At the time of writing, recent political developments may now mean that there is a greater likelihood of the UK leaving the EU without ‘a deal’. As things stand, the UK will leave the EU on 31 October 2019 unless an agreement is reached or an extension granted. Many organisations had carried out reviews during the first few months of 2019 of the potential impact of a ‘no deal’ Brexit on their organisation and now is the time to refresh this exercise. So what can businesses do to prepare for a ‘no deal’?
In many ways their planning should be no different to other business decisions; it is essentially about managing risk and every owner of a business should be planning for the unknown. Brexit, and whatever form it takes, is certainly full of unknowns, but that is no reason why owners can’t take steps to reduce the risk. This should be done with offsetting the biggest potential benefits for the lowest possible cost.
Like in any time of uncertainty, there are some straightforward things that business owners can do immediately. Firstly, it is important to reassure your customers, suppliers and workforce. Business will carry on, there may be some changes, perhaps some delays but all companies will be working as much as possible to ensure their business runs as normal.
Crowe has developed a 10 point ‘no remorse’ action plan that businesses of all sizes can consider. In developing this plan we have spoken with businesses and reviewed the key questions and risks that are concerning them. These are:
A key first step is to assess the parts of your business’ activities which may be impacted by Brexit, as this will be the foundation of your contingency planning. From an international trade perspective, it can be difficult to understand all the types of purchases and sales a business makes and the physical and legal flows, but these will all need reviewing to pinpoint the areas that could be impacted. For businesses who primarily trade in goods, the possible creation of a customs border between the UK and elsewhere will result in a change to the import/export process and possibly an increase in customs duty and VAT costs.
For services businesses the issues are likely to be more about the regulatory position and access to the right labour.
Businesses should consider carrying out workforce planning to understand existing and future employee needs to assess the impact of changes to the freedom of movement. Those considering corporate relocations should understand the tax implications for both the organisation and its employees for all of the candidate locations being considered.
To help make the right decisions at each step of the above and beyond, it is also worth seeking specialist advice to look at your business operations more generally. Specialist advisors are adept in spotting and addressing issues that you may have overlooked, or not had the chance to think about.
This article first appeared in Business & Innovation magazine in June 2019.
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