How can UK businesses combat uncertainty after the Brexit vote?
Business Strategy –
- Set up a Brexit task force within your business.
- Analyse how different post-Brexit trading models will affect your business.
- Build flexibility into your business plan.
- Review the potential impact and give employees what reassurances you can (even more relevant to employees of EU or non-EU origin.)
- Review employee contracts and consider what action may be needed to ensure talent is protected and retained.
Keep focused on any changes in tax and UK transfer pricing rules that emerge and keep in mind the following:
- Managing your VAT registrations and administration costs.
- The working capital needed to finance the VAT cash flow costs of imports and exports.
Mergers and Acquisitions –
If considering an EU-based business acquisition it could be prudent to move more quickly before Brexit negotiations begin or are completed. Can you bring forward a sale to an EU based competitor before the Brexit negotiations are finalised?
Operational Considerations –
Take a look at your supply chain and ask:
- How would total costs compare from EU suppliers versus non-EU suppliers?
- Are sales within the EU large enough to justify relocating some operations to an EU site to avoid a customs duty hit on margins?
For contracts that will be active beyond 2018, consider carrying out a Brexit review to determine the flexibility to survive potential changes.
Where new contracts are being negotiated, consider whether to incorporate break clauses or price adjustment clauses following Brexit.
If your business is operating within the regulated industries, consider transferring functions within the EU to continue to benefit from ‘passporting’.