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It has been signed by Theresa May and sealed by Michel Barnier, but neither the British government nor the European Union is confident they can deliver a Brexit agreement.
Mrs May is arguing her case up and down the UK in the run-up to a ‘meaningful vote’ in parliament. She hopes to secure a majority for the deal she reached after two tortuous years of negotiations.
But the numbers are very much against her and businesses, which had hoped for some certainty at last, are still on the Brexit roller-coaster, their hopes raised one day and dashed the next.
The Cyprus government has agreed terms that would keep trade with Britain flowing, guarantee the residency rights of expats and ensure a smooth transition during which the UK would operate within the framework of the Customs Union.
The possibility of Britain leaving the EU without a deal has put all that in jeopardy. Businesses here can only hope for the best – but they must also prepare for the worst.
Here are some steps you should take to ‘Brexit-proof’ your business:
AUDIT YOUR UK CONTRACTS: Many businesses may find that their current contracts lack the details to deal with a new customs border between the EU and the UK. Check the ‘incoterms’, the legal provisions for importing and exporting that define who is responsible for shipping goods across borders. This is especially important for VAT.
BE CUSTOMS AWARE: It may be necessary to file customs declarations for all goods, both exported to, and imported from, the UK. This will require updates to business operations software. You will need to ensure your internal systems can communicate with both the EU’s customs technology and a new UK system.
ASSURE YOUR CLIENTS: Britain’s Chartered Institute of Procurement and Supply reports that 40% of UK companies are seeking domestic suppliers to guarantee continuity. If you are confident of your ability to supply the UK, let your client know. If the client has fears, now is the time to discuss them.
SPREAD THE RISK: If you are dependent on a single order or one large contract for most of your revenue, or if you conduct business mainly with UK-based companies, start sourcing additional customers to safeguard your business.
ENSURE CASH FLOW: Brexit poses a cash flow problem for trading companies because VAT will be charged at the border when selling goods and services to the UK. Make sure you have a steady cash flow. If you are dealing with customers who have failed to pay their accounts for some time, look into contracting outside assistance to help bring in those payments.
INTELLECTUAL PROPERTY: The British government says European patents will still apply in the UK but, according to its own website, the UK is “exploring options” in other IP areas, such as trademarks and designs, because in many cases these will lapse after Brexit. Companies will have to act quickly to ensure they can still protect their existing rights in the UK. If this a problem for your business, you need to be aware of it.
STAY CALM: The prospects are daunting, but panic won’t help. Think through each action. Talk to your clients and ease their fears, for, rest assured, they will be fearful too.
TAKE ADVICE: This is not the time to go it alone. You need an adviser with expertise in your corner. That applies not just to companies but to the individuals who make those companies run.
This is a particularly worrying time for British expats who will have concerns for both their businesses and their personal finances.
The Woodbrook Group is an international firm of financial advisers. Our team of highly experienced financial consultants can help you with solutions and services tailored to your unique situation.
We can’t make Brexit disappear, but we can ease some of the worries it may be causing you.
