Posted: 11/05/17 by Grant Thornton UK LLP
March 2019, when negotiations are due to end and the UK could officially leave the EU, may seem a long way off, but those businesses who do not prepare for the impact of Brexit now could find themselves on the back foot, says the Milton Keynes office of financial and business advisers Grant Thornton UK LLP.
Since the EU referendum last June many companies have felt little effect beyond a substantially weaker pound. However, it’s vital that Milton Keynes companies are not lulled into a false sense of security and use the two-year negotiation period ahead to future-proof their business.
Mike Hughes, at Grant Thornton’s Milton Keynes office, comments: “It’s been almost a year since the Brexit vote and despite uncertainty over the future, the economy has generally held firm with many companies taking a ‘business as usual’ approach.
“At this stage, what shape the UK’s relationship with Europe will take beyond March 2019 is unknown, making it difficult to plan ahead. But businesses need to prepare for the various scenarios which could arise to ensure they are agile enough to adapt to change as it unfolds.”
The impact of Brexit will be different for every organisation, but there are a number of common areas that businesses should review to help protect them through the transition period and beyond. Grant Thornton Milton Keynes offers the following advice:
- Understand your company’s touchpoints with the EU – people, goods, services, financing, regulation – and exactly how changes could affect operations and financial performance.
- Explore new business models, markets and ways to source labour/develop existing employees to minimise inefficiencies now.
- How will currency fluctuations and potential changes to customs duties, administrative approvals, compliance processes and standards affect your business?
- Review supply chains, identify which customers and suppliers might be affected and ensure contingency plans are in place.
- Test, and where necessary, update growth strategies. Depreciation of the pound combined with continued membership of the EU provides a unique opportunity to maximise export growth over the next two years.
- Explore new markets. First movers will have an advantage so think ahead.
Shaping the workforce
- Update workforce plans considering the scenario of reduced access to EU workers.
- Review employee remuneration packages with a focus on non-cash benefits to remain attractive to international talent and minimise skills shortages.
- Consider the Apprenticeship Levy as a low-cost opportunity to upskill your workforce and help resolve skills shortages.
- Clear leadership is vital in uncertain times.
Adapting to change
- Take a board-level assessment of the potential financial risks and opportunities presented by Brexit and how these will be managed.
- Communicate these clearly to maintain stakeholders’ confidence.
- Consider how operating models may change as Brexit unfolds, what are the tax implications and will administrative burdens alter?
Mike concludes: “The bottom line is businesses need to take a heads-up approach. Keep up to date with industry advancements and seek professional advice where needed. Those companies which aren’t prepared will struggle to capitalise on the opportunities presented.”