A survey of almost a thousand company directors, by the Institute of Directors (IoD), suggests that nearly a quarter of businesses are unprepared for Brexit and simultaneously do not anticipate readying themselves by the end of the transition period on 31 December 2020.
A further 21 per cent said they were still not ready but hoped to be so by the start of 2021 when the UK will formally leave the EU single market and customs union, and 28 per cent of businesses did not think that Brexit would impact their organisation in any way.
Of the actions already taken by businesses to prepare, most had or were looking at building up cash reserves, with more than a third of respondents having done so already.
However, many firms still needed to obtain EU licences and authorisations to continue trading once the transition period ends and new customs arrangements take effect.
Half of the businesses surveyed said that the Coronavirus pandemic would magnify the impact of a no-deal Brexit on their organisation, while less than one in 10 thought the reverse. The remaining businesses thought that it would have little or no effect.
Allie Renison, Senior Policy Advisor at the IoD, said: “The prospect of no-deal would be daunting enough, let alone dealing with it in the middle of a global pandemic. These disruptions won’t cancel each other out, if anything they would compound the pain for British businesses.”
Colin Airey, Partner, comments: “Preparing for Brexit is undoubtedly challenging since much of the detail is still to be determined. What action is required will depend upon whether we come away with a deal and, if so, what the deal entails.
“That being said, businesses will be impacted whether they are UK-only or trading internationally, and so they need to start somewhere.
“As we await the outcome of negotiations, there are a number of things that you can begin to mull over if you haven’t done so already, including the requirement for British companies to have an EORI number; the impact of tariffs on your cash flow; the administrative burden associated with imports and exports, and changes to certain accounting rules.”
How can George Hay help?
When importing and exporting goods, businesses will need to ensure they are prepared to comply with legislative changes and that they understand the tax implications of any new rules.
We have a team of expert tax and business advisers, who can support you now and beyond the transition period to ensure you can continue to run your operation in a tax-efficient and compliant manner.
To discuss your circumstances or any concerns you have, contact us today.