Six Months Since Brexit – Is the Dust Finally Settling?
It’s been over six months since the UK left the EU single market. We now know that many small (and not so small) exporting businesses in the UK have experienced multiple issues that have affected their businesses arising from new customs and vat treatments.
Operating an export business in the UK since Brexit has become a lot more challenging. It’s been widely reported that moving part or all of their business activities from Britain to the EU has been successful and that they are “benefitting from abundant skilled labour and the ability to continue to avail of the freedoms of movement of labour and goods within the EU’.
As a result of Brexit, additional challenges have come into play for UK businesses to continue their trading activities with their old EU customers. Many owners have experienced severe delays in the shipping of goods into Europe, due to changes in customs and export documentation as a result of being a third country and in addition, resulting higher processing costs to continue supplying their European customers. Several UK clients have restricted their trading initially with their EU customers as their profit margins have diminished or have been reduced significantly or eliminated entirely.
Other UK clients have sought advice from us on the requirement involved in setting up an additional EU location for their business in Ireland, in order to remain within the EU trading block as they had before December 2020 and so effectively ‘turning back the clock’. In this way they can also avail of deferred Vat accounting on bringing goods into the EU and no potential for double duty costs on moving goods via the UK.
Meanwhile other clients have approached us to seek our advice to establish an Irish subsidiary company (of their UK parent company) that allows them to continue to effectively service their European client base by conducting operations from Ireland and remain as an EU trading entity.
The solution remaining inside the single market in this way benefits those businesses with a more extensive client base as it allows the company to transfer goods in bulk, avoiding customs processing costs and delays on individual items that have otherwise resulted in higher costs and lower profit margins and potentially defer the VAT cash flow cost of bringing goods into the EU until ultimately sold on.
The Financial Times did a recent survey which found that of those UK based companies that continue to trade within the EU, over a third of businesses have experienced significant negative impacts on their exports to EU customers.
Now that the dust is settling somewhat, if you are an advisor to affected clients, or are a business owner, whose business has been impacted since Brexit, we at Roberts Nathan are here to provide any help and assistance you may require. We have already helped many UK businesses in this evolving situation.
If you would like to explore further options around your business, please contact Peter Roberts or Tomas O’Leary in our Cork office or Aidan Scollard in our Dublin office who would be delighted to assist you.
Peter Roberts: email@example.com or
Tomas O’Leary: firstname.lastname@example.org
Aidan Scollard: email@example.com
+353 86 2523 026