Foresight versus hindsight for Brexit vision
It’s better to have taken (potentially unnecessary) precautions than to wake up on 1 November in no-deal reality with ‘if only’ regrets.
Since Boris Johnson first came to office as Prime Minister on 24 July, every day has seemingly brought a new twist to the Brexit tale. And still, the possibility of a no-deal remains on the table. Our Brexit Impact Specialist, Paul Samrah, shares his five top tips for businesses planning for a no-deal scenario.
1. Import tariffs and duties
Contrary to popular belief, under a no-deal Brexit, the UK would NOT move to World Trade Organization rules. Instead, different rates of customs duty on imports into the UK from the EU27 and the rest of the world would apply, set by the UK government. (See list of temporary import tariffs here.)
1. Negotiate with suppliers sooner rather than later, as tariffs would be based on the full market value of the goods and services;
2. Be responsible for using the correct commodity codes.
Have a contingency plan: allow time to make the necessary adjustments and train staff, and prepare for cash flow interruption.
2. Brexit readiness analysis
Forward-thinking businesses are strategically evaluating their level of readiness for a no-deal. We have developed an analysis tool – BX360 – that provides a detailed breakdown of actions needed in the post Brexit era. It dissects customs and tariffs, finance and taxation, legal aspects and contracts, and people implications to help businesses prioritise actions.
3. EU27 citizens staying in the UK
Those from the EU27, Switzerland, Norway, Iceland or Liechtenstein should check if they and their family need to apply to the settlement scheme. Our HR consultants are already busy helping businesses plan for maximum staff retention.
4. UK companies with their seat in the EU27
The seat is where the management takes place and where its decisions are transformed into the day-to-day activities of the company. In a no-deal, UK companies would lose their current right to freedom of establishment.
Instead, each EU27 member state would apply its own rules on recognising UK-registered companies. Limited companies could be treated as a partnership, meaning shareholders losing the benefit of limited liability and becoming personally liable for the company’s debts. Some might require a cross-border merger into a local limited liability company. Whatever a business’s restructuring needs, we can readily assist at local country level.
5. Post Brexit travel
Any Brit planning to travel to the EU27, should check that their passport is valid for at least six months from 1 November. They should establish whether their travel insurance covers any pre-existing medical conditions and, if planning to drive, have such documents as an international driving permit, GB sticker and insurance green card. Before travelling, they should find out from their mobile phone operator about data roaming and allow extra time for passport and border control delays.