Deal or no deal: Five things UK businesses should be doing now to prepare for Brexit

Deal or no deal: Five things UK businesses should be doing now to prepare for Brexit

Deal or no deal: Five things UK businesses should be doing now to prepare for Brexit

 

Yesterday, I attended a brilliant Future Focus event organised by Unlocking Potential. The event was centred around how to deal with disruption and manage change in business. Brexit has already disrupted the UK business landscape and will undoubtedly continue to do so for years to come. To quote Katie Cavell, Cornwall’s representative in Brussels: “Unpicking forty years of economic integration won’t go down smoothly”.

There is an enormous amount of uncertainty at this moment in time about what the post-Brexit future will bring, but the overarching message of the event was that sticking our heads in the sand isn’t an option – rather than waiting for ‘impending doom’, there are things that UK businesses trading with the EU (and even those that aren’t) could and should be doing right now. Here are five hands-on tips to prepare for change:

Get an EORI number (no deal)

If you are trading goods with countries outside of the EU, you will need an EORI number. According to the HMRC website, ‘If the UK leaves the EU without a deal, you’ll need to get a UK EORI number to continue trading with the EU after 29 March 2019.’

You can find more info on the HMRC website.

Calculate the potential tariffs for your products (no deal)

As Colin Piper from Business West quite rightly points out: “Businesses need to understand their own pricing structure to know what it costs them to import and export goods.” In a no deal scenario, World Trade Organisation (WTO) tariffs would apply for any movement of goods between the UK and the EU.

To give businesses a better idea of the amount of import and export duty they would have to pay for goods in a no deal Brexit scenario, Business West have provided a ‘Brexit Calculator’ on their website. You’ll need the 10 figure tariff codes and the customs values of the goods you import from the EU each month.

Check out the Brexit Calculator.

Talk to your EU customers and suppliers now (deal or no deal)

Whether it’s individual parts or finished products, if you are currently supplying goods to businesses in the EU, make sure that you actively communicate with them during this time of uncertainty.

Even if you think it unlikely that Brexit will affect your provision of goods, your EU customers might not feel quite so confident, and may even have been advised to look for procurement options elsewhere in preparation for disruptions caused by Brexit. Take the opportunity to speak to your EU customers now to reassure them and to show them what steps you are taking now to ensure smooth operations.

The same goes for companies importing goods from the EU: speak to your EU suppliers now to minimise disruption to your supply chain.

Make provisions for increased costs (no deal)

We know that a no deal scenario would lead to an increase in costs. Tariffs would be applied for importing and exporting goods between the UK and the EU. The government will probably need to create new IT systems and processes to deal with the increase in bureaucracy around new customs regulations, which means that in turn, businesses will need to adapt their processes and systems in order to comply with these new regulations. The UK energy market, which currently falls under EU market regulations, would likely see volatility and hikes in energy prices. Presumably, at least some of these costs will be passed on to consumers, which will result in a rise in living costs, which might put pressure on business owners to increase salaries to cover those costs.

These are just a few examples of the price changes we can expect in a no deal event. Even companies who don’t currently trade with the EU will be affected if the UK leaves the EU without a deal, so it’s important to plan ahead and ensure that the business is financially resilient if costs rise. As Catherine Mead from Lynher Dairies puts it: “Make provisions for investments, because change costs.”

Speak to your staff now (deal or no deal)

Whether you employ British, European or non-EU nationals, Brexit affects us all on a very personal level. As a business, it’s important to acknowledge Brexit and the potential changes that it may bring, not only for the company as a whole, but also for individuals.

Communicate to your staff clearly and regularly, provide reassurance, and address the fact that changes may lie ahead. Take the lead to actively guide the narrative around Brexit in your company, to avoid staff members relying on hearsay and unhelpful comments that could fuel their anxieties. Remember the Y2K panic? Most companies appointed a person to keep up to date with developments and protocols, and then relayed them to the management teams. It might be a good idea to do this for the ‘EU Exit’ too.

Change is coming, we just don’t know what it will look like yet. At the end of the day, Brexit is just one of the many challenges businesses face, and it certainly doesn’t mean we can’t or won’t be trading with the EU in the future. As with any risks that businesses try to anticipate and mitigate, it’s about preparing for change and navigating it to the best of our ability. In the words of our Business Development Director, Mark Jones: «Europe is still very much open for business, it’s just that the rules are likely to change.»

 


Photo credit: Photo by Ross Findon on Unsplash