Brexit black cloud threatens UK language business recovery

The EUATC's UK member, the Association of Translation Companies' (ATC) latest Corona & Brexit Pulse brings more news of a recovery on the business front, but continued uncertainty over what’s required of UK LSPs to get ready for 1 January 2021 when the Brexit transition period ends.

Business right now

November Pulse results bring us more positive recovery news compared to September and October, even in the middle of new restrictions in the UK.

In this November survey, only 10% of respondents reported their business still being severely affected, compared to 23% in October.

Just over half of the respondents, 55%, reported business as usual, or business not having been affected by the pandemic, an increase of 5% to October.

When asked about the impact on turnover experienced by the company in the past month compared to budgeted, 49% reported either no impact or an increase of 10-20%, a hugely encouraging development.

Compared to October when 25% of respondents still reported a decrease in turnover ranging from -90% to -50%, the November survey shows these numbers reduced to 20%.

Brexit readiness

‘Time is running out’, as the Government tells UK businesses, but uncertainty over what exactly to prepare for is still a major concern with the UK’s language service companies.

We asked respondents whether their company was ready for business with the EU from 1 January 2021.Out of the 51 companies responding, only 39% said yes, and the rest either know they are not ready, or don’t know what they don’t know.

Individual responses revealed that most of the uncertainty lies with rules around providing services to the EU:

  • Need to know about VAT rules on services to EU countries
  • Still waiting for information on tariffs for services. Employment and right to work in uk have been completed but still too much uncertainty about changes.
  • Information on what will actually be required to continue to sell my services to the EU and not the government’s vague instruction that I read the relevant directives
  • Get some clarity from the government on how it will affect service companies in many areas, eg VAT, UK salaried employees working in an EU country, immigration etc
  • Sensible guidance from the government explaining things like whether VAT will be chargeable on EU sales, final outcome re GDPR and data transmission in EU, intracompany tax…
  • An office in EU or associate company there, and far better still our gvt. to reach a satisfactory agreement with EU.
  • Loads, e.g. info on work visas and tax implications for interpreters sent to Europe (or self if working there). Nothing definitive out there yet….

With just over a month until the end of the Brexit transition period and a deal or no deal between the UK and the EU, 57% of respondents were expecting Brexit to have an immediate impact on business in 2021.