The 31 January 2020 remains set as the planned date for Brexit. While the route the UK will take is still unknown, it is clear that change is coming for companies and there is an essential need for them to understand how Brexit will affect business.
What is the current status of Brexit?
Following the outcome of the general election, plans are moving forward towards the planned Brexit date of 31 January 2020. This could still be in the form of an agreed deal with the EU, subject to approval by Parliament, but the default position is still that the UK will leave without a deal. The UK will then enter into a transition period that is due to end on 31 December 2020.
Whatever the future holds, it's important for businesses to remain agile amid this uncertainty and prepare as best they can for Brexit, and the alternative scenarios.
What industries will be affected by Brexit?
Every industry will be affected by Brexit due to the potential economic impacts (reduced investment and recession) and manpower issues (migrated workforces and skilled worker shortages). Some industries will be affected more than others such as financial services but it is the businesses that trade internationally that stand to be most affected by Brexit, regardless of the sector that they operate in. Businesses with continental European suppliers or customers will be impacted, while trade with non-EU countries will be affected by losing access to the EU's current free trade arrangements and any customs blockages.
What key issues does Brexit cause for businesses?
How Brexit will affect business will be different across the board. Every organisation will face different challenges when it comes to the UK leaving the EU, but there are some key challenges that we all need to be aware of and prepare for. Our experts have compiled Brexit Bitesize guides to support businesses through this uncertain time.
- Supply chain - Brexit brings a real risk of increased costs and delay to supply chains. We outline the eleven actions to take now to reduce the impact of cost hikes and delays - and answer the most common Brexit supply chain questions.
- Customs/border tariffs - It's crucial for importers and exporters to understand the potential customs implications for their businesses - whatever the outcome from this date.
- Workforce - While much of British employment law derives from Europe, some areas are purely UK provisions. So to what extent would existing laws be affected by Brexit and what wider implications might we expect? We address some of the initial issues businesses will need to consider and look at how best to be prepared.
- Regulation - To what extent Brexit will affect current regulation will vary from sector to sector, but the impact is potentially enormous. In many areas, the UK largely works to European-wide standards and it is likely that UK regulation will continue to comply with those standards (but with no ability to shape the policy behind them). However, there will be difficult transitional adjustment issues where the UK opts to diverge. We consider the potential scenarios, what barriers these might create to trade and how to prepare for possible changes.
- Economic issues - Whether we have a Brexit deal or a 'no deal' Brexit, one thing we know for sure is that it will affect all parts of the economy, and every sector in which the UK operates. We look at some frequently asked questions regarding Brexit and the economy.
As the UK's journey to leave the EU unfolds, it is easy to get caught up in the jargon and lose understanding of the events taking place. If you are a business leader involved in planning, it is essential that you take the time to understand what the key terminology means and how Brexit could affect your business.
What is a withdrawal agreement?
The Brexit withdrawal agreement sets out how the UK will leave the EU. As well as proposing how Brexit will be implemented, the agreement outlines what the future relationship between the UK and the EU will look like.
What does no deal mean?
A no deal Brexit would result in the UK leaving with no withdrawal agreement in place regarding its relationship with the EU in the future. If a no deal Brexit occurs it could result in outcomes such as trade being severely affected and border checks being re-introduced.
What is a transition period?
The transition period will form part of the withdrawal agreement if the UK leaves the EU with a deal in place. It refers to a specified period time after the UK's withdrawal before the permanent arrangements for the relations between the UK and the EU are implemented. If there is a transition period it should allow time for businesses to prepare for new regulations.
What opportunities could leaving the EU offer to UK businesses?
Brexit is frequently seen as only a risk or negative event yet there will be new opportunities for those that wish to capitalise on them. The volatility of currency will favour some businesses and new trading relationships will be explored. Depending on the UK's relationship with the EU, our domestic laws in various sectors may change in either form or substance, enabling businesses to have the opportunity to influence government in shaping future regulation.
What are the legal implications of Brexit?
As the UK breaks away from the EU, there will be the challenge of untangling its regulatory framework for government and parliament. Brexit will affect businesses immediately by changing how the law is approached. The process will include transforming applicable EU law into UK law and courts will need to consider whether they use decisions previously made in the European Court of Justice as points of reference.
The changes to the UK's legal framework will causes headaches for organisations as they attempt to navigate how the changes will affect their operations including their contracts and employees. It is vital that decision makers have access to expertise in the applicable areas to ensure that they are managing risks appropriately and are aware of any potential opportunities.