Brexit Uncertainity – What Small Business Should Do?
Now that Boris Johnson has become Prime Minister, with his Special Adviser Dominic Cummings, who ran Vote Leave, ordering civil servants to prepare for an October 31st exit from the European Union, business is starting to understand that a “no-deal” Brexit could happen. This will have a massive implication for business. However, we don’t know how microbusinesses will fare in a no-deal situation?
The Government takeover is now complete – staunch Brexiteers now hold the greatest offices of state and they are very clear that Britain will leave in October 2019 with or without a deal come what may.
The CBI has been clearly stating that “no one is ready for no-deal”. Academia to Big business has been very clear that no-deal would be ruinous to their organisations and sectors.
Key details about customs processes in a no-deal outcome are complete unknowns.
However, here are some practical steps for SMEs and Microbusinesses to help mitigate No-Deal uncertainty.
Start With Your Post-Brexit Supply Chain
First things first… look at your supply chain. Even if you’re a small bar in Bristol or a fitness instructor in Dundee, you might not deal directly with the EU personally. However, some goods or services that your business depends upon might. So, talk to your suppliers now and start to piece together an impact-based picture of what barriers to trade with the EU might look like for your company. For example, if your bar is completely dependent on local patrons, but sells European brewed beers, then this could be a problem. Identity issues as soon as possible.
Register For EORI Number Status ASAP
Whether you import or export to the EU, you will need an EORI number on day one of a “hard Brexit”. The Economic Operator Registration and Identification number (EORI) is used by the EU and the UK government to ensure businesses pay the correct tax on imports and exports – this will be even more crucial if tariffs come into play. Sign-up today, click here.
Check on Post-Brexit Tariff Rates
In early March 2019, HM Government outlined plans to cut most UK tariffs with the EU in the event of a “no-deal Brexit”. The reason is that tariffs will drive prices up and the Government isn’t keen on consumers paying more for produce and dairy products thanks to a hard Brexit. This will help with imports. However, the EU has yet to reciprocate. This means that exports to the EU could leverage a tariff. You can view what your goods and services tariff rates would be by looking at the WTO’s “Most Favoured Nation” Tariff rate.
Consider Working With A Customs Agent
Whilst it may sound expensive, some custom agents do offer small business services that are cost-effective. As such, you could navigate the intricacies of the customs system yourself as a cost-conscious entrepreneur. But it could be a false economy. You might need professional help to help save you money in the longer term. This is where a customs agent comes in.
The customs process is complex. It is full of bureaucratic systems and getting one small part wrong can have a big impact later. So, getting a customs agent to help you with your customs issue could help your business save money.
Think About Brexit Licensing
If you are exporting specific live goods to the continent, as some small micro agriculture firms will be doing, you’ll need to sign-up for extra certification from the European Union. The Department for Environment, Farming, and Agriculture will signpost new information during any transition and/or hard-Brexit scenario.
Sterling’s Fall – Hedge Your Bets
Sterling has already started to fall. This creates consequences. It makes your products or services more attractive to foreign buyers. However, it will push up your own production costs as dollar/euro rates for your own supply chain will increase. This could see you receiving less money when your invoice is paid once a product is shipped than you agreed beforehand due to currency fluctuations.
Long-Term Brexit Uncertainty
If the UK leaves without a deal, many political and trade analysts believe any EU-UK trade relations would take some time to repair and rebuild enough political trust and capital to create a new deal. So, uncertainty would persist in the longer-term.
If you’d like to talk to Prestige Business Management about Brexit planning for small business, why not get in touch with our team today? Call us on 0203 773 2927 today.