The government’s defeat in the ’meaningful vote’ on the proposed Brexit deal could be seen as a further step in the direction of a ‘no deal’ Brexit and increases the urgency for businesses to be reviewing the potential impact on their organisation and, where possible, taking contingency steps.
In our webinar at the end of 2018, “Brexit – where are we now?”, we asked delegates from more than 130 UK-based businesses a range of questions on their Brexit preparations and we found that more than 80% had taken no active steps to prepare. The organisations ranged in size from FTSE 100 to small and medium enterprises (SMEs), representing a widecross-section of the business community.
The results from the webinar found that only 4% of businesses had implemented any practical changes ahead of Brexit, with the vast majority adopting a ‘wait and see’ approach. In the last few weeks more businesses have started to take action, but for those that have not yet done so, our recommendation is for them to map their existing legal and physical supply chains to help understand the potential impact of the UK leaving the EU. This exercise should cover both inbound and outbound transactions, give consideration to both tangible and intangible aspects and the organisation’s labour requirements.
To help businesses, we have listed a number of practical ’no remorse’ actions that could be taken while the details of Brexit are resolved.
During the webinar, businesses were also asked what they considered to be their biggest Brexit concern. Regulatory change and the availability of staff following the UK’s departure were the biggest worries for businesses (22% each), while time delays at the border for the movement of goods (21%) and general systems and process changes (16%) were also prominent.
The webinar covered a number of Brexit-related issues associated with contingency planning. This included aspects of international trade, immigration and workforce planning, corporate location strategy and the business environment in the future. Delegates heard from speakers Robert Marchant, VAT Partner; Laurence Field, Corporate Tax Partner; Dinesh Jangra, Head of Global Mobility (all at Crowe) and Rahul Batra, Partner at Hudson McKenzie.
Our next Brexit webinar will provide additional updates on these topics and be held late February/early March.
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Robert Marchant, VAT Partner, said:
There are steps businesses can be taking to help transition to whatever new trading arrangements the UK has with the EU and rest of the world. We have highlighted a number of ‘no remorse’ actions that organisations can be proactively taking now. In addition, the government has issued guidance to help with ‘no deal’ planning, so organisations can review the impact of this on their arrangements immediately. The time to act is fast approaching as there are now only around 70 days to go until the UK formally leaves the European Union.”
Laurence Field, Corporate Tax Partner said:
While concerns about the final shape of Brexit dominate the thinking of many businesses, they should not lose sight that other tax reforms driven from the US, UK, EU and OECD could have a significant impact on international business. With many countries now doing their own thing with limited regard for international agreements, Brexit is only one element of the challenges facing businesses looking to operate across borders.”
Dinesh Jangra, Global Mobility Partner said:
“From a people and employer perspective, immigration remains the big issue. Government white papers and policy statements are making things a little clearer in this space but there remains a void of practical detail. Front of mind must remain workforce planning and the changing compliance obligations resulting from new work arrangements – commuters, business travellers, cross-border roles and assignments as business prepares for the post Brexit world.”