The essential actions that businesses can take to prepare for Brexit

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.

• Incorporate EU company and assess impact on corporate group and infrastructure needs.
• Review response to potential regulatory changes.
• Open overseas bank account.
• Apply for Authorised Economic Operator (AEO)/ ’trusted trader’ status.
• Consider use of Customs warehouses.
• Set up a duty deferment scheme.
• Increase inventory held in key EU locations.
• Review the workforce requirements to support your business plan.
• Consider support to EU nationals in your workforce.
• Review whether withholding taxes could be an issue post Brexit and consider scope to pre-pay.

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.