28 January 2021

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The Brexit Deal: What does it mean for business driving and travel?

Following the announcement of a trade deal with the European Union at the beginning of the year, business and trade bodies are starting to understand what impacts, or otherwise, it will have for fleet operations, both UK based and travelling to Europe. 

Here we look at what the experts are saying, and where you can go for help if you need more advice.

The fleet industry reaction

The signing of the free trade deal with the European Union drew qualified support from the fleet and automotive industry – with relief rather than jubilation the main emotion.  

This is because many of the impacts, especially around pricing and supply of vehicles and parts, have yet to be fully understood. 

Some manufacturers, such as BMW [1] and Ford [2], have announced price rises for certain models which have been blamed on Brexit-related issues such as ‘rules of origin’ legislation on parts. This is the case with the BMW i3 and some Ford Puma and Fiesta models, because a percentage of parts fall outside of the established limits in the trade agreement.

Despite these so-far isolated prices rises, BVRLA Chief Executive Gerry Keaney said the signing of the Brexit deal was “a big relief and will provide a welcome boost for the UK automotive sector, which can now plan for 2021 and beyond with more confidence and certainty. Avoiding tariffs on vehicles and parts is essential.

Stephen Haddrill, Director General of the Finance & Leasing Association added: “We appear to have a deal that will enable UK goods to be sold without tariffs or quotas in the EU market – that bodes well for business confidence, leading to renewed investment and lending as we enter 2021 and begin the long economic recovery from the Covid impact.

Mike Hawes, SMMT Chief Executive reckoned the agreement was about damage limitation, but said “while no substitute for the completely free and frictionless trade with Europe we formerly enjoyed, will address immediate concerns. The TCA provides the opportunity for tariff and quota-free trade, foundations on which the industry can build.

Crucial to the fleet sector and keeping wholelife costs down was that the agreement ensured there were no tariffs on parts. Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA), which represents franchised car and commercial vehicle retailers in the UK, said: “Franchised retailers will now be able to focus on what they do best, ensuring that customers get great service and value for all their vehicle-related needs.

However, the Vehicle Remarketing Association (VRA) is warning the deal leaves many unanswered questions that could have implications for the UK motor industry.

The trade organisation says that several key points surrounding the future of manufacturing and cross-border movement of vehicles remain vague or undefined.

Sam Watkins, chair at the VRA, said: “The deal that we now have raises as many questions as it answers. It is generally described as ‘thin’ and that is accurate in that there are several areas where there is very little detail for the motor industry or remarketing.

She said that the hope was that the degree of certainty now present would enable near-term investments in manufacturing to go ahead as the threat of disruption to UK manufacturing has receded.

Looking ahead though, Watkins said: “Substantial costs have been added in terms of the new customs arrangements, and the regulatory background against which car makers operate is unclear in several important areas” adding that presumably, these will be clarified in the coming months and years.

She continued: “It does perpetuate an effect that has been present ever since the Brexit referendum – that it is difficult to make plans and for investment decisions to be finalised without all of the facts available. There remains a lot of uncertainty.

The practical changes of driving in the EU

While vehicle and parts supply remain relatively unchanged for the time being, there are some changes for businesses that have employees driving in Europe.

At the border

According to the UK Government, UK drivers need at least 6 months on a UK passport to travel to the EU and they may have to show their return ticket and money for their stay.

For more advice on making business payments while abroad, visit our guide here.

If you are taking goods out of the UK while on business, for example even temporarily to a trade show, you may need an ATA Carnet. There is more detail here of what to do and how to apply here.

Insurance

To prove they are insured for the journey, business drivers entering Europe will need a green card - a document of proof provided by your insurer. It is recommended that the insurer is contacted six weeks before travelling in order to have the time to supply it. A separate green card is needed for trailers.

GB stickers

GB stickers are back. Unless the number plate has GB printed on it (Union flags don’t count), all drivers will now need one.

EU entry requirements

Business travellers entering the EU, Switzerland, Norway, Iceland or Liechtenstein for less than 90 days in a 180-day period (for example, going to business meetings) are unlikely to need a visa or work permit.

For more details on when a visa will be needed, please click here.

Driving licences

Photocard driving licences are still eligible for use in the EU and if they have one employees will not need International Driving Permit, although they may do if they only have a paper driving licence or a licence issued in Gibraltar, Guernsey, Jersey or the Isle of Man.

To find out who needs an IDP, please click here.

Vehicle certification

As before, business users travelling abroad in a UK registered vehicle must carry its original Vehicle Registration Document (VRD) and V5. If the vehicle is hired or leased, the hire/lease company will not usually release the original documentation and so employees will need to carry a VE103 form to show they have permission to take it out of the UK.

Further research

To find out more specific details about what your company may need when doing business in the EU, visit the Government’s Brexit Checker here.

Sources:

[1] https://www.fleetnews.co.uk/news/manufacturer-news/2020/11/16/brexit-bmw-new-car-price-increase-irrespective-of-trade-deal

[2] https://www.standard.co.uk/business/business-news/url-cars-extra-cost-brexit-fiesta-b872198.html

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