Brexit: What Next for Your Business?
After two years of negotiations, Theresa May’s Brexit deal was historically rejected by Parliament on 15th January. Despite narrowly escaping a subsequent vote of no confidence, the Government is now at a crossroads on the UK’s journey out of the EU.
Understandably, this has left a lot of business owners wondering what is next for them. What can they expect to change in the next few months and further down the line? In the post, we discuss the Government’s options going forward and how it will affect your company.
No deal Brexit
If nothing changes between now and the impending 29th March deadline, the default position will be no deal. But what exactly does this mean?
A no deal Brexit means the UK and the EU would not have a withdrawal agreement. There would be no transition period, so the UK would be removed from the single market and customs union overnight.
This means that UK would face EU external tariffs, causing the cost of everyday items to rise. Retailers and traders would also have to be prepared to register for VAT in countries they export to. These changes would have a wider administrative impact too, as manufacturers would need to consider how to avoid potential delays of goods coming across the border.
However, Chancellor Philip Hammond has recently tried to reassure businesses – suggesting a no deal Brexit would be taken off the table with things to become clearer in the upcoming weeks.
Renegotiating the deal
To avoid a no deal scenario, the Government needs to negotiate a new deal with the EU that Parliament will support. It’s likely that they will take a new direction with this deal, with a permanent customs union at the top of many MPs’ list of priorities. This would effectively move the UK towards a ‘soft’ Brexit, maintaining trade with the EU by adhering to existing EU customs.
This would be a major shift for Theresa May, who has highlighted an independent trade policy – excluding a customs union – as one of her ‘red lines’. However, for businesses that trade with the EU, it could be a big boost. They would be able to continue frictionless trade without a significant increase in tariffs.
Extending Article 50
Another possible outcome after May’s deal defeat is the extension of Article 50. This is essentially the deadline by which we have to leave the EU, which was triggered on 29th March 2017. This would require unanimous agreement from the European Council, which would be more likely if the UK can demonstrate a majority in the House of Commons for a new or amended deal.
If this extension was granted, it would give us more time with the status quo, effectively extending our EU membership. This means businesses would have more time to create contingency plans but wouldn’t bring an end to the current uncertainty.
One option which a lot of MPs and business leaders are calling for is a second referendum. This would give the British public another vote or ‘final say’ on our EU membership after seeing how the negotiations have unfolded. However, the Government has recently suggested this could take as long as a year to organise.
Should a second referendum show that the public has changed their mind, the European Court of Justice has already ruled that the UK can cancel Brexit. However, if the vote shows no change of opinion, the UK will have to continue negotiations.
Stay on top of things
In times of uncertainty, it’s important that businesses have contingency plans in place to prepare for all possible outcomes. That’s where UWM Accountants can help. We’re a friendly team of expert accountants in Leeds, with over 30 years’ experience. Covering everything from cash flow forecasting to compliance, our business planning services can help you prepare for the future, whatever it might hold.
Get in touch today to talk more about the future of your business.