Business Brexit Checklist
Leaving the European Union will harbour change for all businesses regardless of size and sector in the UK. Many companies have already planned and made changes for the different challenges as well as opportunities that Brexit will bring. In fact, the Chambers of Commerce is under the belief that all businesses, regardless of how they are affected, should make sure they go through a Brexit checklist of sorts as well as a test that encompasses a broader field of existing business plans. Having a Business Accountant firm in London on hand will do wonders to mitigate most of the risks that Brexit will bring to the table. Accountants are specifically trained for all sorts of situations such as this; it’s never a bad idea to hire people with specialized knowledge to make sure that your business is protected and that no costs can surprise you in the future.
The Guardian News has a dedicated page to cover all Brexit-related news which can be seen here.
Have a look at the following table to see if your business is Brexit ready.
|To Consider/Take Action
|Workforce as well as future skills required
|The Withdrawal Agreement states that all EU nationals along with members of their family who have lived in the United Kingdom for at least five years as of 31st December 2020 will be eligible to apply for something called a UK Settled Status EU nationals. Also, their family members who have lived in the UK for less than five years can ask for Pre-Settled status.
|Ask yourself what proportion of your workforces is from EU27. Make sure they know what they need to do so that they can register as EU citizens working in the UK. Do all that you can to not lose out on essential skills and labour.
|Future Staffing Requirements
|As we look further beyond the immediate future, there will be changes made to how the UK’s immigration works. The British Chambers of Commerce is guiding the Home Office on the matter.
|Think about what your needs will be in a few years in terms of labour and skills. Ask yourself if you will have a requirement of skills available from people outside the UK. Will your business be able to work with different arrangements?
|UK/EU customs check
|Brexit will put the UK outside the customs union which will mean that exporters might be mandated to make customs declarations in the future.
|Think about what customs procedures your firm is compliant with when it comes to trade with non-EU markets. Ask yourself if you’re ready to apply the same procedures to imports and exports to the EU.
|Likely delays at the UK/EU border
|There is the potential for customs checks when it comes to the UK as well as the EU. Account for delays at the border.
|Customs checks at the border have the potential for lots of delays. In practice, customs checks are risk-based instead of universal. Right now, there aren’t any new details as to how customs enforcement will be executed.
|Tariffs on UK-EU trade
|The British Chambers of Commerce has been a strong voice for zero taxes when it comes to trade between the EU and the UK after Brexit.
|Ask yourself if you know the HS codes for all of your products. HS codes are an international classification system for products. You should also know the EU MFN tariff that is relevant to your product.
|Rules of Origin in EU-UK trade
|If the UK reaches an agreement with the EU about zero-tariff trade, companies who’d like to benefit from fewer tariffs will have to show that their product is from the UK. This translates to showing that 50-55% of their product has been sourced locally. All of this is dependent on the terms negotiated between the EU and the UK.
|Suppliers should find out if any customers have asked them to furnish proof of their products sources. If required to provide evidence, will you be able to do so?
|EU trade agreements with third countries
|Currently, the UK enjoys the benefits of existing trade agreements with other countries. However, the future might hold a scenario where all of the current terms will change. In addition to this, preferential trade terms may be off the table.
|Find out if your business exports or imports using preferential duty rates which are furnished by the EU’s existing framework on trade agreements. Think about how changes to these preferential rates will affect you.
|Customs facilitations, reliefs etc
|UK businesses currently enjoy plenty of duty relief schemes.
|Explore these duty relief schemes and decide as to whether to apply for some of them.
|Find out if any current staff member on hand is knowledgeable about customs as well as export. Would the cost of training a member of staff in this field be a worthwhile endeavour? Keep in mind that the Chambers of Commerce can give businesses relevant training as well as ongoing support.
|In a scenario where the UK doesn’t come to an agreement with the EU, UK businesses who wish to trade with the EU will have to register themselves for an Economic Operator Registration and Identification number (EORI) to continue their trading operations.
|Consider registering for an EORI number in the worst-case scenario as a contingency plan so that your business operations aren’t based on what the outcome of the Brexit is.
|Find out if any member of your staff is familiar with INCOTERMS.
|In the scenario where there is no deal between the EU and the UK, the UK will introduce a type of accounting known as postponed accounting which is a system that’s already being used for intra-EU trade.
|HMRC has produced an information pack for businesses to be able to plan in the event of a no deal scenario for the EU exit. The information pack has information as to how VAT might change as well as preventative actions to take.
|VAT registration in the EU
|Companies that trade in goods and hold stock in EU countries for their EU customers will be required to register for VAT in that country.
|Think about which country would be most suitable to support a supply chain to the EU. Find out if you have access to bank guarantees which will be required by Fiscal Representatives. Find out if your current business model allows enough room for the new costs that all of the new processes will bring to the table.
|Currency volatility might happen in the future as demonstrated by what happened in the months after the EU referendum.
|Depending on the currency you are paid in, you might be affected by Brexit as the currency rate will be unstable for a while. Contact your local Chamber on recommendations to mitigate risks.
While there are plenty of other talks as to how Brexit could affect businesses, the points on this list cover the main areas companies need to watch out for. In addition to this, hiring Accountants would be a boon for your business as they are trained for these scenarios and can give you specialized knowledge. Plenty of Accountants in London offer competitive rates so you can pick a Business Accountant in London that is dependent.
Clear House Accountants are specialist Accountants services provider in London who work with businesses to help them grow by creating smart and effective Tax, Accounting and Business Growth Solutions. We are Business Accountants who pride themselves on being complete business and growth solutions providers.
For more information about Brexit from the UK Government click here.
Thao is a Senior Accounting Manager at Clear House Accountants. Her experience in the industry has led her to her current position in which she is responsible for a team of accountants, tax planners and bookkeepers.
Thao works with her team to help clients from a variety of industries, grow, save money and plan for the future. Thao holds a Bachelor and Masters degree in Accounting and Finance and is currently working towards her ACCA, she is also a Xero and Quickbooks Certified Advisor.
Thao’s expertise lies in high-level tax planning, management accounting and strategic business planning based on financial performance and business analytics. Her experience, expertise and knowledge make her an exceptional contributor at Clear House.