Accountancy advice more popular than ever as businesses face uncertainty from leaving the EU. Is your accountancy firm in connection with these businesses?
Brexit – whether you voted in or out, the effect on the UK economy is creating a level of fear and uncertainty among businesses. This has led to a surge in businesses seeking accountancy advice.
According to a report submitted by the Global Counsel “the impact of Brexit through the trade and investment channels would be most severe in the UK”.
What does this mean for UK businesses? The degree of impact is still largely unknown at this stage. It would also be dependent on the Brexit model that is rolled out. But speculation is that it could cause an increase to Regulatory Divergence which would impact on trade volumes, making the UK less appealing for investment opportunity.
The Effects of Brexit on Customs Duty
Customs duty would also be affected. Brexit will result in withdrawal from the EU’s Customs Union, making EU Custom Duties applicable to imports from the UK into the EU. This would make it more difficult for the UK to trade with EU countries and consumers.
And it could be bad news for UK businesses relying on the import of raw materials from the EU. Brexit may result in the extension of the UK Customs Duty Tariff, making it much more-costly for businesses to import the materials they need.
These issues with customs duty have already resulted in businesses seeking accountancy advice on management accounts as business profits are threatened.
The Effects of Brexit on VAT
VAT will be another issue. Brexit would give the UK the right to abolish the VAT system but it’s an unlikely possibility.
The biggest impact to businesses here will be related to trade between the UK and EU.
VAT on EU goods would no longer be accounted for on VAT returns. Businesses would have to wait for customs payments to be made before they can recover the VAT. This would have a significant impact on business cash flow for businesses that rely on EU trade.
That’s not the only tax to be affected either. Corporate tax would also suffer. As part of the EU, the UK has had the EU Parent-Subsidiary Directive to help prevent the withholding of tax on dividends.
After Brexit this would no longer be a salvation. Leaving the EU could lead to an increase in the withholding of tax for businesses, affective their cash flow.
So What Now?
Whilst it may take 2 years for the Brexit terms to be negotiated and the model decided, businesses are already considering the financial risk to their businesses and are including this in their annual accounts.
Get in Touch with Whitefish Marketing in Folkestone
Is your accountancy firm seeing an uplift in businesses seeking accountancy advice as a result of Brexit? If not, maybe we can help to connect you? Please get in touch with our friendly team here at Whitefish Marketing in Kent.