Brexit FAQs for small business owners

Jennifer Robson, founder of Routes and Branches and an adviser for Enterprise Nation's Brexit Advice Service, answers some of the most frequently asked questions asked by small business owners.

How will Brexit affect my business?

This is by far the most frequently asked question.  The answer involves me specifically looking at your individual business and its supply chains and distribution channels.  However in this post I will answer many of the questions that should be considered when analysing the impact upon your specific business so this should give you a good starting point.

What's happening to the EU (Withdrawal) Bill in Parliament?

The Bill is now an Act of Parliament - the European Union (Withdrawal) Act 2018 (c.16). It received Royal Assent on 26 June 2018, following a To and Fro Stage between the House of Lords and the House of Commons during which a series of political compromises were debated.

The Scottish Parliament refused to pass a Legislative Consent Motion for the EU (Withdrawal) Bill. As a matter of law, that does not affect the validity of the Act in relation to Scotland or otherwise.

What other legislation will be required?

Around eight Bills are expected.  However, almost all domestic-policy Bills over the next few years are likely to have some Brexit component.

What legislation has being introduced so far?

A Trade Bill which 'provides key measures that are required to build a future trade policy for the UK once we leave the EU';

A Taxation (Cross-border Trade) Bill which will allow the UK 'to legislate for a new customs regime to be in place by March 2019'.

There will also be a range of subordinate legislation dealing with aspects of the Brexit process under the EU (Withdrawal) Act 2018, under the other Brexit-related Bills, and probably under many domestic-policy Acts too. The Government have suggested that something in the region of 1,000 additional statutory instruments can be expected. It is expected that the flow of instruments will begin before the summer recess of Parliament.

Is there going to be a second UK referendum on Brexit?

The Government's present position is that there will be no second referendum on Brexit and that the next opportunity for UK citizens to express their collective opinion about the progress of the negotiations will be the next Parliamentary general election

How hard might a hard Brexit be?

Brexit could be extremely hard.  There is still a possibility that when the UK ceases to be a member of the EU automatically in 2019 that there will simply be no terms of agreement on any matter between the UK and the EU.

This is worst-case scenario and something the government and civil servants on both sides are working to avoid but it is still possible.  Should this happen it would have far reaching legal and political ramifications for years to come and every sector of business would be effected.

The government have issues a series of technical papers indicating the likely effects of leaving the EU without a legal framework to govern future trade and cooperation between the UK and the EU.

The technical papers give some guidance to stakeholders about how the Government intends to implement regulatory arrangements governing goods like medicines and services like mobile phone use and data roaming.

The UK will legislate to allow EU-based manufacturers and service-providers to continue to access the UK.  It is uncertain whether or not EU 27 will reciprocate.  Which will significantly affect UK businesses.

How soft might a soft Brexit be?

The reverse is of course that we could have a very soft Brexit in that the agreement between the UK and the EU on their relationship after Brexit will include so many components of legal, political and economic standardisation that life after Brexit will be indistinguishable for most practical purposes from life before Brexit.

What's the latest timetable for Brexit?

The only fixed point of the process remains 29 March 2019, at which point the two-year negotiation period that began when the Article 50 notice was served comes to an end.

How will the UK do international business after Brexit?

Depending on how 'hard' or 'soft' Brexit turns out to be, the UK may have to have recourse to World Trade Organisation (WTO) rules for its business with the EU.

Trade with non EU countries

For trade with non-EU countries, the UK will lose its trading status as part of the EU bloc and will therefore trade either on WTO terms or in accordance with individual trade treaties negotiated between the UK and other countries.

Where does Brexit leave the Commonwealth?

The Commonwealth has no legal or constitutional relationship with the EU. Brexit therefore has no formal impact on the Commonwealth.

Depending on the nature of the trade relationship between the EU and the UK after Brexit, however, there may be opportunities for enhanced trading relationships between Commonwealth countries and the UK.

What is the likely economic impact of Brexit?

Most forecasts suggest that Britain will be a poorer country after Brexit, largely because trading with the European Union will become more difficult.

More than 100,000 British businesses export goods to the EU each year. At present they enjoy tariff-free trade with the country's biggest export market. But all face uncertainty as Britain negotiates a new trading relationship with Brussels.

What are the pros and cons of WTO rules?

WTO rules have their flaws. For example, they allow exporting countries to provide financial support and subsidies to specific industries; but they also give importing countries the right to use tariffs to offset these subsidies.

What other multinational forums could the UK engage in?

The Trans-Pacific Partnership, a regional trade agreement that provides for duty-free trade.  It includes modest commitments in areas like state aid and competition policy, without requiring EU-level integration.

What can I do to prepare my business for Brexit?

• Be proactive.

• Conduct a business audit.

• Communicate with your suppliers and assess their Brexit readiness. How does your supply chain integrate with the common market and the EU?

• Communicate with your distributors and assess their Brexit readiness.

• Update your business plan.

• Conduct scenario planning exercises such as what would the impact on your business be if your product took one, two, three, days to clear customs or what impact would having to complete six forms instead of one have on your business?  Start to determine at what point your business model becomes no longer viable.

• Consider the knock on effect. Even if you are not directly affected by Brexit, what impact will it have on your suppliers and their suppliers? This is a good time to identify, form relationships with and test alternative suppliers.

• Cut controllable costs.

• Keep your overheads to a minimum and build up a reserve fund to help cushion your business through the Brexit uncertainties.

• Review the skills of your staff and identify training opportunities and skills shortages.

• Carry out an audit on the immigration status of your workers to identify who may be caught by any new immigration controls.

Remember that you can book a free 30 minute call with me to discuss your business and the impact of Brexit.

Brexit Advice Service

Access content, events, advice and more to help you plan for the challenges and opportunities from Brexit with Enterprise Nation's Brexit Advice Service.