It’s fair to say that the outcome of the Brexit vote last year came as a complete surprise to many people; but now that we’re 6 months further down the line and most of the dust has settled, are we any further to really understanding the implications of what leaving the EU will have on Northern businesses?
Whilst there has been much discussion in the media about the impact of Brexit on London and the south, the conversation about how this move will affect the North of the UK is notable – as per usual – by its absence. And despite the amazing work of several key institutions, such as the Greater Manchester Chamber of Commerce and the newly developed Northern Powerhouse initiative, many are still justifiably concerned that Brexit will result in even less spending being put towards growth in the North, and the UK becoming even more centralised.
Obviously, without the ability to see into the future – which even we don’t have – it is hard to predict with any accuracy what the implications of Brexit will be for Northern businesses when it does eventually happen (especially as no one even knows definitively what Brexit means!). But, if you’d like to know our opinion, for what it’s worth, then please read on for North West Digital’s take on what may be on the horizon.
How Will Brexit Effect VAT?
Currently VAT is controlled by EU law, so once we have left the EU it is highly likely that changes to the way VAT is applied may be brought into effect by the UK government. Essentially, as the government will no longer be working within the restrictions that were set by the EU, there will be no controls over what they can and cannot change, and so anything – quite literally – could be on the table.
For example, the UK government may decide to implement varying rates of VAT for different products and services; a suggestion that has been mooted in the past. Additionally, they may choose to apply VAT to products and services that have previously been exempt, or change the rates of VAT altogether.
Whilst these are currently only suggestions of what may happen, as there has been no official comment from government or HMRC about what may happen to VAT rates once the UK has left the EU, it is important that businesses are aware of the changes that may occur. Any changes to the tax system will naturally have a knock-on effect on businesses financially, whether for better or worse, and may additionally make complying with VAT a more complicated process, so that companies may have to invest more time and money into updating their procedures in regards to tax.
Will Brexit Affect Importing And Exporting In The North Of The UK?
It may seem like an obvious observation, but once the UK leaves the EU and there is no longer the free movement of goods between the UK and the rest of Europe, there will be significant large scale changes to the importing and exporting of products. However, as no one really knows yet what agreement is going to be made with the other EU nations, it is very hard to speculate as to the full extent to which importing and exporting businesses will be affected.
Nevertheless, it is fairly reasonable to assume that the current system – whereby a company importing goods from another EU country does not pay VAT – is highly likely to change, to the effect that companies will be required to pay import tax to HMRC. Although businesses would be able to claim any payments back on their next VAT return, this change could initially affect many businesses. In particular, small to medium sized businesses will be especially susceptible to any changes to the current system, due to the immediate disruptions they may cause to their carefully balanced cash flow systems.
What Changes Will There Be To Employment Law After Brexit?
In addition to the financial implication, many Northern business owners and entrepreneurs are understandably concerned about the effect that Brexit could have on employment law. With the current legislation having been handed down from the EU, any potential repeal of EU legislation could enable the UK government to make significant reforms to the law in this area.
And whilst the present UK government has been quick to play down the suggestion that there will be significant changes to employment law, many workers and employers alike remain seriously concerned that even the smallest changes could drastically affect the way a company can – and will – do business.
Are There Any Positive Effects Of Brexit?
Despite everything we’ve just mentioned there, whilst it may sometimes seem like Brexit is going to make things much harder for Northern businesses overall, that is not entirely true; the outlook is, on balance, not as bleak as one might first think!
In the long run, whatever the details may turn out to include, it’s likely that Brexit could result in fewer restrictions being placed on the market and its products, as the UK will no longer be forced to implement the rules handed down by the EU. Whatever the pros and cons, this will inevitably give business owners much more freedom in terms of how they operate, which must surely be good news.
The Business World Is Changing
Whichever way you look at it, it’s undeniable that there is a lot of uncertainty around at the moment about what Brexit may have in store for us all. Obviously, with a new Prime Minister in charge and a new Chancellor by her side, not to mention a brand new office altogether in the Minister for Brexit (officially known as the Secretary of State for Exiting the European Union), it stands to reason that we should all brace ourselves for big changes ahead.
Just this week, MPs in Parliament have voted to back the proposed Brexit bill by 494 to 122, giving Theresa May the go-ahead to trigger Article 50 of the Lisbon Treaty. What this will really mean for Northern businesses is yet to be seen, and it will probably be some considerable time before any of us knows anything for certain or in any detail; certainly, in the immediate future, it will be business as usual, as the UK’s position within the EU will remain stable and the current laws and regulations will remain in force.
Naturally, whatever happens, the UK government still hopes to get the best Brexit deal for Britain and make the UK a strong and influential global powerhouse and a great place for people to do business. Here at North West Digital we’ve got everything crossed that Brexit will ultimately be good news for Great Britain, and we’re hoping that our government can see further than the M25 to ensure that businesses continue to grow and thrive in the north of the UK.
Get In Touch
If you’d like to futureproof your business and are looking to explore more exactly what the implications of Brexit may be for your company or industry, then the Greater Manchester Chamber of Commerce is running a Brexit – Opportunity or Threat event at Elliot House on Deansgate, Manchester, on 23rd February 2017. To address the concerns of their members,
“the GM Chamber – working with one of its members Know and Do Ltd – have created a practical seminar to help business leaders to explore how to prepare to minimise risk and maximise their company’s opportunity during the next 12 – 24 months.”
To find out more or to book your place, you can visit the web page here.
Alternatively, if you’d like to speak to one of us here at NWD, about Brexit or anything else, then you can contact us in any of the usual ways; by dropping us an email at info@, by giving us a bell on 0161 477 8950, or by completing the contact form on the website and we’ll get back to you as soon as possible.