Organisations should already be aware that if the UK leaves the European Union (EU) without a deal, there will be no transition to new trading arrangements and therefore overnight UK organisations will be required to apply the same processes to EU trade that currently apply when trading with the rest of the world.
For some this could lead to significant changes. However, before considering specific details there are some straightforward things that organisations can do immediately. Firstly, it is important to reassure your customers, suppliers and workforce. The message has to be that business will carry on, there may be some changes, perhaps some delays but all organisations will be working as much as possible to ensure that their activities continue as intended.
To help organisations, we have listed a number of practical ’no remorse’ actions that could be taken, or at least started.
In developing a plan, an initial key step that many will already have completed is to assess the parts of an organisation’s activities which may be impacted by Brexit. This will be the foundation of contingency planning. From an international trade perspective, it can be difficult to understand all the types of purchases and sales an organisation makes and the physical and legal flows, but these will all need reviewing to pinpoint the areas that could be impacted. Organisations should also consider carrying out workforce planning to understand existing and future employee needs to assess the impact of changes to the freedom of movement/ immigration rules.
Many areas of the UK’s tax rules are influenced or directly impacted by EU laws, so all the different tax aspects will need to be reviewed and actions taken as appropriate if the EU rules become inapplicable in the UK. In previous updates we have set-out more specific details, for example, of the range of EU VAT rules and reliefs which that UK organisations may no longer have the ability to apply. HMRC has also issued a number of no-deal guidance notes which will all need to be considered.
Parliament will now vote on the possibility of preventing a no-deal or seeking a delay to the UK’s departure date from the EU. But it is worth remembering that an extension to the Brexit negotiations requires all of the EU 27 Member States to agree to the extension.