Even businesses that do not import or export will feel the impacts of Brexit.
In the short-term, currency fluctuations are creating opportunities and risks for trade and supply chains.
Further ahead, customs duties, administrative approvals and compliance processes, rights of establishment and recognition of standards may change.
Government's intentions on trade
The UK and the EU have agreed a withdrawal agreement and much of the detail around a transition period. All that remains is the details of the UK’s future relationship with the EU.
The UK Government has stated its ambition to deliver a comprehensive free trade agreement with the EU. What this will look like and mean remains uncertain.
Organisations should plan with the understanding that the UK Government intends to:
- Leave the EU Single Market
- Leave the EU Customs Union.
Prepare for any Brexit eventuality
Assess the impact on your supply chain
While companies should understand their own interactions with the EU, it is equally important to be aware of your supply chain’s exposure.
Identify the risks and opportunities by considering:
- which customers and suppliers might be affected by short-term volatility?
- how will EU manufacturers review their supply chain and look at alternatives to UK suppliers?
- what are your intra and intercompany arrangements within and outside Europe?
Future-proof your supply chain
Mitigate against future risks by developing contingency plans and optimising customs compliance and supply chain structures.
Measure Customs Duty and VAT changes
Leaving the Single Market and Customs Union will have implications on goods and services crossing between the UK and EU. It will also impact trade outside the EU.
The UK currently enjoys access to more than 50 free trade agreements with countries around the world, negotiated by the EU – we may lose access to as a result of Brexit.
New Customs Duty and import VAT might be payable – not to mention the additional administrative cost arising from the need to process import and export declarations and instruct handling agents where necessary.
- review customs compliance processes
- understand the impact WTO duties would have on your business
- explore Authorised Economic Operator (AEO) accreditation options to enable goods to be cleared faster
Review your international growth strategy
With doubts over the UK’s existing trade agreements with the EU27 and third countries, you should consider how any changes will affect you by understanding how Brexit could change your access to current markets. Test and, where necessary, update your growth strategies.
Maximise short-term export growth
The depreciation in the pound combined with the continued full membership of the EU presents a unique opportunity for businesses to maximise their export growth during the negotiations.
Enter new markets
Government has already stated its eagerness to agree quick deals with China, Brazil, the Gulf States, Australia, New Zealand, India and the United States.
Businesses should think ahead by:
- exploring potential new markets - including those without an EU free trade agreements as changes are less likely (eg China and the US)
- utilising available support – including banks, professional advisors, trade bodies and government.