Preparing for a no-deal Brexit
Despite a vote in the House of Commons which rejected leaving without a deal, it remains a possibility right up until a deal is struck. Here are some ways businesses can deal with the transition.
As the clock ticks down to the 29 March 2019, when the UK is scheduled to officially leave the EU at 11pm, there is still much uncertainty around what Brexit will mean for UK business.
Planning for it has been difficult for businesses of every size and sector, but for firms that buy and sell to the EU it's important to have contingency plans.
Almost half (43%) of the UK's exports are to the EU and generate £235 billion in export revenue, so the EU will remain an important trade partner.
Changing trade rules
If the UK should leave the EU without a deal, the expectation is that trade will immediately revert to World Trade Organisation (WTO) rules.
For another two weeks, goods moving between the EU and UK do not need to be checked at borders and have no tariffs imposed.
Under WTO rules goods would be subject to customs checks and tariffs, which could increase processing times at borders.
Relaxed rules for importers
The Government has said customs checks would be relaxed for businesses importing goods to the UK in the event of no-deal, but this does not guarantee the same for those exporting to the EU.
Importers will file a simplified online form up to two hours before a lorry is due to cross the English Channel by ferry, or one hour if arriving by Eurostar.
Importers will have to update the online entry within 24 hours to notify HMRC of the goods' arrival, with the duty payable up to a month later.
Manage your supply chain
Businesses that rely on EU imports - particularly those that operate on a just-in-time stock system
- will need to plan ahead.
Sourcing an alternative supplier within the UK, or from outside the EU, could help eliminate this issue, or you could look at alternative planning arrangements which might include building up stock lines that you know will be in demand and are imported from the EU.
Three in five UK businesses with suppliers in the EU are already reporting that currency fluctuations have increased their costs.
Sourcing within the UK could help protect your profitability as payments and invoices would be paid in one currency, reducing the risk of uncertainty.
If sourcing within the UK is not an option, paying your suppliers in their local currency can reduce currency volatility, while forward exchange contracts might allow you to lock in favourable exchange rates.
Know your target market
The UK is home to the third largest e-commerce market in the world and online giants, such as Amazon and Alibaba, are an easy way to reach new international customers.
Research from the Office for National Statistics in 2017 showed 54% of UK businesses had no website, and getting online is something any business should immediately take advantage of.