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Steps Small Businesses Can Take to Mitigate the Brexit Effect

05/07/2016 16:42 | Updated 05 July 2016

It may feel like everything has been thrown up into the air and we're still gazing skywards, eyes wide, watching to see where things will land so we can begin to pick up the pieces - but that feeling won't last forever.

While no one can tell small businesses what will happen or even in what order, there are plenty of practical steps founders can take to not only reassure themselves that everything is in hand and their business is in good shape, but also to tentatively look to the future and refresh their strategies.


Finances

The Institute of Chartered Accountants England and Wales, (ICAEW) has some great advice on this. It's clear that in the short term at least, firms that export to Europe and beyond, or use European suppliers, will be affected by currency movements. Their advice is to get a monitoring system in place and make sure to make sure costs don't accelerate beyond a set budget.

Tax

According to a post-EU referendum Government briefing paper, tax is a 'member state competence' which means it's not governed by the EU, it's down to the British Government and nothing is going to change overnight - or certainly until the Autumn when the Office for Budget Responsibility (OBR) will assess the finances once we have a new PM. However, VAT is the exception to this rule. Those who currently use HMRC's VAT MOSS (Mini One Stop Shop) to pay VAT in the country of purchase on digital services, will not be able to do so once we leave the EU. These firms will have to join a member state's Non-EU VAT MOSS scheme, or register individually in each EU country they do business with. For British firms, this might be Ireland.

EU Suppliers

It's going to be two years at least until we hear what tariffs will be imposed by the UK on imports, if any. What worries some UK firms is that if they have to pay more for goods coming inwards from EU suppliers that they then have to pay another tariff on to export into another country, for example the US, then this will make prices shoot up. While this may never happen, is it an opportunity to look again at British suppliers, for physical products such as clothing and services like packing and coding? UKFT.org has a listing of British clothing manufacturers on its site www.ukft.org


Government contracts

This is the time to consider opportunities in the domestic market such as selling to bigger brands, and to government. Large companies are still very much in the market for buying from small businesses, as seen in the appetite from buyers to attend The Exchange series of events we're hosting in the beauty, food and fashion sectors.
While the government is still working towards a target of spending £1 in every £3 with small business by 2020, have a look at Contractsfinder to spot opportunities in relevant sectors and consider getting on frameworks and the G-Cloud as these are effective routes to do business with the government.


Export

There's no reason at all that small firms can't still trade with Europe. Just like here in the UK, the facts are at a minimum and will be for some time, and the trade deal remains the same for now. But it's also time to explore trade outside of Europe. The World Trade Organisation's website has data around import and duty tariffs and regulations. Later this year Enterprise Nation will be leading trade missions to China and the US for the smallest firms.


For more information, we've brought together nine organisations in the small business space that can offer consistent advice around what to do following the EU referendum. These are Enterprise Nation, FSB, IPSE, National Enterprise Network, Open to Export, The Entrepreneurs Network (TEN), the Institute of Chartered Accountants, England and Wales (ICAEW), British Library Business and IP Centre, and Coadec.

Keep an eye out on our site for more information on this.

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