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What are the implications for businesses in the professional services industry if Britain leaves the EU without a deal?

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The accounting software provider Sage, recently prepared a white paper to help businesses in retail, pharmaceutical, agricultural and professional services sectors, to decide what to do if the UK leaves the EU without a deal.

According to Sage, businesses in the professional services industry have to consider in particular; continuing cross-border data flows; mutual recognition of professional qualifications; and access to talent and movement of people. The following is an excerpt from the white paper;

Continuing cross-border personal data flows

Restrictions on movement of personal data are likely to disproportionately affect services firms, given potential high reliance on cross-border personal data flows. Without appropriate safeguards, even internal emails from EU to UK colleagues could breach data compliance rules under the GDPR. You will have to assess where you have relevant flows of employee and customer personal data, including to any third parties that you use. You will also have to ensure appropriate legal safeguards such as standard contract clauses are in place.

The UK Government has said it will not impose additional restrictions for movements of UK personal data to the EU/EEA, but transfers of personal data from the EU/EEA to the UK are likely to require additional safeguards. Unless the European Commission grants an adequacy decision for the UK in time, you will have to implement safeguards to continue transferring personal data.

The UK Information Commissioner’s Office (ICO) has released guidance, including an interactive self-assessment tool, that could help you to determine which data safeguards might be most appropriate to your organisation. For many businesses, this will be standard contract clauses, and you should consider the time needed to implement these safeguards, particularly where it requires re-opening existing contracts. You will also have to review whether there are any Member State or contractual requirements for personal data to be located in a particular jurisdiction.

Mutual recognition of professional qualifications

Regulated subsectors of the professional services industry, such as lawyers and auditors, rely on mutual recognition of professional qualifications to provide their services to the UK and to the EU.

The specific requirements vary by sector, i.e. there are different requirements for lawyers than for auditors. In the absence of any agreement, there will be no system of reciprocal recognition of professional qualifications between UK and EU, meaning that UK-recognised professionals may not be able to deliver services and advice in the EU.

Access to labour and movement of people

Due to the specialist skills required by certain professional services firms, it may be harder for businesses to secure the key skills they require. All non-UK nationals will be subject to the new immigration regime to work in the UK, coming into effect from 2021, and it may be administratively more difficult and costlier to recruit international employees. You could consider different options to access key skills, such as training apprentices, or offering increased financial and non-financial incentives, like flexible working.

While both the UK and EU have expressed intent to have reciprocal arrangements for short-term visitors, these will not allow UK nationals to work in the EU, even on a temporary basis. You should review where you are delivering services internationally and the relevant work requirements for that Member State. The UK Government has announced a temporary leave to remain scheme for EU/EEA citizens, under a no-deal scenario, that will allow EU/EEA workers to come to the UK for up to 36 months. There may also be impacts on social security for employees and employers when working internationally, for example, with liabilities in both the UK and the EU Member State.

For more information visit https://www.sage.com/en-gb/blog/no-deal-brexit-business-plan/