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IT has been said that history repeats itself, first as tragedy, then as farce. Recent events in Britain seem to prove the truth of Karl Marx’s maxim.
If the Westminster parliament’s first overwhelming rejection of Theresa May’s Brexit plan was a tragedy – for the prime minister, at least – then the shambles which followed last week can be truly described as farcical.
Parliament voted to take a no-deal Brexit off the table but also voted to reject the only deal actually on the table.
Faced with wholesale rebellion, Mrs May offered a free vote on the key issue, then changed her mind, imposed a whip, and lost the vote anyway. She was defied by several ministers who have, nevertheless, kept their jobs. They included the minister in charge of Brexit who spoke in favour of the government’s proposals, then voted against them.
It all reads like a script from one of those old British ‘Carry On’ comedies: ‘Carry On Brexit’, starring Sid James as Jeremy Corbyn, Barbara Windsor as Anna Soubry and Kenneth Williams as Theresa May, crying “Infamy, infamy – they’ve all got it infamy”.
And we haven’t seen the end of it yet. Which brings to mind another maxim, this one attributed to Albert Einstein, that the definition of insanity is doing the same thing over and over again and expecting a different result.
Mrs May intends to put her twice-rejected plan to parliament for a third time. It sounds like insanity but, given the battle-weary state of MPs and the citizens at large, it could just be mad enough to succeed.
Despite parliament’s vote, a no-deal Brexit remains a possibility and the British government has published some of the tariffs it would impose in that event. They would not, of themselves, impact greatly on Cyprus but the stiff duties threatened against agricultural products, and some manufactured goods, would certainly bring a response from the EU. So, if a no-deal Brexit does happen, a trade war would seem a real danger.
For British expats there are other concerns such as currency fluctuation and the payment of private pensions (state pensions are safe). My advice to everyone is to hope for the best but plan for the worst.
If you are in business, and have any dealings at all with the UK, preparing for the worst means, first and foremost, auditing your UK contracts. Do they allow for 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.
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.
Planned or not, Brexit will pose 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.
On personal finance, I would caution against making any assumptions. If you have pensions or investments which you fear might in any way be impacted by Brexit, get them checked out while there is still time to do something about the problem.
Bear in mind, that there will be a Brexit of some sort, so you need to plan. Many British expats living in Cyprus have come here to retire or intend to retire here at some time. They need to secure their income and make it grow to give them the lifestyle they desire.
Brexit is an added complication, but it only adds to the necessity for good and careful planning. You need an adviser with expertise in your corner.
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. And if the Brexit farce does end in tragedy we will try to protect you from its worst consequences.
