On 29 March 2017 51.9% of the UK decided to leave the EU. At that time nobody really knew what form Brexit would take and it is still unclear. To date there does not appear to be any real consideration given to various legislative changes that the UK will have to implement in order to effect a clean exit, nor in relation to the impact that this may have on various UK businesses when they lose the protection of the EU “Cross Border” arrangements that make the transfer of business and people between the EU member states straightforward.
However, it is still important for businesses to start preparing as soon as possible for all outcomes. Set out below a brief summary of considerations for Irish businesses and a timeline to date;
Where can you start?
- Brexit could mean increased competition from the UK and other markets. With this in mind it is important to identify areas in your business where you can reduce costs and improve efficiencies.
- The exchange rate is and will be one of the most obvious effects of Brexit. If sterling drops this will impact Irish exporter’s bottom line. To prepare for this companies should look at their break-even exchange rate and begin sourcing new suppliers in other EU countries should they be required.
- If your supply chain has a high percentage of produce made or shipped via the UK it is important to understand that now and meet with all suppliers to assess the potential tariffs and costs on your goods. This is when you will have to look at your contacts with your buyers and suppliers. It will be important to determine who will be responsible for customs obligations and the payment of customs duties.
- Should the UK economy decline as a result of Brexit there may be less demand for Irish companies, goods and services. It could also mean there is less incentive for the UK to buy Irish products as ‘British-made’ goods will be promoted. If you feel your company is over reliant on the UK market now is the time to start exploring other markets you can diversify into.
- Business based in the UK who provide investment management services to clients in the EU need to look to obtain Central Bank authorisation as an EU-27 regulated investment firm in Ireland. Such steps need to be taken to enable UK businesses to continue working within the EU after Brexit.
- Employment rights of your staff are key, Brexit means a potential change on the employment rights and mobility of staff. Take stock of your employees and get advice of any changes in the law as soon as it is known. Also keep in mind immigration as this is an area that is becoming clearer. The UK has outlined details of its settlement and temporary residence scheme. Registration for UK citizen will be one big change for employers. All systems and immigrations policies will need to be updated. Communication with your employees will be of the upmost importance.