How will Brexit affect your Business?

Brexit will impact all of us – but if you run a business, the effects might be dramatic. They could, of course, be positive, with reduced red tape and new customers in new overseas territories.

But they could also have a negative impact if it cuts you off from suppliers and customers you have grown to depend on.

Making the right preparations now could make all the difference to how you do business after March 29th. It could be time to look at what Brexit means for your future.

What exactly is Brexit?

Britain is currently a member of the EU’s single market and customs union, which lets its 28 member states function as a single trading area with no tariffs or border checks, and with a combined VAT system.

The UK electorate voted to leave the EU in June 2016. Since then the UK and EU governments have been negotiating on how the movement of goods, services, people and capital across the UK/EU borders will be processed following Brexit. There are two likely Brexit outcomes:

●      Soft Brexit –  the movement of goods, services, people and capital will continue between the UK and EU following Brexit.

●      Hard Brexit  – there will be no agreement and the UK will trade with the rest of the world more freely than it does now – but tariffs and customs will be applied to trade with the members of the EU.

What will Brexit mean for your business?

It’s easy to think that if you are not an exporter Brexit may not have a big effect on your business – but the fact is every business in the UK will be impacted. Some of the forms this impact will take may be subtle.

Import and export of goods and services

You may not be an importer or exporter, but you may depend on supplies sourced from the EU. For example, a garage may need replacement parts which are sourced from an EU manufacturer. You may be able to import these items, but VAT payments and (potentially) customs and excise duties may apply and there may be delays as well as extra costs.

What should you do?

Make sure you know where your key supplies originate – and, if possible, find suppliers outside the EU. Alternatively, you may need to stockpile key supplies.

Employing EU citizens

Your business might depend on EU citizens in your workforce. Recent research carried out by YouGov reported that nearly half of all UK businesses employ EU citizens. These may be front-line staff and key people – but support roles, such as office maintenance or cleaning are still crucial to your smooth operation.

What should you do?

It is likely that EU citizens will be given leave to remain after Brexit. Settled or pre-settled status will give them the right to continue to work in the UK, and they can continue to pay tax and National Insurance like any other employee. The government will probably make background checks based on existing tax and NI payments.

Recruiting EU citizens who don’t already live in the UK following Brexit is likely to be more difficult, while many already here may prefer to return home. You may need to bring in new people or look at agency staff. This may have an impact on your costs.

Copyright, trademarks and patents.

The position on IP – intellectual property –  is complicated, and you may have a trademark to protect outside the UK.

What should you do?

If you’ve used an EU Trade Mark (EUTM) then you might need to re-register it with the UK authorities.

Data protection

The UK government has adopted the European GDPR into UK law under the Data Protection Act 2018. This means that when the UK leaves the EU, the same data protection requirements will continue to apply.

The UK expects to become a “favoured nation” for the EU which will allow the free transfer of data without the need to implement additional safeguards.

What should you do?

How your business handles personal data won’t change if you have properly implemented GDPR standards.

However, in the case of a Hard Brexit, it could become necessary to host data in the UK, rather than with an EU-based service. You may need to look at your data provisions to avoid issues.

Import/export and logistics

If your business imports or exports goods to or from the EU, or if your suppliers store goods in an EU warehouse or distribution centre, you should expect disruptions and extra cost. There may be similar bottlenecks if your products are handled by an EU-based distributor.

What should you do?

Avoiding an EU bottleneck may be simpler if you import directly from manufacturers based in places such as Korea and China. You may want to look at your international transport chain.

Your Finances Post-Brexit

Does your business hold money in EU financial institutions, or rely on funding or grants that come from the EU? Remember, some funding that appears to come from the UK government is actually backed by the EU. This could no longer be available after Brexit.

What should you do?

You may need to make alternative financial arrangements – or find alternative sources of grant funding.

Are you prepared for extra demand?

UK manufacturers serving UK businesses could look forward to greater demand because of the potential for difficulties and delays with imports from the EU.

What should you do?

Stockpiling and preparing to increase production might both be necessary to cope with increased demand.

Business funding experts Rangewell have some revealing facts about international business, and have reported an increase in enquiries from businesses concerned about the impact of Brexit.

They suggest that you conduct a Brexit impact assessment to see how Brexit will impact your operations and put financial contingency plans in place to provide solutions.

On a positive note, they also recommend looking at for funding new international business opportunities. Remember, although there may be some short-term issues to deal with, Brexit should make it easier to do business with the rest of the world.