Remember Brexit? If it’s been pushed down your order of priorities in the light of the global pandemic, you’re not alone. In a recent poll of 500 UK business leaders, only a third said that adapting their business for Brexit was now an immediate concern, with the current second wave of COVID-19 seen as a far greater commercial risk, forcing them to focus instead on problems such as loan payments and redundancies. The UK government however is urging businesses not to take their eye off the Brexit ball, with the split from the EU confirmed as going ahead on January 1st 2021. When the current transition period ends on December 31st, finance teams will be facing changes on multiple fronts, particularly if the no-deal Brexit scenario plays out. From customs declarations to supply chains, complex new compliance and everchanging regulations, the workload will be significant, so why aren’t more organisations preparing now, given the clock is ticking?
The simple answer is, because they can’t prepare effectively. The coronavirus pandemic has created uncertainty in almost all areas of life and business worldwide, and Brexit too has been affected. Firstly, in terms of the deal or no-deal negotiations, these have moved online just as the rest of us are working from home, which has slowed progress almost to a halt. At the same time, businesses that had formed working committees to prepare for the various Brexit scenarios have seen members either furloughed or pivoting onto disaster committees related to the pandemic. Survival mode for some organisations has also seen them change their supply chains to deal with new countries, which could also put any Brexit plans back to square one.
Furthermore, the global economic decline in itself creates additional concerns pertinent to finance teams and tax professionals, particularly if something like VAT changes. VAT revenues for the government are so large that any minor increase would make an enormous difference in terms of raising funds quickly. They could also reconsider income tax or social security contributions, but as with everything else it’s all dependent on a deal that may or may not be done. So, what can companies physically do now to best prepare themselves for the end of 2020 when no one knows where we will be with Brexit or the virus?
Embracing technology that will improve operations and decision-making could be a smart move. AI, whether implemented for inventory challenges, supply chain efficiency or cash management, will not only give an organisation a competitive edge, but also increase their agility to be able to respond to overnight changes at the turn of the year. If there are changes to taxation, not only will teams need to adapt to ensure compliance, but there could be opportunities that arise that could be maximised. Rather than wait and see, the next few weeks should be monitor and react. Those who do should not only survive but come out on top.
Have your Brexit preparations been set back by the pandemic or is your team ready? If you’re adapting your team in readiness and need help, contact us today.
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