Language dynamics post-Brexit
One of the key questions in the field of translations was whether English remained the main official language in the post-Brexit context. Indeed, it remained the official language of the EU after Britain left EU, but the EU still has 23 other official and working languages, and speakers of English as a second language outnumber native English speakers by 2:1. Taking into account that France is a dominant country in the EU, the French language may become more widespread in the EU, as it is already heavily used in EU administration. The size of the French language industry for example is currently estimated to be worth between $650 and $950 million. For France, where foreign trade levels are similar to the UK’s, it falls to 0.1 per cent. In the past, commissioners, officials and spokespeople spoke French, however, this all changed once the Warsaw pact countries, including Bulgaria, Hungary and Poland, joined the European Union in 2004, and English became the main official language. Russian is extensively used in Eastern Europe as a lingua franca (along with German and Polish). French is used to trade with partners in areas of Africa, and Spanish is used similarly in Latin America. Experts mentioned that English might be used for initial market entry, but longer-term business partnerships depend upon relationship building and relationship-management and, to achieve this, cultural and linguistic knowledge of the target country are essential. Whilst English is the most commonly used foreign language, it is clear that many other languages are commonly used for business. For example, German is used to a large extent by Polish companies, while French and Spanish by Portuguese companies. With the exception of Spain and Portugal, we see a very strong positioning of German as a major second lingua franca of European business.
There are companies which have encountered language or cultural barriers and, as a result, lost business. More Spanish companies (19%) claim to have lost business than French (13%) or German (10%), while the percentage of companies facing language barriers varies between 21% (England and Wales) and 8% (Portugal). When companies were asked to identify the languages they used in their major export markets, it was apparent that there is widespread use of intermediary languages for third markets. For example, English is used to trade in over 20 different markets, including the four Anglophone countries, UK, USA, Canada and Ireland. German is used for exporting to 15 markets (including Germany and Austria), Russian is used to trade in the Baltic States, Poland and Bulgaria and French is used in 8 markets, including France, Belgium and Luxembourg).
It seems unlikely that English would lose its status in the EU, though attitudes and preferences will change over time. The level of multilingualism in Great Britain is quite low; only 38% of its citizens speak English as a second language, compared to 94% in the Netherlands and 91% in Sweden. Moreover, official EU policy has multilingualism at its core: it recommends that “every European citizen should master two other languages in addition to their mother tongue” – and this is an aspect that was quite neglected by the United Kingdom.
VAT practice for translators and interpreters
VAT practice for translators and interpreters who provide translation and interpreting services for B2C (to private customers) have changed, and when selling services to the EU, one is now liable to register for and pay VAT in the EU member state of the private customer and not in the UK as before. What does this mean for language service providers? Concerning B2B sales from the UK to the EU, if your business is VAT registered in the UK, B2B sales from a UK VAT-registered business to an EU VAT-registered business: Out of scope of UK VAT for the supplier (UK business); Reverse charge VAT for the VAT-registered buyer (EU business).
If your business is not registered for VAT purposes in the UK, B2B sales from a UK non-VAT-registered business to an EU VAT-registered business: no VAT implications for the supplier (UK business); no VAT charge from the VAT-registered buyer (EU business).
On the other hand, rules for Business-to-Consumer sales from a UK business supplier directly to an EU consumer have changed as translation and interpreting services now come under special rules for professional services treated as supplies.
According to the ‘Special Rule’, VAT must be charged in the country of the consumer. In order for the supplier (UK business) to get an EU VAT registration, it is likely to have to make a UK voluntary VAT registration.
Translations from an economic and business perspective
Another question is whether the use of translations could minimise the decline in exports post-Brexit. 56% of people spend more time on sites in their own language than in English, and translation has proven to be a revenue driver, which has a direct impact on the sales cycle of businesses. Translation might be an extremely important pillar that businesses need to take into account, to ensure that consumers still buy from them, even with additional taxes on top of the original cost. Obviously, translation poses an additional cost, but one that could pay off in the long-term, considering the impact that translation has on a user’s decision.
Geoffrey Bowden, general secretary for the Association of Translation Services stated that the UK language industry, like many other sectors, faces a prolonged period of uncertainty, the opportunities afforded to the sector by current exchange rates, in both supporting the growth of UK exporters and therefore expanding their international reach, being maximised by many Language Service Providers (LSPs). Their services are now looking very competitive for purchasers based outside the UK.
According to him, the most pressing issue for an industry, which relies on mother-tongue linguists, is the status of EU nationals living and working in the UK, some of them for many years. This uncertainty is causing great anxiety among the language community, who feels used for bargaining. On the other hand, many consider that Home Office will make the bureaucracy incredibly burdensome and exploit the opportunity to introduce exorbitant charges.
Accurate translations, in which all colloquialisms and cultural references are reflected, add great value to a business regardless of the size of an organisation. Every piece of research shows that by communicating effectively in the language of an export target market, companies can expand opportunities to build relationships and sell their products and services globally. However, exporters should take caution when using non-professionals to create their translations. In many situations, this can lead to comical outcomes. This may raise a smile, but a more likely outcome is damage to a company’s credibility and reputation.
Author: Dorina Tera – Senior Translator & Proofreader