Brexit Strategy: Walking out the door
At the earliest the UK may leave the EU in two years, with the new Chancellor of the Exchequer, Philip Hammond, predicting up to six. There is time to get ready, but how can it best be spent to ease the transition period? This blog looks ahead to what business leaders should consider in the first two years following the vote.
When it comes to the final step of leaving the EU, different sectors, industries and sizes of business will all be affected differently, but as our current legislative framework is derived from EU regulations, changes of some sort will be felt across the board.
While one of the arguments for leaving the EU was getting rid of unnecessary red tape, in the short-term it will create considerable administration and legislative reviews for small business owners. It is far from the most exciting aspect of running a small firm, but staying on the right side of legislation is vital.
It’s worth checking your legal protection as a business – making sure your contracts cover you both with clients and suppliers, and that there is nothing that will make them invalid.
Until negotiations are complete in a few years time, the UK will continue to be governed by EU legislation and directives. Many of our employment law rights were influenced or implemented by the EU, from holiday entitlement and working time, to rights for women and anti-discrimination legislation, and it is unlikely they will just disappear the moment we leave. That’s not to say it will be business as usual, and small firms need to be prepared.
I’ve worked with small businesses both personally and professionally for many years, and I know that they put their employees above all else (after all, your people are your business) and may be wondering how they can safeguard their future within the company. With this in mind, I’ve summarised some of the key areas of your business that it would be worth reviewing as we prepare for E-day.
Anti-discrimination regulations and fair working conditions have been a mainstay for UK businesses for some years, and will almost definitely remain unchanged. Something that will affect all businesses however is the workforce, and what will happen to EU workers. This can be particularly sensitive in a small business which may have few employees.
However, if certain legislation is stripped away, it doesn’t mean startups have to remove it from their own conditions. Consider reviewing which protections and benefits are crucial to you and your staff, and which you might keep even if they are no longer statutory outside the EU. It’s worth thinking how your decisions will impact things like staff retention, loyalty and productivity. This could be a chance to compete for talent as companies that offer great benefits over statutory duties can attract great employees.
Funding is another area that may be of concern for some small companies. While the EU has special funding programmes operated by the European Investment bank (EIB) that will no longer be available once we have left the EU, that’s not to say the UK government won’t implement alternative schemes designed to support small business.
Small companies are known for their tenacity and flexibility, and Brexit could provide the opportunity to cement their position at the heart of the UK economy.
Big business and supply chain
As a small business, the chances are that you will have some involvement with big business during the first year, whether through trade or supply. With certain large businesses currently debating whether to move operations to the continent, it is worth thinking how this may affect your business.
Supply chains are another vital element to review, as depending on each company’s individual needs and supply chains, these may spread across the EU. Small firms may benefit from thinking about how the performance and validity of contracts may be affected by leaving the single market, and whether the possible imposition of taxes and tariffs may make certain deals costly. This is particularly pertinent if your business relies heavily on trade with the EU.
To find out how KPMG Small Business Accounting could help free up your time so you can concentrate on business success, request a callback for a quote today.
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