There remains a great deal of uncertainty surrounding the detail of Brexit and given the additional strains placed on the economy with the ongoing COVID-19 restrictions, it would be a brave accountant indeed that tried to predict the financial consequences.
So, rather than speculate wildly we thought that it might be an appropriate time to reflect on what we do know for sure, and take a look at the questions that business owners should be asking.
The UK is no longer part of the EU, we left on January 31st 2020 with a deal known as the Withdrawal Agreement. HM Government are now in negotiation with representatives from the EU to settle certain issues such as immigration, trade relations and tariffs, borders and the UK’s financial settlement, among other matters. We are in the transition period, with January 1st the date set to sever ties with the EU.
We may all have our thoughts and opinions about the issue of Brexit and perhaps these have changed since the referendum in June 2016 (it seems like much longer ago?). As accountants however it is our job to look at the potential implications and advise our clients accordingly.
We began this brief article by saying that only the brave would make predictions, and we will stand by that statement. With the caveat ‘only the foolish fail to prepare’.
So what can you do as a business owner to prepare for Brexit? Here we ask three very simple questions that might have been overlooked.
1. Do you know your precise cash situation?
This is always important of course, but it’s particularly relevant right now. It might be necessary for you to access more cash and if this is the case, please consider your options to achieve this.
2. Will increased import duties impact on your costs?
It might be that while your company neither imports nor exports directly, your supply chain costs could increase. So perhaps it is time to consider your pricing structure using different scenarios.
3. Will your customers be impacted by Brexit?
Think about those that you sell to, the clients that buy your products or services and assess their risk as well as your own.
There are of course many more questions to be asked and answered. We are advising all of our clients to contact us with any specific queries or comments.
In a world of uncertainty, one thing remains constant ‘knowing your numbers is vital’.
Ask us, we can help.