And how Brexit will affect UK businesses..
2020 has been an incredibly difficult year for all of us and, with the Coronavirus pandemic taking over the world, we somewhat deviated from talks about Brexit. However, the year is coming to an end, meaning that the UK will be officially leaving European Union (EU) on the 31st of December.
As a nation, we’ve been discussing the potential impact of Brexit on businesses for the past few years and now that it’s so close, businesses need to be prepared for the changes that it will bring.
As the situation currently stands, we can only question how Brexit will affect the UK and international trade. However, with the looming deadline, the likelihood of a “no-deal Brexit” is becoming increasingly higher. This means that the UK will not have a trade deal with the EU and the way we do business with Europe will significantly change.
The importance of planning and contingencies
No one knows what the next few months will bring and whether the UK and the EU will manage to agree on a meaningful deal. In the case of no deal, the government still has to agree on what exactly the trading will look like post-Brexit. As of yet, businesses are left in the dark and the lack of clarity is bringing a lot of uncertainty for hundreds of companies across the UK (especially those trading with other European nations).
That is why planning NOW is essential. Whatever the outcome of the situation will be, your business needs to be prepared. It’s quite likely that decisions will be made very last-minute, so waiting for them is not an option.
What areas will be affected?
A no-deal Brexit would affect pretty much everything to do with trading, travelling and living in the European Union. Here are the key areas to keep in mind:
- Importing goods into the UK – If you’re importing goods or services from any of the EU countries into the UK, this process will look very different post-Brexit. With no trade agreement in place, we’ll see changes in how value added tax (VAT), customs and excise duties work. You may also be required to have additional licenses to be allowed to import goods and there may be extra costs. Overall, the process of importing will become more complex, costly and time-consuming.
- Exporting goods from the UK – Likewise, exporting goods and services from the UK to any of the EU countries will change. A no deal Brexit will impact the rules for customs and excise, where and how you collect and pay your VAT as well as the general logistics of transporting your products overseas (even if you’re exporting to as close as Northern Ireland).
- Travelling to the EU – If you’re someone that regularly travels to European countries for business purposes (or just holidays), this will also soon become more difficult. The current freedom of travelling in and out of European countries will be reduced post-Brexit and you will have to consider such things as visas, insurances, overseas healthcare and always checking your passport details prior to travelling.
- Living and working in the EU – The UK citizens that are currently living and working in an EU member state will have to make sure that they have all the necessary paperwork or work visas filed on-time, to continue residing and working in that country with no issues.
- Living in the UK as an EU citizen – If you are an EU citizen currently residing and working in the UK, you will also need to check what work visas, paperwork or permits are needed for you to continue making a living in the UK.
In addition to these, there are also other things to consider that may affect you post-Brexit. For instance, if you’re currently receiving any EU funding or subsidies, these may be lost. Or if you own any EU licenses, copyrights and patents, you may need to change these together with the new logistics of your business sending and receiving goods to and from the EU.
If you currently own an EU specific domain for your business (ending with .eu), you will also be required to change it. This requirement will only exclude businesses that have been established in an EU member state and have office facilities there.
Talk to us about preparing for Brexit
It is extremely important that your business is prepared for a no-deal Brexit and the necessary decisions are made in advance, so that the new post-Brexit trading laws affect you as minimally as possible.
We can help you kick start your preparations by taking a proactive approach and planning for every scenario. Our Virtual Finance Director will review your numbers and current trading relationships and run through the different outcomes as well as examine the potential changes in your VAT, customs and excise, import and export duties, etc.
Get in touch with us now and we’ll ensure that you meet the 1st of January with confidence.
If you’d like to discuss your options, get in touch with us by calling on 01202 755600 or email to hello@asfb.co.uk.