The Impact of New Brexit Policies on the Luxury Sector

4 Feb 2021 , 5:06pm

After five years of turbulent negotiations, the U.K and the European Union have now finalized a trade agreement, however uncertainty remains within the detail and wider impact: what will the repercussions be on the luxury and fashion sector and how much is the industry going to suffer?

The fashion industry in the UK employs 890,000 people and contributed £35 billion to the UK economy. The workers in the industry are particularly vulnerable and a strong intellectual property framework is needed in order to protect the UK’s entrepreneurs.

 

Below, we have broken down the different areas affected into a practical guide on how to navigate through Brexit. It is also important to remember that the United Kingdom is still committed to several international treaties such as:

 

  • The Madrid Protocol concernant l’enregistrement international des marques
  • The Geneva and Singapour Trademark Law treaties.

 

 

  1. INTELLECTUAL PROPERTY:

One of the first steps would be to assess how your brand could be affected by Brexit with regards to the UK’s trademark’s regime. 

 

According to the recently published guidelines of the UK Government, International Trademark registrations under the Madrid Protocol in the EU will no longer be valid in the UK after the 1st of January 2021.  

 

Several instances arise out of this change:

 

First instance: If you own an EU trademark registered before the 1st of January 2021, you also become the owner of a Trademark in the UK for the same products and services, without any sort of review of that Trademark. A comparable UK protection has been created and the UK register basically took over the EU regime almost as a copy paste, for a process that was thought to be as simple as possible. However careful consideration needs to be given on how to renew that Trademark later on.

 

Second instance: If your EU trademark is pending on application as of the 1st of January 2021, you will be able to apply to register a UK trademark within a grace period of 9 months (up to and including the 30th of September 2021) so that a priority registration for the EU date can be taken into account.

However, automatic creation of a UK comparable marks will not apply to those EU designations.

 

Third instance: If your international registration has been cancelled and you have filed a request to transform your International trademark into an EU trademark and that request is still pending on the 1st of January 2021, the automatic creation of a UK comparable mark will not apply and a separate UK Trademark application will be necessary.

As above, you will still be able to claim the earlier date assigned to the EU designation, this being up to and including the 30th of September 2021.

 

Updating your Trademark portfolio will be a very important step in order to determine which of your trademarks can benefit from automatic creation of a comparable mark in the UK and those who will need a new registration.

 

Finally, if you are an EU national, you will now have to appoint a British process agent to represent your UK Trademarks and vice versa in the EU for British citizens.

 

The second most important change with regards to Brexit is working rights in the UK.

        2. VISAS:

Services cover 80% of the UK’s economy with London known to be a center for fashion, luxury and retail, where European models, designers, photographers, PR, lawyers and many other international creatives can come and work, for several years or for a last-minute job.

 

But will London’s role as a talent hub for the global fashion industry take a substantial hit as a result of new immigration rules?

 

Below is a breakdown of the different types of working visas that will be available:

 

  • Settled status - After living in the UK for a continuous period of 5 years, the Settled Status allows you to works and stay in the UK for an indefinite period of time and request UK citizenship after those 5 years.

 

  • Pre settled status – gives access to the NHS, study, work and access public funds during 5 years in the UK. In order to get the pre settled status, must have lived within the UK for 3 consecutive months.  

 

  • For a short visa, the UK’s immigration system is now point based and EU workers will be required to obtain either a “tier 5 certificate of sponsorship” or a “permitted paid engagement visit”, for one-off visit. This is a sponsor license to employ someone from outside the UK, including the EU, Iceland, Liechtenstein, Norway and Switzerland. Depending on the work covered, a different type of license will be applicable – for a long- or short-term job offer.

 

The British Fashion Model Agents Association (BFMA) gauges that, of the 15,000 models on the books of UK agencies, less that 50% are British, and Tier 5 requests are expected to triple in 2021.

 

        3. CUSTOMS:

Before Brexit, the U.K was part of the E.U customs union with all taxes and tariffs removed on each country’s goods. In addition, the single market unifies all rules and product standards across countries creating a cheap and quick way to trade with EU countries.

The U. K’s withdrawal from the EU will affect your company if it buys, sells, receives goods or supplies to the U.K or from the U.K, moves goods through the U.K or uses U.K material.

The access to the so called “single market” is now no longer available and items fabricated or labeled in the U.K will consequently be more expensive for E.U customers, with shipping delays and customs administrative duties.

 

To move goods across this new UK-EU border, a customs declaration for your imports or exports will have to be submitted to HM Revenue & Customs. To assist businesses, the European Commission has published detailed guidelines on a wide range of specific topics. In the area of tax and customs, the relevant guidelines can be found below:

 

 

https://ec.europa.eu/taxation_customs/uk_withdrawal_en

 

  • Exercise duties
  • Value added tax (VAT) - goods
  • Value added tax (VAT) – services
  • Customs including preferential services