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No deal? The latest Brexit news for small business
Small businesses have more than enough on their plate as a result of coronavirus - especially with financial support measures like the furlough scheme coming to an end soon. But unfortunately, the dreaded 'b-word' is back on our news feeds - and it simply can't be ignored.
The UK government is currently attempting to negotiate a post-Brexit trade deal with the EU. Here, we look briefly at how likely a deal is, and what small firms should focus on when making preparations.
Deal or no deal?
The first and most important question to answer is whether a deal is actually likely.
The UK government, and at times their EU counterparts, have made threats of walking away from negotiations - increasing the sense that a no deal scenario is becoming more likely.
However, negotiations haven't stopped, and beyond the gamesmanship and bluster, it seems clear that both sides are determined to walk away with a deal of some sort. And broadly speaking, most experts think a deal of some description is likely.
It's also widely hoped that a deal is agreed, because most small businesses simply aren't prepared for a no deal scenario. Covid-19 has exacerbated the problems small businesses were already facing, and understandably almost no focus has been devoted to those preparations. Essentially, small businesses are putting out fires - and Covid-19 is currently the bigger fire.
What should small businesses be doing to prepare?
The potential consequences of whatever deal the UK gets, or no deal at all, are complex and to some extent unknown.
However, it's fair to say that the most immediate and direct impact will be felt by businesses who import from or export to the EU, or have EU citizens working for them.
There's so much to consider and effectively so little time to prepare, but as a minimum, small businesses should:
- Obtain an Economic Operations Registration and Identification (EORI) number if you move goods into or out of the EU. From January 2021 this will be essential
- Examine and communicate with your supply chain partners. What are they doing to prepare? What delays are expected, and how will they mitigate them?
- Check to see if your EU employees have 'settled status' within the UK. If not, you'll need to help them obtain it
- Watch carefully for changes in data regulations. All business data in the UK is currently regulated by EU law, and this will of course change. The UK government wants to keep disruption to a minimum, but changes are likely
- Look to build trade outside the EU. There are likely to be barriers and complications, at least in the short term, so having markets outside the EU will help you enormously
More fundamentally, as difficult as it is, it's vital that you have some finance in reserve, to protect you from potential stock problems or trading delays. Speak to your bank about a temporary loan in relation to Brexit.
And whatever you choose to do, try to give Brexit some attention. It might not feel as pressing as Covid-19, but for some businesses its impact will be more significant.