UK businesses, please do not waste this time.
James Stewart, Head of Brexit at KPMG UK said:
“We may have a new Prime Minister, but businesses are still none the wiser on Brexit with less than a 100 days to go until 31 October..
“We certainly haven’t seen the same level of intensity from clients on Brexit preparations as we did ahead of the original 31 March deadline. Many businesses are now better informed about the risks of a no-deal, but more worrying are those that haven’t done enough either through Brexit fatigue, a ‘mañana’ mentality or by simply being unaware. More worrying still is that those who haven’t done enough will impact those in the supply chain who rely on them.
“Of course, it is hard to plan for the unknown unknowns. Nobody really knows how long our ports will experience disruption; how many flights will run on time or whether goods will be stuck in traffic jams; or how the pound sterling will be impacted by all of these unprecedented events. However one thing that everyone now seems to agree, whichever side of the Brexit divide that they sit, is that no deal will result in a significant short term economic downturn.
“But investors will punish businesses who blame Brexit for underperformance when their competitors are resilient or even emerging stronger. Whilst some pieces of the jigsaw are out of their hands, there’s still a lot that can be done to use the time wisely.
“This means thinking about the basics, such as currency hedges, working capital, staffing levels and inventory. Talking to your bank, your suppliers or even understanding how your customers will behave.
“Having the right paperwork in the event of a no-deal is also important. This includes registering for a trading code (EORI number) to prevent goods not being cleared for import and export. Or taking advantage of importing goods from the EU without paying any import duties for a month and using simplified procedures (TSP, deferment account). Both processes are relatively straightforward and quick to register but businesses just need to get on and do it.
“Brexit preparation will be a competitive differentiator. Those who have failed to prepare will find it harder to attract investor support, recruit staff, find the right warehousing or meet customer expectations over the long term.”
© 2020 KPMG LLP a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the KPMG global organisation please visit https://home.kpmg/governance.