Final countdown: Preparing your business for Brexit

It is hard to forget with everything happening in the world that the transition period for Brexit will soon be over and will present another challenge for businesses to face. With just under three months to prepare for Brexit, there are many things that businesses need to consider prior to 1 January 2021...

Dan Town,  Audit Director within the corporate services team at Hazlewoods has highlighted five areas that companies need to consider now in order to continue with developing their international #BusinessForTomorrow.

Tax and tariffs

 Those companies that transport goods in and out of the EU will require an economic operators registration and identification number from 1 January, and all goods imported to the UK will be subject to UK global tariffs. It is likely these changes will lead to increased costs, so understanding the cost implication of these tariffs will help with forecasting profitability, pricing and cash flow.

You can apply for an EORI number here: https://www.gov.uk/eori

You can check which tariffs will apply from 1 January 20201 here: https://www.gov.uk/check-tariffs-1-january-2021

Supply chains

 With the impact of COVID-19 still uncertain and possible illness of staff working at ports and borders, speak to your supply chain about Brexit and find out what they are doing to cover potential border delays. When the UK tried to exit the European Union previously many businesses stock-piled to cover anticipated border delays but with businesses having used cash reserves to cover the impact of coronavirus, understanding your supply chain will be critical to minimise disruption to your customers. If there are any links in the supply chain that have not prepared for Brexit, consider looking for alternative suppliers who can help reduce the disruption to business.

Staffing

 From 1 January, there is a requirement for individuals from either an EU, EEA or Swiss citizenship to apply to stay in the UK under the EU Settlement scheme. If your company relies on overseas labour from countries covered by the EU Settlement scheme, review your workforce and understand the position of those employees who fall into this regime. Whilst there is a transition period the sector you operate in may impact access to labour and therefore increase costs of both recruitment and training any new employees required to replace employees no longer allowed to work in the UK.

Employees can use the following link to apply to stay in the UK: https://apply-to-visit-or-stay-in-the-uk.homeoffice.gov.uk/euss

 Financing

 Businesses that have seen cash reduce during the pandemic, expected stockpiling and storage costs to cover potential border delays, currency fluctuations and price rises will all have an impact on cash flow. With the announcement of the Government backed borrowing application extended to the end of November and the maximum term of repayment from 6 years to 10 years, external borrowing might be attractive to finance any short-term impact of Brexit.

Data regulation

 Whilst GDPR will be retained in domestic law at the end of the transition period, the UK will have independence to keep its framework under review and currently there is no guarantee regulations will be place by 1 January 2021. Whilst companies can put in place standard contractual clauses (SCCs) between the company and the sender on EU approved terms, this is only applicable for small and medium sized entities, so larger companies or multinationals need to consider how they will accommodate changes to data sharing, how data is stored and any changes required to contracts.

Guidance is available from the information commissioner’s office (ICO) and is being regularly updated for changes to data protection compliance.

Whilst we continue to work through what normal will be for business ahead, you should make time to review your current Brexit plan and what actions you need to take to ensure your business is ready for 1 January 2021.

For support with building your #BusinessForTomorrow and international business advice, please contact Dan Town on email [email protected] or call 01242 680000.

For further insights and advice to support you and your business visit www.hazlewoods.co.uk

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