Beyond Brexit: A time to actJun 30, 2018
I RECENTLY hosted an event with the Milton Keynes business community on the potential impact of Brexit on their businesses.
This session was developed in part, to address the unease that many businesses face given the myriad of conflicting political and media commentary on the perceived impact of leaving the EU.
A further goal was to persuade those businesses, that there are strategies they can employ and that many of the potential risks can be mitigated by taking action now.
The feedback from the session was that businesses expected the government to come up with clear answers before they would act. A commonly held opinion was that there is no point in planning or taking action now as there are just too many unknowns – indeed some expressed a sense that Brexit may not even happen.
At this time, what’s significant is that there has been progress and that negotiations continue between the UK and the EU in preparation for an orderly withdrawal, with three different channels to those negotiations:
- Getting the exit terms agreed – the key issues are: the financial settlement in respect of the UK’s exiting the EU, the future status of EU citizens living in the UK and vice-versa, and, of course, delivering a ‘seamless’ border island of Ireland;
- Agreement on the details of transition – how long we’ll get to adapt from today’s set of arrangements to what will happen in the future;
- The shape and structure of any new trading relationship with the European Union.
Brexit does indeed feel very uncertain. That’s in its nature – so too are technological advances like AI but businesses have no real, difficulty in planning for and adopting these.
We’ve been quite clear in PwC that, actually, the contours of Brexit have been quite strong and there is already enough detail within those parameters that can be planned for.
Forewarned is forearmed. There are in fact many areas, such as direct and indirect taxes, people issues, migration, customs processes and intellectual property, where businesses can already identify the consequences of Brexit, whichever exit scenario prevails.
A ‘wait and see’ approach is not an option. Having knowledge of the key areas that will affect your business enables you to focus energy in the right places as more information about the final exit deal becomes available.
There are eight ‘no regrets’ decisions that all organisations should be considering now to prepare for Brexit;
- Plan to be agile;
- Support your people;
- Know your supply chain;
- Clean up your current data;
- Build ways to capture more data;
- Take advantage of existing government schemes;
- Check out your contracts;
- Engage with key third parties.
A proactive approach will mitigate much uncertainty and risk, including lobbying government on areas of concern that may not be on their radar, or identifying business-critical supply chains which could become inefficient once border controls are implemented.
Or perhaps your business has key employees who are resident in the UK, but originally from other EU countries who may need support to remain in the UK or will have to be replaced if they can’t stay.
For some businesses, this is a large part of their workforce, and up until now there has been no need to identify and track this population because of free movement of labour within the EU.
Our Midlands tax team has run several client seminars in Europe in recent months covering the practical issues arising from Brexit. It is clear from these that European businesses with UK operations of any size are very keen to discuss and plan for a post Brexit future.
All UK businesses should be identifying the key issues facing their business and developing an action plan to address them in less than two years’ time.
The details of our long-term relationship with the EU may not be fully known for years. However, businesses should use this time to – plan to be agile – whilethere is uncertainty in the political environment there could be business opportunities that lie ahead
For further information and to speak to us in detail about understanding some of the Brexit issues and scenarios outlined above, please contact me [email protected]
Ruby Parmar is the senior office partner for PwC in Milton Keynes.