How could a ‘no deal’ Brexit affect my business?
Nov 08, 2018
Business Advice VAT
There are fewer than 150 days remaining until the UK is scheduled to leave the EU, and there’s still a huge amount of uncertainty around the type of deal which will be secured. The government has reached an agreement with the EU on an ‘implementation period’ which will last from 29 March 2019 until 31 December 2020, during which time trading with the EU will broadly stay the same. However, beyond this point, the outcome is still anyone’s guess.
The government is keen to secure a future relationship with the EU, but is at the same time encouraging businesses to prepare for every eventuality. There is a reasonable chance that we’re facing a ‘no deal’ Brexit, and the fallout from this could greatly affect the stability of many UK businesses. Small and medium sized businesses (SMEs), whether they trade with EU countries or not, could face a substantial amount of financial ambiguity at this time, and so it pays to be sufficiently prepared.
Funding after Brexit
Brexit will no doubt bring with it the removal of access to certain EU funding schemes for SMEs. Numerous industries will be affected, and the knock-on effect will put pressure on UK lenders to step-in and provide financial products to bridge any gaps. It’s important to review the different scenarios that could play out, and ensure that you have made contingency plans to minimise disruption to your business.
Trading with the EU
If you currently export or import goods within the EU, and we leave the EU without a deal, there will be immediate changes that impact on your business. Customs, excise and VAT procedures will have to be applied to all goods you sell to, or receive from, the EU, in the same way that they already do for goods traded outside of the EU. From March 2019 you’ll have to start completing customs declarations, and customs checks will apply to your business for the first time.
If this instance, trading with the EU will follow much the same rules as we currently have for trading with countries outside of the EU. There’s information about trading with countries outside of the EU on the government website, which provides some useful background:
• Importing from non-EU countries: www.gov.uk/importoutsideEU
• Exporting goods outside the EU: www.gov.uk/exportoutsideEU
The government has also published a host of documents covering How to prepare if the UK leaves the EU with no deal. These include information on customs (Trading with the EU if there’s no Brexit deal) and one explaining VAT – VAT for businesses if there’s no Brexit deal.
HMRC will keep EU trading businesses updated with what actions they’ll need to take and when, and more information will be published before and after 29 March 2019. If you want to keep up-to-date with these changes you can register for HMRC’s EU Exit update service. Just enter your email address and select ‘EU Exit’. If you’d like to chat through the implications Brexit may have on your business, then please do get in touch and we’ll be happy to help.