The effects of Brexit

06/06/17 General

The next two years could be a worrying time for UK businesses following the vote to leave the European Union. Also throw in the changing of the guard in the White House and we are probably in for some interesting times ahead.

Many businesses of all kinds have reacted nervously following the vote. The Construction Intelligence Centre has significantly adjusted its forecasts for growth up to 2020 following the Brexit vote.

However, whilst the future might be uncertain, for the time being, UK businesses will be able to continue to do business as they have for the past forty years, trading with European partners and selling goods and services into the region.

SME businesses should use this time to consider and plan for change, as with change comes opportunity. With new opportunity potentially come new risks and as your broker we can access many specialists within our insurer panel, that can advise on what you may expect to
encounter if you seek an opportunity in a particular sector.

When you are ready, you know you have our support on your side.

Companies with exposure to the EU in terms of sales will potentially need to reconsider their investment strategies in terms of pace and scale until the UK’s future relationship with the EU is clear. This is especially true for companies that need to assess whether producing in the UK to sell into the EU makes economic sense should trade barriers be erected between the two.

There is also uncertainty surrounding changes to UK law and regulations following the exit from the EU. As much of EU legislation is embedded into UK law, not much change is likely. However, there are many grey areas where legislation has not been embedded, such as the UK’s opt-out on the working time regulations.

For the UK to maintain access to EU markets it will need to demonstrate that it continues to do business the way that the EU requires, therefore regulation is also unlikely to change wholesale. Whilst SMEs could look forward to some relief from EU employment legislation, they should not expect any kind of comprehensive roll-back of workers’ rights or industry regulations.

The free movement of labour across the EU has been in place for over forty years. Many UK businesses rely on large numbers of EU workers in their
workforce, both skilled and unskilled. SMEs need to consider the possible impact a restriction of the labour market could have on their business.

There are also many more risks that SMEs could face as a result of changes following Brexit, including possible supply chain issues, changes to taxation, accounting and business incorporation requirements.

During such a time of uncertainty, it is important that SMEs make sure they are aware of all the risks they are facing and are covered for every eventuality.

We can advise you on how to identify a manageable set of risks and opportunities, and help you evolve a plan for your business. So please get in contact with us to find out more.

Sources: Willis GB Marketing