Preparing_ for_ Brexit
Brexit has monopolised thousands of column inches of newsprint, and thousands of hours of broadcast media. As a topic that’s far from resolved, it’s likely to consume thousands more. Since much of the coverage is opinion and speculation, how does that leave us to prepare for Brexit’s impact?
At this point, the only certainty is uncertainty. No one knows the ultimate outcome of negotiations or even precisely when they will start. Similarly, no one can say with any surety which, if any, EU-derived tax laws and accounting legislation will remain in force, be adapted or abolished in the UK.
Tax and accounting
For example, differences between financial reporting requirements in the UK and the EU could widen, adding extra complexity to business accounting. Or the UK Government may try to reduce complexity by maintaining current EU-approved practices, but slowly phasing in UK specific tax and accounting laws in the future.
Migration is one of the more contentious Brexit issues. To date, the EU insists freedom of movement, amongst other things, must be accepted by the UK in return for access to the single market. UK businesses employ a significant number of migrant workers and their continued availability will have a definite impact on profitability.
Brexit will inevitably affect every business in the UK to a greater or lesser extent, but the greatest challenges will be experienced by companies with European or global partners and clients. Currently, the weaker pound is good news for exporters but bad news for importers. It’s uncertain when the pound will regain its lost ground against the Euro, but it’s clear we will have to accept increased costs in the coming months.
Faced with all this doubt, our advice is to stay informed and try not to panic. It will be at least two years before negotiations are concluded and probably several more before they are fully implemented. The currently volatile markets and currency rates will find their correct levels. Now is not the time for hurried decisions; although inaction may be frustrating, the best course is to be patient and see how things settle.