Ten FAQs about Brexit and your small business
- Am I in a business heavily affected by Brexit?
- Will my suppliers or customers be impacted by Brexit even if I don't buy or sell directly to the EU?
- Do I need to find alternative suppliers as a result of Brexit?
- Do I need to increase my inventory or buy additional storage space as a result of Brexit?
- What will the legal position be if deliveries are delayed or orders cannot be fulfilled?
- Do I have enough cash to see me through any difficulties as a result of Brexit?
- What will happen to existing employees who are EU nationals?
- Is work-related travel in the EU different post Brexit?
- What do I need to communicate to staff, customers and suppliers as a result of Brexit?
- Where can I get more help for businesses on Brexit?
1. Am I in a business heavily affected by Brexit?
If you import or export goods from/to the EU, there's an obvious impact. There are many preparations that you should by now already have taken. For example, applying for an EORI number (Economic Operator Registration and Identification) and planning how you will provide trade and customs clearance documentation if it is required.
Find out more with government guidance for:
Even if you don't trade with the EU, your business is likely to be affected - either directly (for example, if you employ EU nationals) or indirectly (for example, through the knock-on effects on your suppliers and customers).
2. Will my suppliers or customers be impacted by Brexit even I don't buy or sell directly to the EU?
It may be impossible to get to the bottom of this question - how much your suppliers are affected will depend on their suppliers, and so on. But it's worth making an effort, certainly in terms of your most important suppliers and customers.
Get in touch to ask them about their plans and any problems they anticipate. Keep up to date with regular communication.
3. Do I need to find alternative suppliers as a result of Brexit?
In a perfect world every business would have supply options. So if you are selling flowers or vegetables that come through the Channel Tunnel and might get stuck at the border, you might have a UK grower that you can turn to.
The sooner you can act, the better. Brexit affects every business in your situation, so UK alternatives may already be committed elsewhere.
4. Do I need to increase my inventory or buy additional storage space as a result of Brexit?
This is what a great many manufacturers, distributors and retailers have been doing. Can you work out which items would cause you the greatest loss if they became unavailable for any length of time?
Given the continuing uncertainty - and the impact of the coronavirus pandemic - aim for as much flexibility as possible.
5. What will the legal position be if deliveries are delayed or orders cannot be fulfilled?
Do any of your customers have penalties for late delivery? If a supplier is unable to supply you on time, so you are late with delivery to your customer, is that customer contractually able to impose a penalty charge on your business?
Review your trading terms so that you know where you stand.
Equally, what will your rights be if your suppliers let you down? You may want to check the details of your contracts to see what reasonable compensation you could be entitled to. Working with your suppliers - who might themselves face significant stresses - is likely to be a more productive approach than making unreasonable demands.
6. Do I have enough cash to see me through any difficulties as a result of Brexit?
Many businesses have taken the step of increasing their overdraft facility, just in case. You will have to pay a setting up charge, but at least you will only pay interest if you actually end up using the money - which is what an overdraft is designed for.
If an overdraft is not available, look at other funding options, such as asset finance or invoice discounting, as a way to free up some cash in case you need it.
- If your bank turns you down, you are automatically offered a referral to funding platforms that can help you find other lenders.
- Check for other sources of finance and support for your business.
The most important thing is to have a reliable cash flow forecast in the first place. So if things go wrong and problems do arise, you can plug the new figures into the cash flow and work out what needs to be done.
7. What will happen to existing employees who are EU nationals?
Existing employees who are EU nationals were required to apply for settled status by 30 June 2021. If they have not already done so, eligible EU, EEA and Swiss citizens, and their family members can make a late application to the EU Settlement Scheme. They must have reasonable grounds why they did not apply on time.
Since 1 January 2021, new arrivals from the EU must be sponsored through the points-based system that applies to immigrants from any country.
8. Is work-related travel in the EU different post Brexit?
For any travel to the EU, you should:
- check that your passport will be valid, with at least six months left
- get any travel insurance you want (the current EHIC cards will no longer be valid from 1 January 2020 but you may qualify for the new UK EHIC card)
- organise an international driving licence if required
- check for any additional business travel requirements
9. What do I need to communicate to staff, customers and suppliers as a result of Brexit?
Brexit is an unsettling topic. Communicate your expectations and confirm your working assumptions versus theirs. Listen to any concerns that people have. Provide reassurance about any Brexit issues that your business faces and the plans that you have put in place.
10. Where can I get more help for businesses on Brexit?
The UK Government has published extensive Brexit transition guidance. This includes a quick self-assessment tool to see what you might need to do, and the option to sign up for updates.
Other useful sources of information include:
- the ICAEW Brexit checklist - a useful quick start guide to key issues, along with links to further information
- support for businesses in Scotland on operating post Brexit from Scottish Enterprise
- the FSB Transition Hub
- advice for your sector from your trade association