When it comes to Brexit, one thing is certain: there is still a great deal of ambiguity about the future state of trading relations between Britain and the EU.
Regardless of whether or not Britain’s departure from the EU will turn out to be positive for manufacturers and business in general – itself a hugely contentious issue – 2019 is set to herald some major changes in the way we do business.
The EU is currently one of Britain’s largest trading partners, and at present we enjoy trade without additional quotas or tariffs. However, with possible EU-imposed trade barriers and tariffs on UK goods and services looming on the horizon, manufacturing companies in particular would be wise to think strategically about the future, potentially drawing up detailed contingency plans to help them navigate an uncertain marketplace.
Major implications – and a possible solution
Following the referendum result in 2016, we have already witnessed a reduction in the value of sterling that has seen banks become more cautious about business lending, along with labour shortages that have hit farming and manufacturing companies the hardest.
If barriers to trade are imposed on Britain by the EU come 2019, this could result in more significant implications for companies that depend on exporting into the EU. Contracts with EU customers should be reviewed and highlight any risks to your business if there is a stipulation that goods need to be supplied from within the EU.
One solution to enable your business to supply goods from within the EU post Brexit is for you to consider setting up a branch or establishing a company within the EU.
There are clear advantages to this approach, as it is possible that British companies may lose key business privileges that are dependent upon their being located in an EU country. Additionally, the manufacturing sector in particular is heavily regulated, with a great deal of its original legal framework drawn up by the EU.
While we have already seen major companies including Barclays, EasyJet and Diageo establish a secure business base in the EU ahead of new trade regulations, it should be noted that relocating your company or setting up an EU-based branch is a possible solution that comes with its own set of issues.
Legal complexities, local accounting and taxation matters all need to be considered in detail, together with practicalities including the language barrier and ensuring you select the right EU location for your company. The cost of relocation is of course a significant consideration, along with arranging the requisite financing.
Well-placed to assist your EU plans
At Rickard Luckin we have a team of experienced business advisers and as a member of MGI Worldwide, we are part of a Top 20 international accounting network that brings together audit, tax and accounting expertise in over 300 global locations.
We are therefore well-placed not only to remain updated with the latest Brexit-related developments, but to recommend EU-based accountants who are best able to assist you in exploring the unique opportunities available to your business.
Whether you are in need of advice regarding a complex business issue, would like to develop full contingency plans or would simply like to discuss possible future options for your company, our approachable team are always happy to help. Contact us on 01245 254200 or email firstname.lastname@example.org