How will Brexit affect my business?
In this short video Alan Davis, VAT Partner here at Henderson Loggie, discusses the implications of a hard and a soft Brexit and what that could mean for your business.
Covered in this video:
► The difference between a hard and a soft Brexit
► Brexit planning
► Cross border trading
If you have any questions, please drop them into the comments section or contact Alan directly at firstname.lastname@example.org
What’s the difference between a hard and a soft Brexit?
For businesses that are trading cross border with the EU there are two ways to look at the Brexit challenge. For a hard Brexit, it’s more likely to be a situation where goods will stop at the border at ports or airports and be processed by HM Revenue & Customs and any tax and duties paid at that point.
For a softer Brexit, it is more likely to be as it is just now with tax and duties collected off site away from the dock or the airport.
What you have then got to consider is, “What should we be thinking about now in terms of, do we need to change or think about changing processes so that we are ready for either eventuality?” As there is no certainty yet, you could go down either path a fair distance before a decision is made. But it’s important to be aware of what the implications are at this stage and to start thinking about what they might be. If there is anything you can do ahead of time, start thinking about that now.
Importing & Exporting
For businesses that are importing into the UK, if the hard Brexit option is followed then any goods that are being brought in from the EU will be subject to VAT and duty at the dock. This could create a bit of a cashflow issue for importers who will have to pay for that VAT upfront. In addition, sometimes there is a need to provide a guarantee to HM Revenue & Customs when you are importing goods, so you may have to speak to your bank to ensure that you have got the facility to provide that guarantee.
If you are importing and exporting, it’s important to understand the mix of sales and purchases that you have. If most of your sales are to the EU or purchases from the EU, you will know that it is an important part of your business and it would be worth considering, for example “Are we going to continue in that way or will the business change? Will we start using other suppliers because Europe is a challenge?”
As we all know, 29th March 2019 is the date that Brexit takes effect. There is expected to be an agreement that there will be a period of around two years for practical changes to happen and for change to kick in.
Whilst that could lead to a three-year time lag, it’s also possible that it may be almost a year to go. So, it’s important that you are focusing on the impact importing and exporting has on your business and what implications there may be for you.
As a firm, Henderson Loggie will be monitoring the Brexit negotiations. As the VAT and duty implications of that split become clear, we will be sharing that information to ensure that you are as well prepared as you can be for this significant change.
While there may be no immediate changes in cross border trading, you may be concerned about transactions that you are making in the short or medium term that may be impacted by Brexit and you may have questions about how that will impact your business going forward.
Any questions about Brexit?
You should, of course, be taking professional advice on that as always, particularly if the numbers are big and we would always recommend that’s a good thing to do.
If you have any questions about the implications of Brexit on your business, feel free to contact me directly at email@example.com.
The information is this video is of a general nature and seeks to highlight some of the issues which could be affecting you and/or your business, including changes to financial regulation and legislation. Viewers should not rely on this information without seeking professional advice on its application in their circumstances.