With Brexit looming around the corner and PM Boris Johnson intent on a hard ‘no-deal’ departure from the EU, it is important to take a step back and assess how the event will affect corporate air travel for both UK and EU businesses. Once the UK leaves the EU, the ‘free air’ policy that governed travel will no longer be in effect. Considering that travel is so important for businesses on both sides of the Atlantic, it is important to discuss how Brexit will affect travel.
How will corporate air travel change for UK and EU businesses?
Travel between the UK and EU was significant because of the ease and freedom that came with it. Member nations of the economic/social bloc allowed free travel, meaning that travellers did not need a visa to travel from one EU country to another. Passengers did not need to spend time in security because the ‘fast track’ lines in airports allowed EU passport holders to pass through border check quickly. The quick procedures would have helped business travel tremendously because businessmen travel far more frequently than tourists. Hence, time saved in bureaucratic procedures would benefit them tremendously.
In all likelihood, this freedom of movement will be gone once Brexit takes place. Once the UK and EU are separate, executives from both sides will spend more time and money on corporate air travel because they will have to meet requirements they did not have to worry about before. Businessmen in the UK will have to get a visa to travel to an EU country and vice versa. Furthermore, they will spend more time at the border check because the UK is no longer part of the same bloc. This means that air travel is not going to be as efficient or as convenient as before, which will disrupt business.
Businesses across different industries are going to be severely affected, but companies who depend on short ‘fly-in and fly-out’ operations are going to be especially affected. One of the reasons behind these short term flights is because of the freedom that came with travelling in the EU – in the past, UK and EU businesses engaged in short-term corporate air travel because a business could simply send an employee to another EU nation without a second thought.
Following Brexit, this freedom will be revoked, businesses will need to get visas to enter different countries, and they will have to meet the requirements of each nation. As a result, this will make certain operations like the ‘fly-in and fly-out’ operations nearly impossible. Considering the immense value corporate air travel brings, this is going to be a huge drawback for both UK and EU businesses. The EU has tried to mitigate the impact of these new rules by passing two laws that allow flights to fly directly between EU and UK cities till March 2020. However, these are only temporary measures and are only meant to help companies brace for the impact of Brexit.
Brexit won’t just complicate corporate air travel, it will make work more complicated. Businesses with cross-Atlantic partnerships will find it much harder to meet their obligations, as travel has become more complicated. Furthermore, UK workers in EU countries and vice versa will have to reassess their legal status in the country. Some countries, like Germany and Luxembourg, have drawn up temporary measures to help UK workers in their countries. However, these measures are only temporary and will expire in 2020 – mere months after Brexit.
Once the UK leaves the EU they will no longer have access to the entire bloc, which means they will have to abide by the rules and regulations of each country. Some countries will have tighter regulation than others, especially in industries, like finance and travel. The change will force both UK and EU businesses to assess the frequency and purpose of corporate air travel because the cost of travel would have gone up, significantly.
Business travel in the future
Business travel is going to face significant changes post-Brexit given that the benefits of a unified bloc no longer apply to the UK. Furthermore, other areas connected to corporate travel will be more complicated, like VAT management. VAT for business travel is going to be even more complex for both UK and EU businesses with higher chances of rejection and less successful rebates.
One method to rectify this issue is to invest in cloud-based tools that can help with VAT calculation. If UK and EU businesses invest in the right tools, they will be better equipped to combat the rising costs of corporate air travel post-Brexit.