Brexit Action Plan

The vote is over and we have made the momentous decision to leave the EU.  Businesses and individuals need to consider the short and long-term implications.

We are of course in a period of uncertainty with extreme volatility in currency and stock markets and this is unlikely to change much until the terms of our exit become clearer.  Against that background, we all face some challenges. We have already heard of property and investment transactions having been cancelled or put on hold, and of medical research projects whose funding is now in doubt. Clearly there is a good deal of anxiety about proceeding with investment projects, although, paradoxically, the weakness of sterling can act as an incentive to overseas investors.

The most important thing to do is to think about the possible impact on you and your business.  It is too early to say – and the truth is that no one has a clue – what the business environment will look like once the dust has settled.  This may take many years whilst we negotiate our exit, decide what areas of our business life need change, e.g., regulation, laws, taxes, bureaucracy, etc., as well as trading relationships with the EU and with the rest of the world.

Here are some points to consider:

  1. To what extent are you exposed to the currency markets?  Do you buy or sell overseas and, if so, how will the fluctuations in sterling in the short and medium term affect you? Is there any action you may take (such as hedging) to lessen the blow. In particular, those who import are likely to have to be extremely careful about managing their currency exposure.  On the converse, exporters may have an opportunity to generate some additional profits.
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  2. Do you need to review your pricing particularly if you import?
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  3. If you are exposed to the property world, to what extent may a slow-down in the rate and/or value of transactions affect your business?
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  4. Those businesses that foresee a significant drop in turnover or rise in costs following Brexit may need to consider reviewing staff levels as well as upcoming pay reviews/bonuses to see where unnecessary costs may be saved.
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  5. Are you reliant on foreign labour?  Have you considered the possible impact if there were to be some form of restriction on such labour?
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  6. Is your business particularly affected by Environmental or Health and safety legislation emanating from Europe, or one that may be prone to tariffs?
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  7. If you are in the inward hospitality sector you may well find there is a boost to UK tourism but if you are exposed to the outbound sector, will a potential drop in business (because foreign holidays become more expensive) have an effect?
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  8. Were you reliant on/expecting any grants or subsidies from EU sources? Can you make alternative arrangements or at least put a contingency plan in place.
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  9. Will there be an effect on your pensions and investments?  As a general rule, one might take a longer-term view and not panic at the current extreme volatility in stock markets to which many investments are linked.  But perhaps a review of investment policy might seem sensible, particularly if you were planning to take pension benefits shortly, or to cash in investments.
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  10. Is now the time to consider incorporating your business into a limited company, particularly with the announcement of an intent to reduce further  the rate of Corporation Tax?

Get in touch with us to discuss how Brexit might affect you and how we can help you plan for it.