You can find all Brexit related information provided by the Government here: www.gov.uk/brexit.
We have put together an overview to help members to prepare their businesses for Brexit. The EU Withdrawal Agreement bill is expected to pass during January 2020. This then leaves an 11-month transition period ending on 31 December 2020, during which the Government will need to conclude a new EU Trade Deal in order to continue trading with the European Union on agreed terms.
We have selected what we believe to be the relevant issues for members: IP Rights (including copyright & trade marks), eCommerce Directive, Trade (including contracts & VAT), geo-blocking, Employing EU citizens and travel to the EU.
Please note this is only a small selection of the technical notices issued by the UK Government and other relevant sources. It is not an exhaustive list and for member’s guidance only. Also note that the Government guidance is regularly changed and updated.
For further information and advice on specific areas, you can contact:
- Legal Advice Line (Howard Kennedy)
The legal advice line is run in association with Howard Kennedy LLP a practice based in Central London with many years of experience in advising picture libraries and photographers.
The service is run on a ‘fair-use’ policy and is open to all BAPLA members in need of professional advice on copyright and general IP law.
Each member is entitled to use the service up to three times a year, with each of those three sessions lasting up to half an hour.
Details on how to use the Legal Advice Line are on the BAPLA website: bapla.org.uk/resources.
- Legal advice for the sector (Open Plan Law)
Open Plan Law is a boutique law firm, established with the specific aim of providing legal advice to the photographic and creative industries. Its founder, Anna Skurczynska, specialises in legal issues affecting the photography sector.
BAPLA members receive the first consultation free of charge, and a 10% discount on legal fees.
- Business Support Helpline
BAPLA members have access to the Croner Business Support Helpline. You can call Croner and get advice from one of their specialists on tax, compliance, HR & employments law and legal issues.
You don’t need to watch the clock as your call to Croner is not ‘on the meter’.
Details on how to use the Business Support Helpline are on the BAPLA website: bapla.org.uk/resources
EU Law on Brexit – general comments
Under the terms of the European Union (Withdrawal) Act 2018, on exit day, all EU law directly effective or implemented in the UK such as regulations (e.g. the General Data Protection Regulation), or directives implemented by UK legislation (such as the Info Soc Directive or the E-Commerce Directive) will be retained as part of English law. Some of the rights granted under these laws were EU-wide. These rights, when retained post-Brexit, will be only UK-wide. So, while the UK rights will continue, there may be rights created by UK residents on the Continent (e.g. databases – see below) which may be lost, or which will not have the same level of legal protection and may be more difficult to enforce.
UK copyright works will continue to be protected abroad, both in the EU and around the world, because of the UK’s participation in the international treaties on copyright, which ensure reciprocal protection for nationals of signatory countries. This does not depend on the UK’s relationship with the EU. For the same reason, the EU copyright works will continue to be protected in the UK.
Brexit may have consequences for other types of intellectual property rights which do not enjoy the same level of international protection. Aspects of copyright (e.g. orphan works) which enjoyed specific treatment under EU law will also be impacted.
The following areas may be affected by Brexit and are likely to be relevant to members:
- Database rights:
These rights were introduced by the EU Database Directive in 1996 and provide the owner of a database the right to restrict the use of or extraction of data from the database without their permission.
Databases that involve a substantial investment in time, money or effort in obtaining, verifying or arranging data, and were created by a European Economic Area (EEA) national, resident, or business receive automatic protection in all EEA Member States. The UK implemented the Directive in 1997 via the Copyright and Rights in Databases Regulations. Protected databases may include databases of photographic collections.
After Brexit, the UK will only recognise databases created by UK residents, and there will be no obligation for other member states to provide database rights to UK businesses. How the EU treats database rights held by UK creators acquired prior to exit will depend on the legislation in the relevant territory. UK owners may want to consider relying on other forms of protection (e.g. restrictive licensing agreements or copyright where applicable) for their databases. For any databases created by EU subsidiaries of UK parent company, it is worth considering assignment of rights in databases and other relevant IP to the UK entity.
- Orphan works copyright exception:
The EU Orphan Works Directive provides an exception to copyright infringement that allows cultural heritage institutions (CHIs) established in the EEA to digitise and make orphan works available online across all EEA member states without the permission of the right holder. UK CHIs register orphan works used under the exception on a database maintained by the EU Intellectual Property Office (EUIPO).
This exception will be removed from statute books on exit day.
- Orphan Works Licensing Scheme:
Those wanting to license orphan works are currently required to consult the EUIPO orphan works database as part of the diligent search. This requirement will be removed from UK legislation, with no other changes made to the requirements of the diligent search or the licensing scheme in general. CHIs will still be able to utilise the UK’s Orphan Works Licensing Scheme, but this will only extend to the UK, and so institutions that currently use the exception may want to consider whether they need to remove works from their websites or limit access to content on a geographical location basis in the EEA, such as implementing geo-blocking to reduce the risk of infringement in the EEA.
- Changes to copyright law after Brexit
- Orphan works and cultural heritage institutions: copyright after Brexit
Trade marks commonly take the form of words, logos, or a mixture of both - you may own several as part of the identity of your business. Trade marks can be renewed every ten years on payment of a fee and may last indefinitely. You can currently apply to register a trade mark at the UK Intellectual Property Office (IPO) for a right that covers the UK, or at the EU Intellectual Property Office (EUIPO) for an EU Trade Mark (EUTM) which covers the whole of the European Union (EU).
Once the UK leaves the EU, any existing EUTMs will only cover the remaining EU Member States, and so will not provide protection in the UK. To ensure that UK protection is preserved, the government will provide holders of existing EUTMs with a comparable UK trade mark on exit day.
If you have registered an EUTM it will continue to be valid in the remaining EU Member States and UK businesses will still be able to register an EU trade mark, which will cover all remaining EU Member States.
All changes will take effect at the time that the UK ceases to be a Member State of the European Union.
- Changes to trade mark law after Brexit
- Changes to EU and international designs and trade mark protection after Brexit
The eCommerce Directive regulates certain legal aspects of ‘information society services’ across the European Economic Area (EEA). Information society services are defined as:
- any service normally provided for remuneration, including indirect remuneration such as advertising revenue
- ‘at a distance’ (i.e. where customers can use the service without the provider being present) by electronic means
- and at the individual request of a recipient of the service.
The eCommerce Directive covers the majority of online service providers, for example online retailers, video sharing sites and search tools, as well as social media platforms and internet service providers.
Immediately following the UK’s exit from the EU, it is expected that the government will continue to align with the Directive, including the liability rules for intermediary service providers.
In accordance with the internal market clause (also referred to as country-of-origin principle) of Article 3 of the Directive on electronic commerce, a provider of information is subject to the law of the EU Member State in which it is established, and not to the various laws of the EU Member States where its services are provided, although the clause does allow for certain exemptions. As of the exit date, information society service providers established in the United Kingdom and providing information society services into the EU will no longer be able to rely on the country-of-origin principle. As a consequence, companies established in the United Kingdom providing information society services into the EU will fall under the jurisdiction of each individual EU-27 Member State.
You should consider determining your online service’s ‘place of establishment’ to understand whether you will be impacted by the loss of the Directive’s Country of Origin Principle.
If you are established outside the EEA, you should:
- check for any compliance issues in any EEA countries in which you operate resulting from the loss of the Directive’s Country of Origin principle
- build on your existing processes for ensuring compliance with the legal requirements relating to online activities in each individual EEA country
- ensure that you have processes in place for ongoing compliance in the event that individual EEA states change their requirements governing online activities
- consider legal or other professional advice
After both the UK and the EU have signed the withdrawal agreement, they would start to negotiate new arrangements. There would be a transition period to prepare for new rules. Without arrangements to maintain preferences, trade would take place on World Trade Organisation (WTO) terms.
The UK Government is working with partner countries to bring into force bilateral agreements. The UK has signed a number of continuity trade agreements with non-EU countries.
Structuring your business
After Brexit there will be changes to the cross-border regimes for UK companies operating in the EU, and EU companies with branches in the UK, because the UK will no longer be an EU member state. These companies will become third country businesses.
- UK businesses that own or run business operations in EU member states will likely face changes to the law under which they operate, depending on the sector and EU member state. For example, this could involve meeting additional requirements in order to acquire real estate and/or requiring additional approvals to operate. Restrictions may be more burdensome for branches or representative offices, as opposed to subsidiaries which have their own legal identity and are incorporated in the EU member state concerned.
- UK companies and limited liability partnerships that have their central administration or principal place of business in certain EU member states may no longer have their limited liability recognised. This is the case in certain jurisdictions that operate the ‘real seat’ principle of incorporation.
- Further information on the requirements in EU member states can be found via the European e-Justice Portal. Information on restrictions in particular service sectors in other countries including EU member states can be found via the Organisation for Economic Co-operation and Development (OECD)
[Note under OECD: The digital network is seen as a service, wherein the digital supply chain consists of 1. content such as audio-visual services, design and other knowledge-capturing products, 2. the capture, compression and ingestion of content into transmission networks, 3. digital rights management, and 4. content delivery].
- Cross-border mergers involving UK companies will no longer be able to take place under Directive 2017/1132 (although they can be structured through private contractual arrangements). As the UK will no longer be an EU member state, the remaining EU member states will no longer be required to give effect to cross-border mergers that do not complete prior to the UK exiting the EU.
Trading between the UK and EU
Most picture agencies will be licensing online to EU customers, rather than moving goods across borders.
The Government website does not have an explicit section relating to this for image licensing, the closest example refers to ‘Online Selling’ (see the section on tax below).
Currently the UK government recognises two types of business products: goods and services. Information about the provision of services regulations provides some information on leaving the EU, which may be applicable:
- UK businesses providing services in the EEA would no longer be covered by the EU Services Directive. As a result, countries in the EEA could treat them in the same way as they treat third country service providers. The regime for third countries differs in many EEA countries.
- This could result in additional legal and administrative barriers for UK firms, such as requirements based on nationality, re-submitting information to regulators and potential loss of access to any online portal to complete mandatory applications and licenses where this is only available to EEA nationals. The tangible impacts this would have on businesses will likely vary depending on sector and the Member State.
- If you’re a UK business with a branch operating in the EU you will become a third country business and will need to comply with specific accounting and reporting requirements for such businesses in the country they operate in.
- The majority of the Insolvency Regulation, which covers jurisdictional rules, applicable law and recognition of cross-border insolvency proceedings, would be repealed throughout the UK.
- Corporate reporting will be largely unchanged, aside from minor changes to reflect the fact that the UK is no longer a member state. International agreements, such as The Hague Conventions, will still apply, however the UK will have to re-enter.
- Business contracts:
Businesses and individuals can generally continue to use the same rules as they do now to determine which law would apply in cross-border disputes. This is because all parts of the UK will retain the Rome I and Rome II rules on applicable law in contractual and non-contractual matters, which generally do not rely on reciprocity to operate. However, it is important to check contractual agreements where there maybe cross-border implications, these will likely vary depending on what each agreement states. You can also check if you can use standard contractual clauses (SCCs) for transfers from the EEA to the UK.
Provisions for goods
If you are exporting physical goods after Brexit you’ll need to follow most of the same rules as traders exporting goods to the rest of the world. Examples of exporting goods may be sending photographic prints, negatives or transparencies.
- Get your business ready to export from the UK to the EU after Brexit
- The Government also provides a dedicated page to exporting or importing ‘objects of cultural interest’. If any of the objects you are moving are ‘objects of cultural interest’ or ‘cultural’ goods e.g. a photographic positive or negative or any assemblage of such photographs over 50 years of age, you should check whether you will need a licence to take them out of the UK. The Arts Council have a dedicated section on their website with useful information here and here.
Trade Tariff on related goods
You’ll need a commodity code to make your customs declaration when sending goods out of the UK or bringing them into the country.
Here’s a sample of trade tariff codes that relate to the photo industry:
- Section VI Chapter 37 01 to 07 - Photographic or cinematographic goods
- Section X Chapter 49 11 (Heading 4911) - Other printed matter, including printed pictures and photographs
- Section XVI Chapter 85 25 (Heading 8525) - Digital cameras, video camera recorders, and television cameras
- Section XVIII Chapter 90 06 (Heading 9006) Photographic (other than cinematographic) cameras; photographic flashlight apparatus and flashbulbs
Selling digital services in the EU
Follow the rules for tax if you sell digital services in the EU, for example, downloadable videos, music, ebooks or software.
You may need permission to:
- provide services in higher risk industries or countries
- take goods abroad temporarily, for example samples for a trade fair
Tax on foreign income
On termination of EU membership, the benefits in the relationship to the United Kingdom conferred by the Directives in the area of direct taxes (Parent-Subsidiary Directive, Interest and Royalties Directive, and Merger Directive) will cease to apply. In addition, primary law no longer applies, as a consequence of which corresponding national rules by which tax benefits were extended to the EU/EEA territory are no longer applicable. (Source: Deloitte Brexit: Legal and Tax Implications)
If you're taxed twice
You may be taxed on your foreign income by the UK and by the country where your income is from. You can usually claim tax relief to get some or all of this tax back. How you claim depends on whether your foreign income has already been taxed [Note: there’s a different way to claim relief if you’re a non-resident with UK income].
Apply for tax relief before you get taxed on foreign income
You have to apply for tax relief in the country your income’s from if:
- the income is exempt from foreign tax but is taxed in the UK (for example, most pensions)
- required by that country’s double-taxation agreement
Ask the foreign tax authority for a form, or apply by letter if they do not have one.
Before you apply, you must prove you’re eligible for tax relief by either:
- completing the form and sending it to HMRC - they’ll confirm whether you’re resident and send the form back to you
- including a UK certificate of residence, if you’re applying by letter.
Once you’ve got proof, send the form or letter to the foreign tax authority.
If you’ve already paid tax on your foreign income
You can usually claim Foreign Tax Credit Relief when you report your overseas income in your tax return.
How much relief you get depends on the UK’s ‘double-taxation agreement’ with the country your income’s from.
You usually still get relief even if there is not an agreement, unless the foreign tax does not correspond to UK Income Tax or Capital Gains Tax.
Contact HM Revenue and Customs (HMRC) or a get professional tax help if you’re not sure, or need help with double-taxation relief.
What you’ll get back
You may not get back the full amount of foreign tax you paid. You get back less if either:
- a smaller amount is set by the country’s double-taxation agreement
- the income would have been taxed at a lower rate in the UK
HMRC has guidance on how Foreign Tax Credit Relief is calculated, including the special rules for interest and dividends in ‘Foreign notes’.
[Note: You cannot claim this relief if the UK’s double-taxation agreement requires you to claim tax back from the country your income was from.]
VAT for businesses
This notice explains the main VAT issues that will affect UK businesses trading with the EU in goods and services. For picture libraries and agencies, again most will be licensing online to EU customers, rather than moving goods across borders, therefore the most applicable information appears to be the rules for UK businesses supplying digital services.
‘Place of supply’ rules for UK businesses supplying services into the EU:
- The main VAT ‘place of supply’ rules will remain the same for UK businesses (‘place of supply’ rules determine the country in which you need to charge and account for VAT).
- For UK businesses supplying digital services to non-business customers in the EU the ‘place of supply’ will continue to be where the customer resides. VAT on services will be due in the EU member state within which your customer is a resident.
- On sales of digital services to consumers in the EU, UK businesses will no longer be able to use the UK’s Mini One Stop Shop (MOSS) portal to report and pay VAT. But they will be able to register for the MOSS Non-Union scheme in an EU member state.
EU VAT refund system:
- Should the UK leave the EU without an agreement, then UK businesses will continue to be able to claim refunds of VAT from EU member states but in future they will need to use the existing processes for non-EU businesses..
- The refund process varies across the EU and businesses will need to make themselves aware of the processes in the individual countries where they incur costs and want to claim a refund. Further information about claiming VAT refunds from EU member states is on the EU Commission’s website.
If you are exporting goods to the EU:
- Businesses may need to plan for customs & VAT to be checked at the EU border and should check with the EU or member states which rules and procedures will apply to their goods.
- Exporting goods to EU consumers: UK businesses will be able to zero rate sales of goods to EU consumers. Goods entering the EU from the UK will be treated like goods from any other non-EU country, with associated import VAT and customs duties.
- Exporting goods to EU businesses: VAT registered UK businesses will continue to be able to zero-rate sales of goods. They will not be required to complete an EC sales list but will need to retain evidence to prove that goods have left the UK. Goods entering the EU from the UK will be treated like goods from any other non-EU country, with associated import VAT and customs duties. Rules for import VAT may differ between EU member states and UK businesses should check the relevant rules in the member state concerned.
Changes to the way you pay or reclaim VAT
After Brexit UK businesses will need to apply the same processes to EU trade that apply when trading with the rest of the world.
The rules and processes for VAT IT systems will change for businesses that:
- claim VAT refunds from EU member states
- check the validity of a UK VAT registration number
- report sales of digital services to consumers in the EU using the UK VAT Mini One Stop Shop (MOSS)
- are under the VAT digital services threshold and make sales of digital services to consumers in the EU
After Brexit, all supplies of digital services to consumers in EU member states become liable for VAT in the consumer’s member state. The £8,818 annual threshold for cross-border sales of digital services to EU consumers will no longer apply.
You will have to charge VAT at the rate where your customer is based and declare those sales to the relevant EU member state.
To declare the VAT charge, you can register for VAT in each EU member state where sales are made, or register for the VAT MOSS non-Union scheme in an EU member state of your choice.
Data protection & geo-blocking
If you operate across the EU or exchange personal data with organisations in the EEA, there may be changes that you need to make before the UK leaves the EU.
You can also check if you can use standard contractual clauses (SCCs) for transfers from the EEA to the UK.
Geo-blocking of online content
The Geo-Blocking Regulation (as of December 2018) bans:
- blocking access to, or forcing redirection away from, a website on the basis of an internet user’s EU nationality or place of residence within the EU
- discrimination by traders on the basis of the customer’s nationality or place of residence when they are purchasing:
- goods online;
- electronically supplied services (such as web hosting or cloud storage, but not copyrighted material such as e-books and streamed movies);
- services provided in a specific physical location (such as a theme park)
- discrimination by traders against a means of payment solely on the basis of its place of issue within the EU
Unjustified geo-blocking and other forms of discrimination based on customers' nationality, place of residence or place of establishment within the EU will no longer apply to the United Kingdom.
Actions for businesses
In general businesses do not need to take any action to prepare for changes to geo-blocking rules. However, it is worth noting the following:
Providing goods or services to the UK and EU
- Traders from the UK, EU and other non-EU countries will no longer be obliged to comply with the EU Regulation for customers based in the UK. They will not be prohibited from discriminating between EU customers and UK customers. This means a trader can redirect UK and EU customers to different versions of a website, offer different terms of access to EU customers compared to UK customers, and would be less restricted in choosing which payment methods they accept.
- Traders who are already complying with the Geo-Blocking Regulation prior to Brexit will not need to take any additional steps to continue to comply with the EU Geo-Blocking Regulation after Brexit - they will be free to continue treating UK and EU customers as they did when the Geo-Blocking Regulation applied if they wish.
Providing goods and services to EU countries
- UK traders who wish to continue selling goods and services into the EU will continue to be bound by the provisions of the EU Geo-Blocking Regulation when dealing with customers in different EU countries. This means that a UK trader will not be able to discriminate between customers in different EU countries, for instance between a French and a German customer.
- Check with your hosting provider if they are based in an EU-country about any geo-blocking applications to your website.
Employing EU, EEA and Swiss citizens
- EU, EEA and Swiss citizens who enter the UK before Brexit will be able to apply to the EU Settlement Scheme to live and work in the UK – the application deadline is 31 December 2020.
- Employers can use this employer toolkit to support employees and inform them about the EU Settlement Scheme.
- Until 1 January 2021, EU, EEA and Swiss citizens will be able to prove their right to work in the UK as they do now, for example by showing a passport or national identity card. Find out more about carrying out right to work checks.
- The free movement of people will end after Brexit, with a transition period until 1 January 2021. EU, EEA and Swiss citizens arriving for the first time during this period will be able to work for up to 3 months. To work for longer, they will need to apply for European temporary leave to remain.
Note: From 1 January 2021, a new skills-based immigration system will launch.
Social security contributions
If your employee is currently working in the EU, the EEA or Switzerland, you need to contact the relevant EU social security institution to check if your employee needs to start paying social security contributions in that country, as well as in the UK.
Travelling to the EU
Brexit will mean changes for UK nationals providing services in person into EEA countries, whether on a short term ‘fly in, fly out’ basis, longer term movement to provide services to clients, or placements within other parts of a business.
Businesses should check whether a visa and/or work permit is required and otherwise comply with the immigration controls in place in each Member State where the service is being provided in person. This would vary depending on the Member State in question. If the provision of services relies on a UK qualification being recognised by a Member State regulator, individuals should check the host state national policies.
The EU Commission has stated that decisions on the recognition of UK qualifications in EU Member States before exit day are not affected.
British passport holders travelling to the EU will need to have 6 months remaining validity on their passport, not including any extra months added to a 10-year passport if it was renewed early.
- Providing services and travelling for business to the EU, Switzerland, Norway, Iceland and Liechtenstein: country guides
- Check a passport for travel to Europe after Brexit