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Brexit impact on business: Four challenges to tackle

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The UK is intending to leave the European Union (EU) on 29 March 2019. Although there are rumours and suggestions the Brexit date might be extended, that’s all they are right now.

But what will the Brexit impact on business be? Here are four challenges that businesses must face head-on immediately.

And we’ve created a handy infographic, which you can see below, that highlights the views of business owners and gives them a voice on the challenges they’re facing with Brexit.

Challenge 1: The need to start preparing for Brexit

Businesses must prepare right now for Brexit. However, according to research from Sage in association with YouGov, just 33% of businesses have made a start.

And although the question of how long businesses have to prepare is surely answered by the upcoming Brexit date, 34% of businesses stated they don’t know how long they’ll need.

Here’s what we do know. Should the Withdrawal Agreement (or a variant) be ratified then there will be a transition period until 31 December 2020, which the agreement says could be extended for up to two years by mutual UK and EU consensus.

During this time little will change – the UK would be bound by EU rules and effectively remain part of the Single Market and Customs Union.

Businesses would then only have to adjust when the UK moves to a future yet-to-be negotiated UK-EU relationship, once the transition period has ended.

In the event of the UK government being unable to ratify a Withdrawal Agreement then, according to existing legislation, the UK will leave the EU abruptly as of 29 March 2019, and EU legislation, regulation and institutions will no longer have oversight in the UK.

Because it represents the most significant change, it is this no-deal Brexit scenario that has seen most of the preparation by the UK government and the EU, even though both continue to state that this is not an outcome they desire.

The message is clear: businesses need to start preparing for Brexit now.

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Challenge 2: Dealing with the impact of Brexit

There are three key priorities for any manager or business owner when it comes to dealing with the impact of Brexit:

  1. Understand the key impacts for your business
  2. Identify areas for further analysis
  3. Prioritise activities to prepare for the changes arising from the UK leaving the EU.

Even if the Withdrawal Agreement or a variant is ratified, many of these actions will likely still have to be undertaken to prepare at the end of the transition period – albeit with significantly more time to do so.

In other words, it would be a mistake to wait any longer to see what happens, and the actions outlined here are constructive in any event.

You should identify who should take ownership of Brexit issues arising from the above analysis. Each person or team should know what the timelines for completion are, and any additional funding or resource requirements.

Given the limited time now available, they should prioritise the required actions and first complete those that are critical for your business to continue operating, regardless of whether this is from a people, supply chain or other perspective.

Brexit impact on business

Challenge 3: Tackling an increase in business admin following Brexit

There’s no question that Brexit will lead to an increase in business admin for businesses, certainly in the short term as new legal structures are put in place and businesses adapt but perhaps also ongoing.

At the moment, trade with EU countries is very nearly frictionless and upon the UK leaving the EU, it’s hard for even the most hardened optimistic to believe that won’t change. Additionally, everything from data protection to safety standards will be affected by Brexit.

Despite information about Brexit remains scarce, it is still possible for business owners and managers to put plans in place so they are in the best position to tackle Brexit. Here are some suggestions.

Update your systems and IT

Ensure your computer systems are up to date. For example, most accounting software anticipates VAT with EU countries being handled as it is currently, and this must change following Brexit (or following the withdrawal period ending).

This is where cloud software offers a huge advantage because you’re always using the latest version, and you don’t even have to do anything to ensure this is the case (no need to download updates, and so on).

You might even need to invest in new software and systems to meet some of the forthcoming requirements for Brexit. There are likely to be new compliance requirements, such as conformity standards for manufacturing and financial services. The subtleties in how these are handled will easily be taken care of if your IT systems are up to date.

Get better at managing your time

Brexit is going to place a whole new layer of administrative demands upon you and your team, and it’s going to be vital to manage your time well if you want to give the business the attention it needs. The good news is time management is a skill that can be learned and improved.

For example, you might want to evaluate your task list and start realistically estimating the amount of time each requires, as measured in half-hour units so you can later add them to a schedule or calendar. To be blunt, this can be difficult because it requires an honest evaluation of your abilities.

There will be things you’re good at and things you’re not. This process also requires a blunt evaluation of the task. Although most of us could spend all day responding to emails, for example, doing so would mean we don’t get any revenue-generating work done.

Therefore, limiting email checking to just a few 30-minute slots during the day can be the only sane way forward.

You should set time aside each day or week for Brexit-specific tasks, of course, and constantly revise this list.

Learn to delegate

The basic task of evaluating your workflows outside of actually performing them has the benefit of letting you identify those that you actually don’t require, or that you can delegate to others in your business or organisation.

Everybody needs to be involved in Brexit preparations, as there is no department or area it won’t touch upon.

You should also use the opportunity to identify those processes that truly belong to you and you alone in that they rely on your unique skills, experience or authority, and those that could belong to the wider business. The latter are the ones that might be delegated to others (either to your employees or outsourced).

Get help from the experts

For most businesses a key way of dealing with the Brexit admin overload will be to call upon on expert outside help, especially if the work requires skills you don’t have.

Consider this as a way of buying back time, which you can spend better by dealing with revenue-generating activities. Is it more profitable for you to spend a day updating your website with your new post-Brexit business details, or to hand that off to an external web agency and spend the time directly undertaking work for clients?

Some admin tasks are very amenable to hiring somebody part time or using a local firm. For example, you will almost certainly have more sophisticated accounting needs via Brexit, so perhaps it’s time hire a bookkeeper or accountant, if you don’t already.

Read more about Brexit:


Challenge 4: Guidance on tax, safety standards, and personal data

So where is Brexit most likely to impact your day-to-day business? Here are some key areas.

Brexit impact on exports (and imports)

Customs and indirect taxes such as VAT for imports/exports to the EU are sure to change following Brexit, regardless of whether we have a no-deal Brexit, or a withdrawal period.

This will affect both products and services sold within the EU by UK businesses.

The UK government has published a document on how to prepare for Brexit in case of a no deal.

The best policy is to keep up with this documentation. Be prepared to move quickly because, in the event of a no-deal Brexit, there is likely to be very little time to make adaptations for the effect of Brexit on trade.

Safety standards

Following Brexit, it’s likely the UK and EU will have different standards for safety, health, environmental protection requirements, and more.

UK businesses trading in the EU will have to comply with both the EU and UK bodies overseeing their industries, and potentially show additional UK compliance marks on products too.

The good news is that the UK government has announced it will allow goods that are made and assessed against EU regulatory requirements to be sold in the UK – but this will only be for an as of yet unspecified period.

The EU has not (yet) reciprocated so exporting to the EU is likely to have new compliance requirements on “day one”.

Once again, businesses will need to constantly monitor documentation produced by both the UK and EU after the Brexit date to maintain compliance.

Personal data

Due to the UK already implementing the General Data Protection Regulation (GDPR) within domestic legislation, UK businesses are already likely to be compliant with the word and spirit of what the EU requires.

However, the ability to share data with EU countries will hinge upon the UK being granted an adequacy decision by the European Commission ahead of the UK’s exit from the EU, or for the UK and EU enter into a separate legal agreement. This remains to be seen.

Again, those working within IT will have to closely monitor pronouncements and documentation from the UK and EU, as well as the UK’s Information Commissioner’s Office (ICO).

Conclusion

By reading this article you’ve already gained a potential business advantage over your competitors because you know you should start work on Brexit preparedness now.

As the Sage survey results show, the majority of businesses in the UK aren’t making preparations for Brexit – but they need to be.

How is your business preparing for Brexit and what challenges are you facing and tackling? Let us know in the comments below.

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