New challenges for the European hospitality sector as post-Brexit agreement enters into force

 

The trade and cooperation agreement detailing the EU-UK future relationship provisionally entered into force on January 1st. How will this unprecedented treaty impact our sector?

Issues for tourists and hospitality entrepreneurs

International travel – Business travellers and holidaymakers will need to hold a passport with at least six months’ remaining validity and may face new checks at border control. At least for now, travellers will not need a visa if staying in the EU (and vice versa) for less than 90 days.

Employment – With a post-Brexit points-based immigration system designed to favour high-skilled workers over low-skilled ones – the majority in our sector – most EU citizens with a salary lower than £20,480 will not be able to take a job in the UK.

Fresh foodstuff – Restaurants importing perishable goods – such as meat and seafood – are going to face extra paperwork and troublesome delays that might undermine the freshness of the products imported. This poses issues especially for SMEs and the hospitality supply-chain.

Tariff-free? – While the agreement promises zero tariffs or quotas on traded goods to ensure lower prices for consumers, only products predominantly produced or processed in the UK will obtain zero-tariffs access according to the so-called rules of origin.

Next on the EU agenda

Given the last-minute nature of the agreement, the European Parliament did not have a chance to ratify the treaty. MEPs will have to examine and approve the text before its official entry into force. The treaty is set to apply provisionally until February 28th – with already talks of delaying this deadline to sometime in April.

Hospitality sector in the UK to work closely with the government

According to UKHospitality, working hand-in-glove with the government in the upcoming months will be key to face the combined effects of the coronavirus pandemic and the entry into force of the post-Brexit agreement.

The industry has proved historically, and even in the last twelve months, that it can drive impressive growth at short notice, with the right conditions. What the sector needs at these delicate times, amongst other things, is: ensuring that the VAT cut to 5% is applied on the broader UK sector and extended for 12 more months; enacting a further business rates holiday for hospitality for 2021/22 to protect communities and repair businesses; ensuring increased liquidity and support for workforce and the supply chain; extending the repayment and interest-free period for all government-backed loans to 10 years and deferring tax payments until December 2021.

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