Current business situation
The United Kingdom (UK) of Great Britain and Northern Ireland comprises England, Scotland and Wales (Great Britain) and Northern Ireland.
The UK voted to leave the European Union (EU) in 2016 and formally left the trading block on 31 January 2020. While it was in the EU, UK companies could buy and sell goods across EU borders without paying taxes or being subject to tariffs or quotas. EU citizens were also free to travel and work in the UK.
After intense negotiations, the UK–EU Trade and Cooperation Agreement (TCA) was agreed in December 2020. It provides for continued tariff-free, quota-free trade between the UK and the EU. It was provisionally applied from 1 January, 2021 entered into force on 1 May 2021.
Australia-United Kingdom Free Trade Agreement
Australia and the United Kingdom have signed the Australia–UK Free Trade Agreement. Entry into force is expected during the course of 2022. For more information see the Department of Foreign Affairs and Trade website.
Business culture: tips for new exporters
Doing business in the UK is very similar to doing business in Australia. However, business culture across the UK is more conservative than Australia, with executives preferring a more formal approach.
- Most business people wear suits. ‘Smart-casual’ is becoming more widespread in some industry sectors, though the description of 'lounge suit' on invitations typically means business attire.
- Many UK companies are entrepreneurial and interested in new ideas, but rarely agree to a ‘cold’ meeting. Expect to introduce your company and proposition at least three to four weeks before the planned meeting date.
- Make an introductory telephone call and follow-up with information by email. The British are punctual and value time-keeping for business arrangements.
- Gift giving is not a usual part of British business etiquette – and will in most instances generate a negative reaction. Some organisations are encouraged not to accept any form of gift. Some are prevented from doing so on legal grounds.
It is important to highlight that UK companies value long-term relationships with suppliers or business partners. It may therefore take longer to reach a deal in UK as compared to other countries.
Setting up in the UK
The Department for International Trade (DIT) has information for those considering setting up a business in the UK. You can also get specific help with setting up from:
Austrade UK can offer assistance with local service providers.
Banking and finance: the impact of Brexit
London is a major centre for international business and commerce. It is the leading international centre for:
- foreign exchange trading
- energy futures.
Prior to Brexit in 2020, the UK financial services sector benefitted from ‘passporting’. This enabled firms to sell their services into the EU from their UK base without the need for additional regulatory clearance.
Passporting is not included in the new UK-EU Trade and Cooperation Agreement (TCA). This means UK-based financial services firms must now either comply with the requirements of individual states to access the EU market, or rely on equivalence decisions.
Outside of the TCA there have been agreements that will allow certain financial services to continue as previously.
For example, the UK successfully applied to the European Payments Council (EPC) to remain part of the European Single-Euro Payments Area (SEPA). This means British businesses and individuals can make and receive Euro payments as if they were still in Europe.
Future uncertainties in UK–EU trade in services
Businesses have adjusted to the new normal but there are still opportunities to formally agree continued alignment and market access. The UK wants access to European markets and the Europeans require the liquidity generated by UK’s global financial services.
As the UK and EU continue to define their new trade relationship some uncertainty has been removed:
- The two markets have agreed to the free flow of data.
- Workers can operate in market for up to 90-days without the need for permanent residence.
Fintech and access to EU markets
Although further steps may be required to ease trade barriers, the UK remains a base from which business can drive expansion in the EU. There is no regulatory regime for fintech in the EU. Like the UK, fintechs are regulated depending on the activity they carry out.
Challenger banks, payment firms and alternative finance firms trading securities are regulated. Digital currencies are not. Privacy laws (see GDPR) wrap around all firms that are collecting personal data.
Opening a UK bank account
It should be noted that there are some complexities around opening a UK business bank account if you are from overseas. Banking service providers typically require a business to have a UK presence before opening a UK bank account. Digital service providers tend to adopt the same approach.
The challenges for companies operating in the payments sector can be greater. Different providers have different requirements and submitting a compliant application can be time consuming. Good advice can save months.
Some banks have worked with Austrade clients on a case-by-case basis and they may be able to quickly determine eligibility. Please contact an Austrade export advisor for further information or referrals.
Links and resources
Government, business and trade
Australian British Chamber of Commerce
British Chambers of Commerce
British High Commission Canberra
Confederation of British Industry
European Australia Business Council
HM Revenue and Customs
Intellectual Property Office
Invest Northern Ireland
London & Partners
London Chamber of Commerce
National Statistics Online
Scottish Development International
UK Department for Business, Innovation and Skills
UK Export Finance
News and Media
Belfast Telegraph (Northern Ireland)
Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.