Britain is due to leave the European Union on 29th March 2019. What does this mean for your travel business?
If a Brexit deal isn’t ratified before 29th March 19 and the UK government does not seek an extension of time in which to continue negotiating, the UK would exit the EU without a deal and the UK would fall back on World Trade Organisation (WTO) Rules. Whilst it has been argued that such rules would allow businesses to sell into the EU market on reasonable terms, an abrupt transition to WTO terms would inevitably be disruptive:-
|What might happen?||What should you think about?|
|Slump in sterling||Review surcharging provisions in booking conditions and consider the impact on commercial agreements.|
|TOMS VAT inapplicable||Consider the processes and timelines involved in registering for VAT purposes in each Member State where you deliver services to customers.|
|Visas and passports – introduction of electronic travel authority (ETA) and extended period of passport validity for UK nationals entering the EU||Additional time would therefore be required for passport and security checks. Consider whether customers would meet the new passport validity requirements and provide advice for customers to renew their passports, where necessary.|
|Withdrawal of European Health Insurance Card (EHIC)/Travel Insurance||Make provision for medical treatment as part of personal travel insurance arrangements. It is possible that travel insurance costs would increase, particularly for those customers with pre-existing conditions, some of whom may not be able to obtain appropriate cover. Advise customers to obtain appropriate travel insurance cover for their individual needs.|
|Aviation – bare-bones agreement to maintain direct flight links between the EU and UK or approach EU Member States individually for bilateral agreements.||Uncertainty and instability across the entire industry.|
|Driving abroad – licences and insurance||consumers may need to obtain a valid international licence and enhanced insurance to drive in mainland Europe although the EU and UK have agreed, in principle, a mechanism that will enable UK consumers to continue to benefit from their existing insurance arrangements throughout Europe through the current Green Card scheme.|
|The changing nature of commercial contracts||Think about issues which could make a contract less profitable or difficult to perform, either for you or the other party post-Brexit. This may include issues around licenses and consents, the freedom to provide services, freedom of movement for workers, fluctuation in currency exchange rates and other financial factors.
Ascertain whether they could be varied to take into account the possible impacts of the UK’s departure from the EU.
For new contracts, you should consider expressly providing for situations where the parties’ ability to perform, or their costs of performing, the contract are affected by the UK’s departure from the EU or consider a binding commitment to renegotiate.
|Financial Protection, Bonds and Insurance (Liability and Travel)||UK established organisers selling in the EU will not be able to rely on their ‘home country’ financial protection. You may then be required to engage with each EEA Member State’s local licensing and/or protection requirements.|
|Freedom of movement and mobility – ends on the UK’s departure from the EU||Conduct an audit of existing employment practices for staff working within the EU, and consider alternative models available in a no-deal exit scenario.|
|Legacy rights for resident EU/UK nationals – likely that the relevant national authority would determine the employment rights of individuals.||Share internally all information issued by the Home Office on the settlement of EU nationals within the UK post-Brexit.|
|Non-recognition of Professional Qualifications||Consider whether staff are currently utilising the Mutual Recognition of Professional Qualifications Directive and seek alternative arrangements, if necessary.|
|Changes and cancellations to existing bookings||Review changes and cancellations provisions in booking conditions and pre-empt where and why changes or cancellations may be necessary. Note: where an organiser cannot provide holiday services due to a no-deal exit the organiser is required to give customers a refund. However, the organiser would not be liable for additional compensation as the circumstances causing the change are likely to amount to circumstances outside the organisers’ control.|
|Terms and conditions – new bookings for travel after 29 March 2019||Consider introducing a ‘Brexit clause’ into consumer contracts.|
Above all though, be prepared for increased consumer enquiries about the status of their travel arrangements which are due to take place after 29 March 2019. That will be so whether or not a deal has been agreed.