What laws will change after Brexit?
The EU (Withdrawal) Act (2018) aims to incorporate EU laws into UK law, so no laws will change significantly. However some aspects referring to the Court of Justice of the EU will no longer have jurisdiction in the UK.
Laws governing import and export duties and taxes such as VAT will have to change, because these previously allowed for free trade within the EU and reciprocal VAT arrangements. See more information on VAT and for advice on customs and tariffs.
Will I have to pay tariffs on goods coming in from the EU post Brexit and if so, how much?
Yes you probably will have to pay tariffs, unless we end up in a customs union, and there seems to be little political appetite for that at the moment. How much you will have to pay will depend upon the eventual agreement. But it is unlikely to be higher than the amount you are currently paying for importing similar goods from outside the EU. If you want to gauge your worst case scenario, look at the charges made to China – the tariffs they are charged tend to be the most punitive.
Am I going to need to register for VAT within an EU country?
Not necessarily, but you might want to. Among service suppliers who deal with European multinationals, we are seeing what is being called the ‘lifeboat situation’. These multinationals would rather not have to adjust their systems, so some service providers are setting up a subsidiary within the EU, which eases financial reporting. Speak to your Kingston Smith adviser for further details on whether this could be useful to your organisation.
Should I consider setting up a satellite operation to my business within an EU state?
Again, not necessarily, but you might want to. One factor that may influence your decision could be regulatory – you may need to be EU registered to move certain goods within the EU or to provide certain financial and insurance services. Another factor is funding – if your organisation receives EU funding, it may need an EU base to continue to qualify. Any decision to relocate or set up a satellite base needs to be carefully thought through. Having a seed customer in the location you choose always helps and there are myriad schemes for assistance in major European hubs. Your Kingston Smith adviser can help with connections, and also with tax and practical considerations.
As an employer, is it down to me or my EU employees to sort out EU settled status?
It is the responsibility of EU individuals to apply for settled status, but as an employer it is your responsibility to ascertain individuals’ right to work in the UK post Brexit. All wording on your contracts of employment needs to be altered to specify a right to work in the UK rather than in the EU. See our People section for more information on managing EU employees.
Will I have to continuously monitor the status of my staff?
Yes, ongoing ‘right to work’ checks should be carried out and evidenced on a regular basis.
If I discover an EU national is working for me illegally, can I dismiss him or her?
No you can’t. Under case law, an illegal immigrant still has the right to make a claim for unfair dismissal. Should you find yourself in this position, you will need to take professional advice. Kingston Smith’s legal and contract specialists can help you further.
What is going to be the position with working visa regulations going forward?
Visa regulations are being revised constantly and we anticipate that there will be changes in the next year enabling bilateral agreements between individual countries and the UK. These should help with freedom of movement and migration of labour.
How can I protect my business from losing money through currency fluctuations?
Most businesses have enough to think about, without becoming distracted by the currency markets. And if you are a small business, currency volatility could have a serious impact on your profit margins. We suggest that you assess your risk exposure, give yourself room for some manoeuvre and consider forward hedging to protect your forecasts. Speak to your Kingston Smith adviser for further details.
Should I have concerns about our working capital?
In a word: yes!
Tighter border restrictions may have a significant effect on working capital and cash conversion cycles, with consequential delays in import and export lead times. Significant currency volatility could also affect margins. Potential problems arising from supply chains and increased costs from tariffs and import duties will all impact on working capital.
With Brexit-related uncertainties ahead, it is important that businesses hold sufficient cash balances. Speak to your Kingston Smith adviser about how to manage and monitor your working capital.