BREXIT: How to get full compensation for the costs incurred by your business

The Italian Agenzia per la coesione territoriale has published a public notice for the selection and support of business initiatives to counteract the negative impacts of Brexit.

The total allocated resources are € 112 millions.

Who can ask for the compensation?

Entitled to the reimbursement are any private undertakings registered in the Registro delle Imprese who has been damaged by the UK’s farewell to the EU. The extent of the damage suffered should be of at least EUR 10.000,00 (VAT excluded) and should be occurred from January 1, 2020, to the date of the financing proposal.

Proposals will be possible from 12:00 am of April 13, 2023, to 12:00 am of July 12, 2023.

What may you include in the financing proposal?

Financing proposal should contain reference to any activity that has a direct link to the aim of countering Brexit’s negative effects. Damages suffered should be highlighted and estimated in economic term considering that the minimum amount should be no less than EUR 10.000, as previously mentioned.

Expenses that can be taken into considerations are listed by the public notice as: personnel costs and travel expenses (e.g.,  plane or train tickets), accommodation costs, including travel insurance, food, accommodation, visas; costs of external consultancy and services such as studies, training, IT systems, creation, modification and updating of websites, advertising or information activities related to the initiative, other consultancy and specific services needed and technical verifications. Expenditure on infrastructure and equipment related to the implementation of the grant proposal (e.g., hardware and software, tools and machinery, tools, and devices) is also eligible, as well as general, office and administrative expenses such as rents, utilities, office supplies, maintenance, cleaning, calculated on a flat-rate basis up to 7% of the eligible direct costs.

The financing proposal cannot be modified or changed once submitted.

Amount of the Contribution

It is a non-repayable refund under the de minimis regime. This regime provides that companies can be granted only small amounts of aid, in order to not infringe competition rules. The maximum total amount of such aid obtained by a company may not exceed EUR 200,000 over a three-year period.

Since a full reimbursement is granted, no other public aid can be cumulated for the same expenses included in the financing proposal.

The total amount of allocated resources is EUR 112 million, if more resources will be funded the Agency will give notice promptly. For the time being, financial aid will be granted until funds are exhausted and in order of application received.

In any case, the agency retains the right to carry out all necessary checks to verify the legitimacy of the expenses indicated in the application.

Briefly: what’s Brexit impact three years later?

As we know Brexit was finally effective on January 31, 2020, after four years of negotiations.

As per trade volumes, initially, there was a drop in UK exports to the EU. Once the early problems were solved, trade returned to pre-pandemic levels, but it could be argued that it could have grown more if there had been no Brexit. That’s because in a recent survey of 500 companies conducted by the British Chambers of Commerce, more than half said they were still struggling with the new system. It could be the case that bureaucracy may have discouraged some small exporters altogether, exporters that could have been trading freely if the UK was still part of the EU, at least for what some official surveys stated. Similar situation is reported for imports: even though volumes have recovered, many goods, food specifically, have seen a sharp rise of their prices, and that even before the jumping inflation.

Talking about investments, their amount has been stalling since the referendum. It is argued that, even though the UK’s situation wasn’t great even before 2016, if that trend had continued the total amount of investments would have been at least 25% higher.

The Economist has studied the impact of Brexit on Great Britain’s economy. In its inquiry it is shown that Brexit has surely hurt the UK, in fact it is shown in a graph that if the Kingdom had not left the EU, it’s GDP would have been about £ 50bn higher that it is now. Moreover, total trade in goods and gross fixed capital formation would have been higher than what they are currently.

Brexit also impacted the job market, having the UK lost about 330,000 workers with transport, hospitality, and retail sectors among the most hit. That’s because of the end of the free movement of labour and the introduction to stricter immigration policies.

A survey by the OECD has stated that, as a result to above mentioned state of affairs, Britain is the only G7 Country that has seen a negative economic growth in the last three years, resulting in smaller economy than that prior to the pandemic (in the same time period considered, the US has grown more than 4%, Canada about 3%, Italy just less than 2% , France slightly more than 1%, Japan around 1% and Germany totalled an increase around 0.3%).

Even though the long-term effects on UK’s economy are hardly forecastable, in the short-medium time it is clear that Britain will face a pivotal challenge in order to retain its economic and political role in an increasingly competitive global world.