After four and a half years that seem to have lasted a lifetime, the UK will finally leave the European Union on January 1 2021 when the Brexit transition period ends.
While some issues, including the small matter of a trade deal, remain up in the air, the imminent reality of Brexit is something that everyone needs to face up to. This is perhaps especially true for business owners.
With so much uncertainty still surrounding the process, not to mention the unprecedented impact of COVID-19, the UK’s small and medium-sized business (SME) owners will benefit from being as prepared as possible for yet another “new normal”.
With that in mind, we’ve prepared a basic checklist to help SME owners ensure that they are as prepared as possible for Brexit.
Should the UK exit the European Union without a deal in place, then the export and import of many goods to and from the EU will be subject to new tariffs. This is likely to be true even in the event of a deal, so it’s something to prepare for no matter what.
It’s vital to review your business to assess whether import or export tariffs are likely to impact you, monitor what the new tariffs could be and then, should they apply to you, decide how to proceed. It may be time and cost-effective for your business to employ a customs agent for this purpose.
With Brexit approaching, business owners will need to audit their supply chains, in order to glean which goods and services come from the EU. You’ll need to familiarise yourself with your contracts and how different potential clauses will impact them.
You’ll want to discuss these issues with all of your suppliers and service providers to see how they will be impacted and what their plans are. If anyone in your supply chain is impacted, they will likely increase their prices.
However, higher prices are preferable to suppliers that haven’t yet prepared for this eventuality. If there is anyone in your supply chain who hasn’t factored Brexit into their business, then you are advised to look for alternate suppliers.
You’ll need to ensure that any of your UK-based employees who are EU, EEA or Swiss citizens have registered for settled status to ensure that they are able to continue living and working in the UK.
There is some leeway here, as this will apply from 6 months after the end of the transition period (June 31 2021). If you need to sponsor one of your workers in order for them to remain, then a new points-based system will come into effect, covering EU and non-EU sponsored workers, from January 1 2021.
It could be the case that the UK and the EU both take a while to get used to post-Brexit life. This could mean potential border delays, as well the time needed to adjust to new expenses such as tariffs.
To begin with, many businesses (not just yours but those of your clients and customers) could see a squeeze on cashflow and may need some extra funding to cover a somewhat leaner New Year period than usual.
While many businesses will doubtless be thinking the same way and getting financing in place may take a significant amount of time (and paperwork), its worth getting done ahead of the end of the transition period, so that you know that it’s in place and you can lock in current rates, which are only likely to rise post-Brexit.
It’s unfortunate (although perhaps not surprising) to think that there is still so much Brexit uncertainty this close to the deadline. But in spite of this, it’s vitally important to be as prepared as possible.
With so much uncertainty, perhaps the most important thing to remember is the need to be agile and decisive, to enable your business to adjust as well as possible to whatever the post-Brexit world looks like.