What happens now?
An extension has been agreed by the EU and the UK but that really just delays the inevitable. As it stands currently another meaningful vote on Theresa May’s deal has been blocked by parliament if significant changes are not made to it before they see it again. The EU will not budge on negotiations so all Theresa May can change is the wording and that hasn’t won her any supporters the last two times parliament voted on it.
The only way to solve an indecisive parliament is a General Election for one party to try and win a majority that could get their version of Brexit through parliament. Even then that holds no guarantees as the conservative party cannot agree on one plan themselves and a group have splintered away from Labour due to their conflicting opinions on it!
If Theresa May’s deal is not accepted, which is a likely outcome, then there are three options.
- No deal – ruled out by parliament majority
- Cancel Brexit – ruled out by parliament majority
- Further extension
The further extension is the most likely route which would mean the UK taking part in EU elections and then pushing for a renegotiation, another referendum, or a general election.
It is difficult to see parliament getting behind a single plan so the future right now looks pretty chaotic!
Can a no deal still happen?
Yes. Even though parliament have ruled it out it is still the default option because the EU can insist the UK leaves with or without a deal.
This is unlikely as the EU has as much to lose with a no-deal as the UK does. But, emotions are running high on both sides at the minute and people are getting sick of Brexit. It might be that one side decides to end negotiations and tackle a hard Brexit head on.
How can you protect your business from Brexit?
It is smart to start thinking strategically about customs and trade. There may be some lengthy lead times ahead so that needs to be factored in. The moment a strategy is announced for Brexit there is likely to be a new custom’s system with new technology so budget for operational changes could be key.
You can reduce the risks by taking measures now. If you are dependent on one supplier, see if there are others you could rely on and look at global options outside of the EU. If there are single products and you are restricted to the EU for whatever reason then look at stockpiling. Lauralu can rapidly turnaround temporary building projects to give you additional storage for a stockpiling initiative.
Ideally, at this stage you need to create two game plans for your company. The first will prepare your business for a hard Brexit and the second will prepare your business for a soft or amicable Brexit. That way you can deploy either plan quickly and pip your competition to preparations.
What areas of business could be affected by Brexit?
There are several key areas that Brexit will likely impact that you need to be aware of:
In terms of workforce you need to know how many of your employees are from the EU and if they are aware of the next steps to register as an EU citizen working in the UK. This will help retain skills and labour. You must also consider that there will be less overseas migration in employment so your pool for recruitment is decreasing.
- Cross-border trade
In the event of a no deal Brexit companies will be required to register for an Economic Operator Registration and Identification number to continue trading. There will likely be non-EU market member customs procedures applied to imports which will mean larger lead times and lengthier processes.
- Currency/Intellectual Property/ Contracts
Currency is likely to be volatile so think about transactions, what currency you will be paid in and exchange rates. It is yet unclear whether trademarks registered in the EU will be applicable in the UK post Brexit. There could be some considerations in terms of contracts such as whether the UK is noted as a member state of the EU, whether it relies on EU regulation or if anything else might change legally when the UK leaves EU jurisdiction.
There will likely be changes to tax and VAT which you must be prepared for. For more information on import VAT, VAT registration in the EU and and Double Taxation please visit this information page.
- Regulatory Compliance/ Data Protection
You should identify which regulatory agencies you work with. Compliance across a range of sectors will change with Brexit. So far technical notices on regulation have been published for Transport, Farming and fishing, Energy, Medicines and medical equipment, Veterinary medicines, Satellites and space, Seafaring. Those technical notices can be found here.
Sector specific documentation is likely to be cruciall for some sectors. It depends on any funding that came from the EU, reliance on an EU supply chain and changes in legislation and primarily for most import rules. The exact issued as of the 28/03/19 for each sector can be found here.
Whatever you do make sure you are prepared. Risks can be mitigated, stock can be stockpiled and UK business can thrive with a little more investment in the national and global marketplace. One thing Britain does very well is survive in difficult economic climates.