The UK/EU Trade Agreement - and what it means for service contractors
Updated: May 4, 2021
With the dust finally settling after the UK/EU trade agreement (TA) was finally signed, it’s now becoming clear what it means for businesses trading with the EU. If you’re a UK business, looking to bring in EU contractors, then read on, and get in touch with the IEMC to find out more.
Which workers are we talking about?
EU workers coming to the UK to provide services - so, maybe a German company that has contracted with a UK business and then needs to send their workers to the UK, to work in manufacturing.
Does the TA cover them?
The TA has a section on what it calls contractual service suppliers – essentially EU workers coming to the UK to provide short-term services to a UK customer, subject to some rules.
So, all is well then?
Not quite – frequently, UK firms may have contracted with an EU business to supply goods, or services. And they then later on want the workers of the EU business to come to the UK. But, the TA says that the EU business has to contract directly with the final UK consumer, meaning that if the contract was between the UK firm and the EU business, but the final consumer has contracted with the UK firm, the TCA can’t help.
What other problems are there for EU service suppliers?
The Home Office has produced guidance on this part of the TA. Their guidance makes it clear that there must be a genuine contract, between the business in the EU employing the workers, and the final UK consumer, so there is no easy fix. The guidance also makes it clear that if the EU business has a UK footprint (a subsidiary, or distributor maybe), then this route cannot be used.
What about UK businesses that are EU owned, or own an EU company?
Then this route isn’t going to be feasible – as if there is a UK arm linked to the EU business, the EU workers cannot come into the UK this way as contractual service suppliers.
What are the alternatives?
There are some, but they are limited and many UK firms will find them unhelpful . Either the workers could look at coming to the UK as business visitors, or they can go through the UK immigration system and apply for a visa with a sponsoring employer.
What are the rules around business visitors?
EU or other workers could enter the UK as visitors, but they cannot generally undertake customer facing work. There is a list of permitted activities for visitors and there is a route for manufacturers to send their workers to the UK if there is a contract for the supply or lease of equipment to a UK organisation.
Does this mean that EU workers can enter the UK and then work for the customers of a UK company that they have sold their goods or services to?
No – this is not what the rules are intended for, and guidance from the Home Office states that UK firms cannot hire out staff sent to them from an EU business to their UK customers and the EU firm needs to deal with the final UK consumer.
Are there any other options?
They are limited – either the EU workers could apply for a visa as a skilled worker, or if they work as part of the same company, an intra-company transferee, they may enter the UK to work for the UK arm of the company, but these options come at a cost and an intra-company transferee cannot undertake customer facing work.
What are the lessons from all of this?
UK based firms need to be aware that working through traditional supply chain models will in the future be more difficult where there are services that need to be supplied by EU businesses who do not contract with the final UK consumer – they may need to change the way that they operate, splitting services into separate contracts, or budgeting for delays and extra costs in bringing in EU workers to the UK.
How we can help
Our EU business consultants can advise you, reviewing your existing contracts, helping you make changes, and how you can operate within the new UK/EU TCA and UK immigration rules. Get in touch with us at firstname.lastname@example.org.
Author: IEMC 02/21
Need further support?
Email GMCC Trade team at email@example.com