What does a post-Brexit world look like for UK businesses?
It’s been a dramatic week, with Theresa May’s deal being voted down in parliament, followed in quick succession by her tenuous survival of a no confidence vote by 325 votes to 306.
In all of this uncertainty, it is far from surprising that UK businesses are struggling to figure out what they can do next.
As MHA MacIntyre Hudson did on Wednesday 16 January, Crowe UK also urged businesses to “take contingency steps for a ‘no deal’ Brexit.” They have stated that businesses need to be reviewing the potential impacts Brexit will have on their organisations, thus aiding in the process of mapping out their contingency plan going forward in this tumultuous time.
“There are steps business can be taking to help transition to whatever new trading arrangements the UK has with the EU and the rest of world,” said Robert Marchant, VAT partner at Crowe UK, yesterday. “In addition, the government has issues 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 until the UK formally leaves the European Union.”
Although the debate is still ongoing, Crowe UK has highlighted steps that can be taken now, regardless of outcome:
- Making sure to incorporate EU companies and to assess the impact this will have on a business’s corporate group and infrastructure needs
- Businesses can review their responses to potential regulatory changes
- Open overseas bank accounts
- As well as opening overseas bank accounts, businesses can apply for Authorised Economic Operator (AEO) or ‘trusted trader’ status
- It is certainly worth businesses considering the use of customs warehouses in the future
- Furthermore, they could set up a duty deferment scheme
- One Crowe UK’s most important recommendations is to increase inventory held in key EU locations
- Businesses should review their workforce requirements in order to effectively support their adapted business plans
- They should support the EU nationals within their workforce. For example, making sure that these individuals are aware of how the company will support them through various changes that could be implemented
- Businesses need to review whether withholding taxes could be an issue post-Brexit and consider the scope to pre-paying
As well as these helpful guidelines for UK businesses, Crowe UK has conducted research that looks into how economic and political uncertainty has been influencing businesses. The study consisted of 130 UK-based businesses “ranging from FTSE 100 to SMEs” during their webinar – Brexit—where are we now? – Crowe UK has reported.
They concluded that 80% of these businesses have taken “no active steps for Brexit, preferring a ‘wait and see’ approach.”
Laurence Field, corporate tax partner at Crowe UK, said: “While concerns about the final shape of Brexit dominate the thinking of many businesses, they should not lose sight of the fact 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.”
Statistics that Crowe UK’s study revealed included the fact that 22% of these businesses were worried about Brexit causing regulatory changes or it impacting on the availability of staff from the UK’s departure from the EU. 21% of businesses revealed that they were worried about time delays at the border for the movement of goods. Finally, 16% said that they were concerned about the general system and process changes that would be introduced for a “post-Brexit world”.
Dinesh Jangra, global mobility partner at Crowe UK, concluded: “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. Workforce planning and the changing compliance obligations resulting from new work arrangements must remain front of mind—commuters, business travelers, cross-border roles, and assignments as business prepares for the post-Brexit world.”