AGM.

(DAC) – DESIGNATED ACTIVITY COMPANY.

Must have at least two directors.

Constitution including Memorandum of Association and company objectives.

Required to hold an AGM.

All companies incorporated in the Republic of Ireland prior to 1st June 2015 will – under the above Act – be required to be convert to the Act by 30th November 2016. After this date if a company has not converted certain people may apply to the High Court for an order directing that the company be re-registered as a DAC.

We can advise and assist in the completion of the conversion and provide the new Certificate of Incorporation together with updated Constitution or Memorandum of Association as applicable.

Conversion fee starts at £99 + VAT.

Contact us today to start this process.