Is your business prepared for Brexit? Allie Renison, of the Institute of Directors shares a checklist of basic steps for UK businesses to take now in order to help mitigate their exposure.
Scenario planning is particularly difficult given the Prime Minister’s stated intent to pursue a bespoke free trade agreement with the EU, with respect to both content and timescales, as well as the lack of clarity about whether both sides are even contemplating a transitional bridging arrangement yet. However, there are some basic steps which companies across many different sectors should be taking now to help assess their Brexit exposure and insulate themselves from it.
For those businesses engaged in the EU goods trade, it is essential to begin exploring what extra paperwork dealing with the EU as a third country would entail.
Planning for a worst case scenario is necessary, therefore exploratory discussions with freight forwarders, customs brokers and other firms who already sell and buy products on WTO/MFN terms (generally and with the EU) to assess the full range of potential cost implications should be part of forward planning. VAT considerations in this regard are extremely important.
Inward and outward processing relief, duty drawback and temporary warehousing are procedures which will become important for those firms selling or importing from the EU.
Businesses already trading with non-EU markets will have an advantage in knowing how to use these kinds of procedures to mitigate any increase in costs or delays.
Unless the UK and EU agree to continue using Intrastat declarations and EU sales list forms for goods trade, these will be replaced with import/export documents.
Familiarise yourselves with these either directly or through the third parties mentioned above (along with indirect tax/duty specialists).
There is a strong incentive for UK-based goods traders who have not yet done so to apply now for “Authorised Economic Operator” (AEO) status under HMRC’s ongoing roll-out of the EU’s new Union Customs Code (UCC).
Start having talks – informally as a precursor – with existing clients, suppliers, customers etc to assess what is needed from both ends to ensure your trading relationships can carry on as before.
This means reviewing all EU-related components of your existing operations, and ensuring you know where your company fits into any supply chain(s).
Examine the rules and requirements in each EU and/or EEA country to see which framework provides for the most efficient, cost-effective route to setting up operations if you are in a sector that is likely to need regulatory/licensing approval.
Review all your existing workforce to determine who is an EU national and what their potential status might be with respect to residency requirements (post-Brexit).
The Home Office has different definitions depending on wage level and other criteria of who would be allowed to qualify to settle in the UK.
Brexit-proof your existing and/or future contracts.
Pricing mechanisms or anything which might be predicated on unimpeded access of goods/services/capital/people between the UK and EU may need to be revised.
Ensure you are fully compliant with EU legislation (particularly regulations which are directly applicable as opposed to directives) such as the General Data Protection Regulation due to come into effect in May 2018 and all employment laws including recent changes to holiday pay calculation.
It is an unsafe bet to pre-emptively assume the UK government will renege on its existing or upcoming EU legislative commitment as a result of Brexit.
Engage with the IoD and sector-specific trade associations even on the most detailed and business-specific concerns.
The more case studies we and the government have, the better informed our approach to negotiations will be. Linking up trade policy with practical, real-world considerations is essential in formulating negotiating objectives.
This article is part of our spring edition of Global Ambitions magazine. Discover the full magazine here.
It’s worth pointing out that the views expressed in Global Ambitions are those of the individual authors, and not those of World First.