Introduction
During one of the most notorious referenda in history, the British people voted to leave the European Union on June 23rd, 2016. During its lengthy (and unfinished) unravelling, Brexit’s impact on the trade between Flanders and the UK is staggering: Flemish export to the UK dropped from nearly 28 billion euros in 2016 to 24 billion euros in 2021. Despite this clear decrease, the UK is still Flanders’s fourth most important export partner, accounting for about 6.25% of the total Flemish export value. Consequently, current British trade policies as well as potential changes in the near future could still heavily impact the Flemish economy in the years to come. In order to reduce this negative impact, Europe and Flanders have created a number of subsidy instruments to support companies in their Brexit mitigation strategy. Following the recent start of the Brexit Adjustment Reserve, (almost) all Flemish companies who experienced a direct negative impact of Brexit on their business can now rely on government support. In this article, we present an overview of the three main Brexit support measures in Flanders.
Brexit Adjustment Reserve (BAR)
Although chronologically the last measure to come into effect, the Brexit Adjustment Reserve (BAR) is the broadest of all measures to support companies in adjusting their strategy and business model in the wake of Brexit. Both large companies and SMEs (except those active in the financial sector) can benefit from this aid. Non-profit organisations, sector federations and governmental entities are equally eligible. The most important requirements are proof of an established trade relation with the UK prior to Brexit and an accurate quantification of the negative impact of Brexit on company revenue and/or costs. The latter can in some cases be difficult in a time also marked by COVID19 and the war in Ukraine.
The goal of the BAR is to reduce the negative impact of Brexit on Flemish companies by providing financial support for temporary costs to be done to maintain the pre-existing trade relationship with the UK. Examples of those fundable activities are: measures to counter longer transit times and/or travel restrictions, efforts to meet new certification requirements or hiring personnel to deal with new customs formalities. These costs should be incurred between January 1st, 2020 and December 31st, 2023. The total amount of BAR support amounts to 80-100 % of acceptable costs. Interested companies have until July 1st, 2023 to submit their application to VLAIO.
Do you have a concrete project idea or would you like to know more about the BAR? Feel free to contact one of our experts at EY Subsidia through info.subsidia@be.ey.com.