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How will Brexit affect my small business?

By January 23, 2019 No Comments

In just two months’ time, the UK will leave the European Union. Back in 2016, 51.89% of the British public voted to leave the EU. When the government triggered Article 50 in 2017, they started the clock for our departure from the EU.

Unless you’ve been living in a hole for the last three years, you’re probably sick of hearing about it. But if you’re running a business, you’ll probably be wondering how the whole thing will affect you.

Here are some of the main points:

When do we actually leave the EU?

The date for our departure from the EU is Friday, 29th March 2019. We won’t leave at midnight – we’ll actually leave at 11pm UK time. It’s possible the deadline could be pushed back, but that’s only if the EU’s leaders think there’s a chance we might end up staying in. If there is an extension, it would only be for a few months.

Will things instantly change when we leave?

Yes and no. When we leave the EU, we’ll enter the transition period. The transition period is intended to give the UK and the EU a chance to adapt to the new situation. It will begin on the 29th March and run until 31st December 2020.

During this period, free movement will still be in place. The UK will be able to negotiate new trade deals but they won’t actually come into force until 1st January 2021, when the transition period ends.

Again, the transition period could also be extended – although Theresa May has said she doesn’t want to rely on this. If it is extended, it’s likely to only be once and not an indefinite arrangement.

What deal has the UK made with the EU?

The withdrawal agreement between the UK and the EU is a 585-page document, so it’s not easy to summarise it in a few paragraphs. If you’ve got some time on your hands – and you’re used to reading legal documents – you can find the full document here.

However, if that’s not the case, the BBC has put together a handy guide which summarises the deal’s main points. You can also read a summary from the Guardian.

What businesses are most at risk?

Whatever industry you’re in, you should think carefully about what impact the changes will have on your business. But some businesses will be more at risk that others, particularly if you trade with or within the EU.

According to PwC, Brexit will affect all businesses but you’re likely to be most at risk if you:

  • Buy or sell large quantities of goods or services to or from the EU
  • Buy or sell goods or services to countries in the EU’s Free Trade Agreement (FTA)
  • Depend heavily on staff from the EU
  • Operate in a highly regulated industry (like financial or legal services)

What are the key points I should be aware of?

With a change in the legal and commercial landscape as broad as Brexit, there are numerous things you should look out for. But some of the most important things to be aware of are:

  • Costs of importing or exporting to or from the EU
  • Costs and availability of EU staff
  • Possible changes to market conditions in the lead up to and after the withdrawal

Further reading

A few years ago, we put together an infographic for how Brexit is likely to affect small businesses.

Has your business been affected already?

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