What You Need to Know to Prepare your Business for Brexit
Maria Peloponisiou~ 5 min Reading time | 20. Sep 2019
The UK is planning to leave the European Union at the end of October this year. However, it is not yet clear as to what Brexit’s impact on businesses will be. We’ve taken a look at a few challenges that every business could face and we’ve found a few that will need to be dealt with very quickly!
Preparing for Brexit
According to YouGov, only one-third of businesses have begun to prepare for Brexit. One of the first things you need to do to prepare your business for Brexit is to ensure you set aside enough time.
As part of your preparations, you might want to ask your suppliers if they can still guarantee that they can fulfil your orders after the UK leaves the EU. Make sure you know what you rely on your current supplier for. You’ll also want to consider what they rely on you for and how both of these factors could affect you.
Dealing with Brexit’s Impact
One thing that any business must do is deal with Brexit’s impact. Firstly, you will need to understand how Brexit will impact your business. You’ll also need to identify the areas that need further analysis. Also, make sure you prioritise certain activities to help you prepare for any changes.
It could be a mistake for you to wait much longer just to see what might happen. The following advice can help whether Brexit goes ahead as planned or changes are made to the agreement.
Identify who will deal with any issues surrounding Brexit. Each team or individual will need to know what the deadlines for the completion of the issues are. They will also need to be aware of any extra funding.
Priority will need to be given to the actions that are vital to your business. This is so that it can continue to operate irrespective of what happens after Brexit or some changes could affect the supply chain.
Dealing with an Increase in Business Admin
Brexit will likely bring with it an increase in administration for businesses everywhere. This is especially the case when new legal structures have been put in place.
Currently, trading with the European Union is fairly easy but when the UK leaves the EU things could change. It’s hard to imagine that things will never change. In addition to an increase in business admin, safety standards and data protection are also likely to change.
Updating the IT Systems
Every business will need to make sure that their IT systems are up to date. Accounting software currently anticipates that the VAT used with EU countries could change.
Some cloud software updates continuously which ensures users have the latest version. This means you won’t need to ensure you have the latest update. Some businesses might need to purchase new systems and software. There might even be new compliance requirements. These are likely to affect the financial and manufacturing services.
Managing your Time
Understandably, Brexit is going to place a lot of demands on your whole team. This is why you will need to manage your time well. The great news is that many businesses can improve upon and learn more skills.
While it might be hard to estimate how much time it will take to prepare, you might want to set aside time each day to work on Brexit tasks.
The Impact on Imports and Exports
Indirect taxes and customs taxes such as VAT on imports and exports are very likely to change. This is regardless of whether there is a withdrawal period or there’s a no-deal Brexit. Each of these circumstances will affect both services and products that are sold by businesses in the EU.
The good news is that the British Government has published an article that helps you to prepare for Brexit in case there is a no-deal.
A Change in Safety Standards
It’s very likely that after Brexit the UK and the EU will have different safety standards as well as environmental protection requirements.
UK businesses that trade within the EU will have to ensure they are complying with the UK’s bodies and EU’s bodies that oversee the industry. They might also need to show additional UK compliance on their products.
The UK has already implemented the GDPR and there’s a chance that businesses in the UK are already compliant with when the EU needs. However, there is a chance that the UK’s ability to share data with countries in the EU will be impacted. There is also a chance that the EU and the UK will need to enter a new legal agreement.
Finance and Payments
There is a lot of potential for an impact on businesses access to capital. There could be cash flow issues and volatility as far as the exchange rate is concerned. There might even be reduced confidence from consumers and investors.
There are already skill shortages in addition to reduced access to finances. In the last few years, there was a 15% increase in scale-ups in the UK. The free movement of labour, as well as talent across the EU, was limited in the UK.
What’s more, is while the European Regional Development Fund has been available to UK businesses, it has dried up. There will now be a wait before funding is distributed if it is accessible.
Businesses can only wait and see what will happen. However, the sooner that changes are made, the better. The more work that is done to prepare for Brexit, the less likely your business is to become overwhelmed.
Consider preparing for Brexit now and ensure you set aside enough time each week. Also, make sure that you’re prepared for the changes in imports and exports. The more you prepare now, the less you will have to deal with when and if the time comes.