Brexit and Businesses
23 November 2018
The decision to leave the European Union will have significant and wide ranging implications for UK businesses doing business with the European Union.
Currently companies based in the UK can sell goods to EU customers without additional taxes and can import goods tariff-free. However, since the Prime Minister has ruled out continued membership of the single market, a new arrangement has to be reached. What does that mean for UK businesses;
Unless a trade deal is reached, it’s likely that the cost and administrative burden on doing business with the EU will rise.
Many businesses are already experiencing changes in the labour market and currency effects. Cost and availability of certain supplies/ goods may change substantially.
Period of regulatory and legal uncertainty
New UK regulations are likely to replace EU law and bring into effect future trade arrangements. Legal uncertainty is likely while these changes bed in up to 2021 and beyond.
EU citizens working in the UK and UK citizens working abroad may face additional requirements for work, residence and travel.
The value of the pound dropped after the referendum result. While a weak pound may be good news for foreign companies looking to invest in UK businesses, and the past few months have already seen a rise in foreign investment, we are seeing it also means that import prices have risen already and look set to rise further.
Supply chains may be affected by tariff and country of origin requirements. Where goods contain constituents from multiple sources, identification of country of origin rules may change
Changes in sources of funding
EU funding is likely to cease. Funding (and administrative requirements in relation to it) for certain sectors may change.
Issues around brand names and designs
Rights holders will need to apply for separate UK trade mark/ designs as well as EU rights once the UK has exited
What can I do to prepare my business?
At this stage it’s important you keep your options as open as possible. While the economic picture is currently strong, the final shape of the UK’s trading options is still very unclear and it’s worth planning for a range of eventualities. It’s also a good time to be busy. Explore as many export channels as possible and, if possible, make relationships with trading partners outside of the EU.