As British Prime Minister Theresa May delays the vote on her Brexit deal, it adds more uncertainty about the future of UK’s relationship with EU. The vote, which was supposed to take place on December 11, was postponed due to the lack of support to pass her agreement. Prime Minister May said that she would do her best to negotiate with EU before returning the deal to the Parliament. According to the government, the set date for the vote on Theresa May’s Brexit deal will be on January 15.
While the future remains unclear, businesses need to be ready with their strategies for the impact of Brexit. Most experts warn that Brexit will result in a slowing economy as the value of the pound plummets.
Businesses that import goods and raw materials from outside the UK will be heavily affected as they face higher production costs. They will then, have to put their prices up or reduce their profit margin should this happen. Conversely, UK-based firms that sell low-priced domestically produced goods will enjoy competition with expensive imports.
As part of the customs union, Britain benefits from free trade or the easy transport of goods across national borders. If a “Hard Brexit” takes hold, it is likely that UK will lose this benefit, making it hard for goods to be transported. A great deal of paperwork and additional tariffs will be involved in trading, which could directly hit small and medium-sized enterprises.
Whilst the weakening pound is favourable for SMEs as they can do more business with the EU, the additional cost on tariffs as well as the strenuous documentation involved in exporting goods is going to be an issue.
UK’s Trade Minister Liam Fox said that transitional deals would be put into place to reduce the disruption of trade. He expects the UK to have a draft of the agreement before the deal is finalised.
Hooper and Co. provides a hands-on service to businesses in all areas of international trade. We ensure that your company is compliant to regulations and we look for ways on how you could potentially save money, improve your productivity and implement customs procedures to help develop and grow your business. To speak with one of our Brexit consultants, please get in touch with us. You may fill out this form or give us a call on (0)2476 343037.