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What small practices should do to prepare for Brexit

Find out how as a small practice you can prepare during the transition period following Brexit. Here's an overview of instructions and guidance on audit, trade, employment, data protection, and professional qualifications.

While there remains a good deal of uncertainty about what to expect after the transition period ends on 31 December 2020, there are actions that practices should be considering now. The UK government, the European Commission, the FRC and a range of other bodies have been issuing instructions for actions they expect businesses to take.

ICAEW has been providing guidance for members at icaew.com/Brexit since the referendum and has been following developments as they happen. This page provides a clear route to find the guidance you need.


There are a range of implications from Brexit that auditors should be aware of. In particular, you should consider the issues below.

Legal and regulatory implications

In addition to the practical considerations above, which are relevant for any audit, there are also some specific legal implications. The FRC has provided detailed guidance on the legal implications of EU exit. For firms and individuals providing statutory audit services outside of their home country, there might be a need to register in those EU countries where they work if there is no deal. A major group affected are UK auditors of UK companies with listings on the Irish stock exchange, who will need to register with the Irish regulator as third-country auditors.

ICAEW has issued draft audit regulations, reflecting changes that would apply in the event of a ‘no deal’ Brexit. The regulations apply to those working in the regulated area of audit in the UK, Ireland and the Crown Dependencies.

There are also changes to auditor independence provisions resulting from UK legislation which will be implemented immediately at the time the UK leaves the European Union, in the event of a no-deal Brexit. The changes impact only upon audits of Public Interest Entities (PIEs) but would apply without any transitional arrangements. The principal issue needing immediate attention is that the prohibitions on the provision of certain non-audit services in paragraph 5.167R of the ethical standard will apply to all components of a group audit regardless of where in the world those components are located, where the audit of those components is undertaken by a member firm of the auditor’s network.


UK companies preparing accounts for 2019 and 2020 will need to consider how Brexit will affect the numbers and the disclosures required. Our guide provides further information on how to prepare FRS 102 accounts for 2019/2020:

There are also legal implications for some UK accounts, relating in particular to exemptions currently available to pan-EU groups. Further details about the changes to UK company law can be found on the FRC’s pages:

Trading with the EU

Many practices will have clients that trade between the UK and the EU-27 or the rest of the world. HMRC has issued guidance on how the UK border will operate from 1 January 2021. HMRC estimates that there are 240,000 UK businesses that trade only with the EU, they would will now all need to comply with customs formalities, unless they trade only between Northern Ireland and Ireland in the event of no deal.

After the end of the transitional period on 31 December 2020, businesses will need to complete customs declarations for goods crossing the UK border –although simplified arrangements will apply for the first six months, which can enable businesses to defer making declarations. HMRC advises that customs documentation is complex and that most businesses use an agent to complete this for them. However, for those wishing to do it themselves funding to help with training for completing the customs declaration forms has been made available by HMRC.

Further details on customs procedures are set out in the customs section of our Brexit checklist

A range of government guidance has been provided by both the UK government and the European Commission for entities that trade between the UK and the EU-27. In particular you might find useful:

Businesses can sign up to further Brexit notifications from HMRC.


Existing employees of UK companies who are EU nationals will need to apply for settled status. It is important to plan for cut-off dates and any differential status that might apply to new arrivals to the UK. Practices themselves may have employees who will need to register and this will also be an issue for many clients.

Data protection

If the UK leaves the EU without an adequacy agreement on data protection, it will become a third country. This means UK organisations and individuals that process or transfer the personal data of EU-27 citizens from the EU to the UK may need to take action to continue the free flow of data from the EU to the UK and guarantee the protection of EU data subjects. The action required will vary according to whether there is a deal (as set out in any withdrawal agreement) or no deal.

If there is a "no deal" Brexit After the transitional period ends on 31 December 2020 the EU GDPR will no longer be law in the UK. However, as the UK government intends to write the GDPR into UK law, from all practical perspectives, GDPR will continue to apply.

After transition Brexit, the UK will be a "third country" until the EU makes an adequacy decision regarding the UK. Until then, the transfer of personal data from the EEA to the UK will only be allowed if ‘appropriate safeguards’ are in place. Such safeguards include Standard Contractual Clauses (SCCs). SCCs must be inserted into contracts (whether controller to controller or controller to processor) before Brexit, and their wording must follow that approved by the European Commission.

Transfers of personal data to the EU/ EEA from the UK will not be affected and transfers to and from countries outside of the EU/EEA will be subject to the same rules as now.

Professional qualifications

Recognition of professional qualifications is directly relevant for members who have or wish to move and work across borders in regulated and reserved professional activities. Only statutory audit is regulated in all EU member states and there are considerable variations in national rules on what is and what is not regulated in the accountancy sphere.

For most ICAEW members, therefore, the Brexit implications on professional recognition are not directly relevant. ICAEW members working in the EU-27 are advised to read our guide: