The prospect of the UK leaving the EU without a withdrawal deal has increased after the UK Government postponed the parliamentary vote last week.
The Prime Minister’s proposed deal will now be debated in the new year, but there’s still every chance that it will be rejected by Parliament, even with additional assurances relating to the Northern Ireland backstop.
Such uncertainties have intensified the already-significant pressure to urgently find a solution before 29 March 2019.
The clock is ticking with less than 100 days to go. Both the UK Government and the European Commission have this week ramped up preparations for a ‘no deal’ Brexit, although the Government continues to stress this is ‘unlikely’ to occur.
Businesses across the EU are now being urged to consider their own contingency plans, whether they are sufficiently robust and what further actions might be necessary.
The Bank of England recently stated that large parts of the economy are not adequately prepared for ‘no deal’, and yesterday cut its UK growth forecast, warning that a lack of Brexit clarity is hitting the economy.
According to business groups, British businesses have been ‘watching in horror’ at the lack of progress, this week warning that hundreds of thousands of businesses have not begun contingency planning, and emphasised that those that have are using up significant resources in doing so.
UK and EU support
Both the UK Government and the European Commission have published guidance aimed at helping businesses to prepare for a no-deal situation
For example, information is available online relating to trading with the EU; customs, VAT and excise; data protection; guarantees for EU-funded programmes; and banking, insurance and other financial services. We have published a guide to help members navigate this material.
This week, HM Revenue & Customs has written to businesses that trade with the EU, instructing them of what they would need to do to prepare for ‘no deal’. Other UK Government departments are also accelerating such preparations, and further instructions to businesses can be expected in the coming days and weeks.
Separately, the European Commission issued an additional ‘no deal’ contingency plan, outlining a number of unilateral and temporary measures that will be taken in a limited number of areas – including financial services, air transport, customs and climate policy – while also calling on EU member states to accelerate their work to prepare for all Brexit scenarios.
Preparing and supporting members
We know that members and wider businesses continue to struggle with the uncertainty, and with the drain on time, costs and other resources.
ICAEW’s Brexit hub contains a wide array of information and guidance to help members assess the implications of Brexit, and prepare businesses and clients for a number of scenarios.
We’re also aware of concern that non-Irish resident accountancy firms currently on the Irish audit register are unlikely to retain automatic audit rights in Ireland in the event of ‘no deal’.
We’ve provided our firms that carry out audits of Irish entities with an action framework to help no deal-scenario planning, in respect of those audits where the opinion is issued after 29 March.
In the UK, the Government and Parliament need to listen to the voice of business and industry bodies ahead of the parliamentary vote – which is now due to take place in the week commencing 14th January 2019 – and ensure concerns are considered and interests represented.
We’d very much like to hear your feedback on how Brexit is affecting your business or clients – whether in the UK, the EU27 or internationally – as well as where our support is most helpful and where we could be doing more. Please do comment on this post or send any questions and comments to firstname.lastname@example.org and a member of our team will get back to you.