With every sign that this week’s talks between the UK Government and EU will fail to reach an agreement, most businesses are now preparing for all eventualities. The Institute of Chartered Accountants has published a checklist of key points to address this.
Brexit three weeks to go and counting: ensure you prepare
Forward Financials offers this summary:
- Assess your working capital & cash needs. Uncertainty can affect the sales cycle, debtor collection and stock levels (with the need to retain higher stock). Businesses may well need to keep a higher cash buffer to ensure they pay on time. More complex port procedures will tie up working capital. Check if you can register for simplified import or customs procedures which allow duty and VAT deferred payments.
- Expansion plans in new overseas markets? All new trade agreements the UK Government is seeking outside the EU/ EEA are largely still in progress. Keep abreast of these to ensure you are ready to negotiate once they are finalised.
- Employing EU/EEA/ Swiss nationals? If there is no deal, employees must be registered for the settlement scheme by 31/12/2020.
- Additional customs duties on sales or your supply chain. A no deal Brexit will mean tariffs will now apply to UK-EU trade. The conditions will depend on negotiated trade agreements country by country and may even use the World Trade Organisation tariff rates.
- Trading within the EU or outside the EU. Make sure you have a UK EORI number. New rules suggest the information required for customs declarations may be complex and they need to be completed online. You may need to engage a freight forwarder or a customs agent to help. This may be at short notice.
- Have you registered for simplified import procedures? These mean you need not settle VAT/ duties on imports at port, thereby helping cash flow.
- Impact on your principal contracts. Ensure they clarify the terms of trade across EU borders, including how VAT is dealt with.
- GDPR and data from the EU/ EEA. GDPR is an EU regulation so if there is no deal, GDPR will no longer be law in the UK. However, the UK Government has every intention of making it so. For all practicalities, assume the rules still apply around data.
- Corporate reports. Consider how uncertainty affects accounting policies, judgements, estimates, going concern and contract/ market viability. Impairments may need to be reviewed.
If you wish to discuss working capital, your strategy, cash needs or accessing finance, then please let us know.
Our contact details are:
07780 336956 Raemy Singh FCA
07780 336952 Delphine Paterson FCCA ACIB
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