Published: January 14th, 2021 in Finance News, Latest News
Brexit has been a hot topic of conversation for many over recent years, and rightly so, influencing the future of the United Kingdom.
Whether you voted to leave the EU, or strongly supported the remain campaign, as January 1st, 2021 arrived, it’s clear to see that moving forward, we in the UK have now departed the EU, causing anxiety for some and relief for others.
Logically, this change, which has been delayed for an entire year will impact the lives of all UK citizens, along with business deals, travel and our rights across the border.
Yet, the greatest focus is placed on the pressures and adaptations to our economy and our livelihoods, from small businesses to large conglomerates.
More than anything, confusion over what’s ahead, changes to regulations, potential disruptions to supply chains and complex adaptations to rules of origin are causing difficulties to the adjustments of Brexit.
Yet, as this is now our reality, it’s important that we, also a business, look at how the decision to leave the EU will impact our world and the position of our clients here at The Financial Management Centre.
Here’s our take on life after Brexit – What will change for businesses in 2021, covering common obstacles that many businesses will now face. While we’ve been provided with a year to prepare, change is hard to adjust to, especially for a well-formed supply chain.
If you’re struggling financially through life after Brexit, down to pressures or the need to adapt your offering, contact our team for financial support and guidance, specialising in business accountancy.
Details of Brexit
From January 2020, Brexit has been in place, where the time for the UK to leave the European Union has slowly paced forward. While official results have been in play for a whole year, a post-Brexit transition period was graced, offering time to prepare for impending major changes.
As January 2021 arrived, those changes have come into play with immediate effect, where our association with the EU has now separated.
Just under 52% of the UK population backed the decision to leave the EU, favouring the prospect of an independent nation.
Through ongoing deals, changes which are deemed practical have been set in stone, where EU legislations and arrangements now have little impact on our nation, outside of our tariff-free agreements.
Brexit has been activated with the aim to bring greater prosperity and success to our UK economy.
Yet, so far, for many businesses, it has influenced worry, change and major disruptions. Here’s what’s expected of life after Brexit – what will change for business in 2021?
Life after Brexit: What will change for businesses in 2021
For some niche sectors, Brexit will carry profound changes, making the ongoing processes linked to everyday business very hard to manage. Below are however some common changes, which are already set-in-stone for businesses in 2021.
Disruptions, delays and the necessity to change
As we’ve left the EU’s single market, it’s time to adapt. This may mean adapting your offering, your pricing, your focused customer demographic, your supply chain and even your investors. Ultimately, any previous association to the EU, prior to Brexit, will need to be rethought and changed to meet the legal and sustainable rules of the UK.
We’ve already seen major disruptions and delays when considering the importation of goods, which is set to continue, up until businesses work to adapt through the teething problems of Brexit.
While partnership and service can continue, we’re set to see significant change down to zero tariff and quotes, causing barriers for business deals, importation and exportation.
Customs and border changes
Down to leaving the EU, businesses who are either importing or exporting goods must now consider the regulations of the country that they are dealing with. Traders will now require a GB EORI number to secure the authorisation of moving goods to and from the UK.
As this change understandably has a significant impact on supply chains, a phased process will be followed, where customs checks will begin to arise, soon following a robust system.
Aviation and travel
Reasonably, a great change for the aviation and travel industries will have been forecasted for life after Brexit. Yet, in reality, changes have favoured the sector, where freedom to travel for both passengers and cargo has been given the go-ahead. However, rules have changed over travelling arrangements, where UK citizens can no longer travel between EU locations. A new UK certified passport must also be applied for once your EU passport has expired.
For some businesses, this will have a direct impact on their tangible offerings, along with the feasibility of ongoing physical presence in EU countries.
Rules of origin and VAT
Prior to Brexit, rules of origin remain neutral, where the payment of VAT was unnecessary. Yet, life after Brexit looks very different, where VAT will be payable on goods entering UK, placing greater financial responsibilities for businesses.
Down to this, exactly what will change for businesses in 2021 will fall around supply chain feasibility, and whether importing and exporting goods is in the best interest of business.
Legal frameworks
Life after Brexit in the UK will change dramatically for businesses as legal frameworks will become independent. Before the Brexit deal, a single legal framework bonded the UK and EU. However, down to leaving the EU, standards and regulations now fall in the responsibility of UK businesses.
New regulations will come into play, some industry-specific, which will outline the standard of products and their suitability for entering the UK. Those within pharmaceuticals, industrial and chemical industries are likely to be affected the most by changes to our new legal framework.
Automatic rights
One of the biggest changes for business in 2021, down to Brexit, focuses on our automatic rights in the UK. Many industries will lose their rights to trade and to routinely do business in the EU. In fact, many qualifications and certifications will lose their value, making life after Brexit difficult for some sectors and professions
EU regulations will need to be prioritised in all new business, with a significant focus on data protection and exportation.
Making life after Brexit, easier
Brexit may have turned your business upside down. Yet now is the time to rebuild, just like our nation, with the aim to benefit from Brexit.
The greatest way that life after Brexit can be eased is by complying to all rules and regulations, by keeping in the known, by maintaining a duty of care over standards and offerings, and by adapting where possible to promote business in the UK.
Understandably, this is a big ask for many businesses, which will cause many financial and legal issues. If you’re struggling with business forecasts or to balance the books down to significant changes in your costs or supply chain, we can assist at the financial Management Centre.
It’s likely for some time that we will feel in the dark around Brexit and what’s ahead for the UK. Yet, we will do our best to continue to provide support on life after Brexit – what will change for businesses in 2021, helping you keep in the know.
Sources:
https://www.euronews.com/2020/12/17/life-after-brexit-what-will-change-for-businesses-next-year-with-or-without-a-uk-eu-trade-
https://www.bbc.co.uk/news/politics/eu_referendum/results
www.sage.com/en-gb/blog/how-will-brexit-affect-businesses/
https://www.independent.co.uk/news/uk/politics/boris-johnson-brexit-food-supply-northern-ireland-b1786629.html
https://www.independent.co.uk/news/business/analysis-and-features/brexit-trade-deal-explained-uk-businesses-b1780548.html
