Do you understand the risks and costs of a hard Brexit to your business? What’s your contingency plan?
The Brexit clock is ticking.
Almost three years after the UK’s notification of its intention to leave the EU under Article 50 TEU and the UK’s political promise to leave the EU, yesterday’s election outcome strengthened the position on whether and how the UK will leave the EU on 31 January 2020, the current default Brexit date.
The results strengthened Boris Johnson’s position, with the Tories winning 364 of the 650 seats in the House of Commons, giving the party a comfortable majority over the Labour party led by Jeremy Corbyn, which obtained only 203 seats in the House of Commons. The expectation is that this clear majority will give Prime Minister Johnson the political strength to pull the UK out of the EU on 31 January.
The Conservative campaign has clearly been about “getting Brexit done.” The Conservative majority is a clear mandate for the PM to complete the hurdle of getting the deal agreed by Parliament. However, this is just the beginning of the divorce between the UK and the EU. After Parliamentary approval, the UK will enter a transition period until the end of 2020, which gives little time to negotiate the future relationship with the EU, as trade agreements with the EU typically take years to complete.
Although an extension of the transition period by one or two years is possible, London must request this extension by the end of June 2020. If a trade deal is not struck before the end of 2020, the EU and the UK will be trading under WTO terms. This scenario means that businesses will need to continue investing in no-deal planning.
Although the outcome of the UK elections makes an orderly Brexit on 31 January 2020 more likely, it is nevertheless advisable for businesses to continue preparing for a no-deal Brexit. The current Brexit date not only remains the default exit date but Brexit means that the UK will become a third country, with or without an organized transition period. Furthermore, as it would be unusual for the future relationship between the EU and the UK to be finalized within any transition period, the impact of a no deal Brexit should be understood, mapped and prepared for.
Therefore, it is essential for your business to first understand the risks and costs of a no-deal Brexit and, second, develop a contingency plan for all impacted areas. PwC Legal can assist.
An in-house workshop during which a multi-disciplinary team of experts will provide you with an update on the current state of the Brexit negotiations and during which they’ll host an interactive discussion on the impact of Brexit on the various aspects of your business.
Assessing the financial impact and the risks for your business from a worst-case-scenario perspective (hard Brexit on 30 March 2019) and scanning all aspects of your business (supply chain, operations, VAT, customs and excise duties, direct taxation, contracts, IP, data protection, trademarks, GDPR, product certification, corporate structure, regulatory, HR, workforce and global mobility/immigration, etc.) for potential risks and costs.
A Brexit assessment should always lead to a tailor-made map of all the risks for your business in relation to Brexit, including probabilities, costs, urgency and the time needed for implementing a contingency plan to mitigate the damage.
Our Brexit team works closely with the various business units in your organisation on an international level to work as cost efficiently as possible and to allow you to closely monitor the project.
During our Brexit assessments we will, where appropriate, leverage the services available within PwC for specialised supply chain, HR law, migration, income tax, VAT, customs and/or other expertise.