Brexit - reality check for UK entrepreneurs

Please note that the information herein is of a general nature and you should not act or refrain from acting on it without professional advice on the specific facts of your case. No liability is accepted by the author or Sykes Anderson Perry Limited in respect of this article. Brexit is a complex subject and the above is a basic outline only and is intended only as a general guide. Nothing herein constitutes financial advice.

Brexit is likely to come with some “challenges” for many small and medium sized businesses. Below are a few practical thoughts on what could happen to the UK small business entrepreneur.

  • The UK government will look after UK big business first. This is common sense because problems for them will have a bigger economic and political impact. Because time is now very short and resources very limited smaller businesses should work on the basis that “benign neglect” of their concerns by the UK government is the best they will get.

  • This means that there will be lots of uncertainty and many loose ends for smaller businesses. Do not expect clear or any fast answers to your questions from the UK government and be ready to be pragmatic. Expect to be “sold out” by the UK government if this protects bigger players elsewhere in the economy. The key is to keep flexible so no long leases or tie ins.

  • Do not assume that because you do not trade directly with the EU you will be unaffected. Your customers, suppliers and staff may be affected and this will cause you problems. Matters you have not thought about could jump out at you.

  • Do not believe what UK and EU politicians say about Brexit. General commentary is unlikely to be helpful. You should think very specifically about how your own trade may be affected.

  • No one likes competition so if your competitors in Europe can shut you out they will do so. This may be through Customs Duties but also more likely through licensing or claiming that you no longer meet their quality standards or require local authorisations. Expect these to be small minded and petty but time consuming and damaging to your business.

  • Competitors may use local rules and compliance requirements to block your access to markets. These are easier for local smaller businesses to use especially if they are connected with local people who are responsible for giving consents or enforcement.

  • Competitors may report you for working illegally in an EU country and take steps to make life awkward for you even though you are clearly entitled to carry on doing what you have been doing. Reporting you to the local police or other local authorities costs them nothing even if unfounded and is disruptive for you.

  • The more aggressive and disruptive your business is to other EU businesses the higher risks you run.

  • If you tender for EU grants or tender for work from EU institutions or EU governments your business may be affected. You may no longer be eligible to tender or the due diligence required on you may become more extensive. Expect people awarding tenders to be more willing to exercise their discretion against you.

  • Your UK qualifications or licences may longer be accepted in Europe. You may have to go through a lengthy process to obtain new qualifications or licences from an EU country.

  • If you employ EU nationals expect them to be reviewing their positions especially if they are young and single. A further drop in the value of the pound may mean going home becomes attractive.

March 2018
David Anderson
Solicitor-Advocate and Chartered Tax Adviser