After Boris Johnson has made it clear that the UK will leave the EU on October 31st, the clock is ticking.
There is just over 2 months left until the deadline, and whilst the Prime Minister is trying to negotiate a better deal, there are still real concerns that these negotiations will come to nothing.
The Confederation Of British Industry released a report that offers real advice for UK businesses to lessen the impact of a no-deal Brexit.
The report shows that smaller businesses really aren’t prepared, so hopefully this blog will help you to consider the future, and implement some of this advice.
The biggest areas of concern for a no-deal Brexit fall into three categories: the movement of goods, tariffs and people.
1. The Movement Of Goods
No-deal Brexit would mean that there would be an increase in costs for moving goods.
As goods cross the border, there will be new requirements in place. The border checks and new system will inevitably lead to delays.
2. Tariffs & Tax
There will also be a change to tariffs. Some will be abolished, whereas others will be added.
Added tariffs will apply to exports from the UK, which would mean selling within Europe would be more difficult as UK businesses would have to adjust their prices and be unable to compete as they can now.
October 31st sits in the calendar before Black Friday and the Christmas shopping season which means that customer demand will be high at the point of a no-deal Brexit.
If businesses haven’t correctly adjusted their prices in accordance to the new tariffs this period of time could severely damage a businesses profit, with the potential to leave some short of cash as they enter the new year.
One thing that the Prime Minister has been clear on is that EU nationals within the UK, and vice versa, will be granted permission to stay in their residing countries.
This is a big plus for businesses who hire staff from EU countries and it’s expected that this deal will be in place at the point of a no deal Brexit.
How Can Small Businesses Can Prepare For A No-Deal Brexit?
In summary, businesses need to adjust their projected cash flow by factoring in the increased cost of goods that have been moved to the UK.
Failing to do this could lead to devastating consequences to businesses across the Black Friday and Christmas holiday period.
Business should also be aware of the delays that could occur at the border when moving goods across countries.
Increased tariffs will also make it difficult to compete with sellers who are within the EU and don’t have these tariffs applied to their goods.
Despite the concerns, the government is positive about how the UK would handle a no-deal Brexit.
Michael Gove, who is part of Boris Johnson’s cabinet says: “The entire machinery of government will work to help ensure our businesses will be ready, our factories will be ready, our hospitals will be ready — and the British people will be ready.”
A full copy of the CBI report can be read here (CBI Report). The CBI also expects clear resources will be available for small businesses from September onwards.
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