The latest Government video highlights that anyone working in the EU or EEA following Brexit may need a visa, work permit or resident’s permit and in some cases all three. Anna Tobin reports

Following Brexit, those travelling to some countries in the EU or European Economic Area, (EEA) A to provide or sell services may need a visa or a work permit or a residence permit, or all three, according to the Government’s latest Brexit explainer video. This applies to both businesses and the self-employed and even to those working in the haulage industry transporting goods across Europe.

The video, published on the Secretary of State for Business, Energy and Industrial Strategy, Andrea Leadsom’s, Twitter feed here, also explains that after Brexit employees and self-employed people may find themselves having to pay social security contributions, such as National Insurance, in both the UK and the EU country in which they are working too.

The video also hightlight that while UK obtained professional qualifications have until now been recognised in the EU, after Brexit they may no longer be. It is advisable to check with your professional body and the European Commission for further guidance on this.

This is not a bad dream. In the event of a No Deal Brexit, your tax bills may well go up if you import or export to the EU.

It’s been well publicised that a No Deal Brexit will mean that tariffs, a form of tax, will be added to some imported and exported goods traded between the UK and the EU. The impact on VAT hasn’t won nearly as much headline space, but that doesn’t mean it can be overlooked.

The issue is complex, with lots of different aspects to be considered.  For example, many EU countries have preferential VAT schemes for EU members. If the UK leaves the EU without a deal, then these benefits will be lost. And some countries require VAT returns to be filed locally, an additional cost that most SMEs will not welcome – and some may need to rearrange their finances to afford.

To double-check that you’ve covered all the bases of your business that Brexit could impact, download one of the three Brexit checklists that we offer to suit the different needs of different types of business. Once you have done that, download our Brexit audit tool to check that all those in your supply chain are as prepared as you are. You don’t want the effects of someone’s else’s failure to be felt by your organisation.

Better to be safe than sorry.

Anna

Rafael Rozenson, founder and CEO of protein water manufacturer Vieve, explains why small businesses can’t afford to make the expensive contingency plans necesary to protect themselves from every Brexit scenario

Has Vieve come up against any Brexit-related issues already?

Vieve is a protein water-based drink that is different to other drinks on the market. We’ve been trading for just over a year and a half and our business is quite unique, so we do about 70% of our business on exports. We are in about 16 countries now across Europe and the Middle East and we’ve just launched in Asia. Brexit has had quite a big impact on us, because we manufacture in the UK but import all of our ingredients that go into making the drink from Europe. So that is presenting quite a big challenge.

We also have quite a few customers in Europe and we’ve had quite a few distributors who are quite keen on our product, but because of Brexit they keep pushing back or saying that they don’t want to launch the brand, because it is quite an investment to launch in a new market. It’s just so frustrating because we’ve managed to secure all of this business in Europe and we’re talking to all these distributors at the moment, but nobody wants to commit until we understand what is happening with Brexit. It makes a lot of these discussions very difficult.

Have you looked at opening a base in Europe for Vieve to circumnavigate some of these obstacles?

We just don’t have the funds to be able to do that. We can’t afford to set up and have an office in Europe and an office in the UK.

What preparations have you made for Brexit?

We are now VAT registered in a couple of European markets, in Germany and France. So potentially what we could do is set up a warehousing operation where we stockpile some goods for some of our European customers there, but again it’s quite an expense. We are not a big company, we don’t have the funds to do all this contingency planning for things that might never happen. Even being VAT registered in another country means paying another accountant to file our VAT returns, which is like another thousand euros per country. It’s very difficult to plan for because we don’t know what’s happening and we don’t have the resources that the big companies have.

Have you found the Government to be suportive of you as a small business?

We find the advice you find on gov.uk to be very limited and not very helpful. And, in the course of two years, we have received one letter telling us that we need to register for an export number and that’s the extent of how much the Government has tried to support us in getting ready for Brexit. I do network with other entrepreneurs and we do try to support each other, but again basic things like understanding what tariffs we will have, it’s very difficult to know. Nobody really knows what’s happening, everyone is in the dark, so it’s pretty difficult to plan.

Have you tried to push out into other markets because of Brexit?

Well we are a young business so we take business where we can get it and our products have been well received in the Middle East and we’re in South Korea from this month, but there are a lot of complexities involved in exporting to new markets, each registered product needs new paperwork, whereas now when we export to Europe it’s so easy.

The Government has altered the tariffs that will apply in the event of a No Deal Brexit following pressure from business. Anna Tobin reports

The 2019 Institute for Fiscal Studies Green Budget finds economic uncertainty triggered by Brexit has been hugely damaging to private sector investment. Anna Tobin reports

The 2019 Institute for Fiscal Studies Green Budget, funded by the Nuffield Foundation and in association with Citi, with additional analysis from the Institute for Government, finds that Brexit related uncertainty may have caused private sector investment to be 15–20% lower than otherwise. It also found that a further Brexit delay would continue the uncertainy and poor growth, which could be down to around 1% a year.

Securing a Brexit deal, however, would lead to a rise in growth, but it would still be weak at around 1.5% a year. And, a no-deal Brexit, even with a substantial monetary and fiscal response, would likely mean two years of zero growth and a return to just 1.1% growth in 2022. This would leave the economy at least 2.5% smaller even than in a base case of continued delay and uncertainty.

The best scenario for growth the Institute for Fiscal Studies report found would be for the UK to remain in the EU, but if this was accompanied by a Labour government and its expected policies on tax, nationalisation, share ownership and labour market regulation, it couldn’t say whether the net effect would be better or worse than leaving the EU with a more growth-friendly set of policies.

“The UK economy is already around £60 billion smaller than it would have been without a vote to leave the European Union, with the UK missing out on a bout of global growth,” said Christian Schulz, chief UK economist at Citi. “Business investment is up to 20% lower than it would otherwise have been, hurting productivity and wage growth. Brexit no longer ‘just’ determines future relations with the UK’s biggest trading partner and the transition towards them; it is also intertwined with the political outlook and thus broader economic policies.

“Continued delay would mean more uncertainty, further denting business investment and leaving growth around just 1% a year, even with a further modest fiscal loosening. From a growth perspective, a Brexit deal is a little better, leaving growth at 1.5%, but it would leave no chance of Brexit being cancelled. A no-deal Brexit – even with a substantial stimulus – could mean no growth at all for the next two years. Remaining in the EU would be the best scenario for economic growth in the next few years.”

Dairy Council Northern Ireland warns that a No Deal Brexit will put Northern Ireland’s dairy industry into dire straights. Anna Tobin reports

A No Deal Brexit will mean that Northern Ireland’s dairy industry will find it very difficult to service profitable markets, to process all milk and support the jobs and livelihoods of more than 3,000 farm families across Northern Ireland, Dairy Council Northern Ireland has stated. The current trade tariffs for exporting both raw milk and the finished product would be in excess of £300 million, which would directly result in an impact on the price paid to farmers for their produce.

Dairy Council Northern Ireland (NI) represents milk processors in Northern Irelenad, including Dale Farm, Glanbia Cheese, Glanbia Ireland and Lakeland Dairies, four companies that account for over 90% of the 2.4 billion litres of milk collected from NI farms annually.

“Based on Dairy Council Northern Ireland calculations, in a no deal Brexit, trade tariffs on both raw milk and finished products moved from Northern Ireland to the EU would total £320 million, before you calculate the cost of the administrative burden customs will place on dairy processors,” said Dr Mike Johnston, CEO of Dairy Council Northern Ireland (NI).

“This tariff represents 25% of the value of our entire industry. In a sector where the margin is, at best, 3% or 4%, trade tariffs of that magnitude would wipe out the industry. The reality is stark for farmers. Our analysis suggests that the milk price paid to farmers would fall by over 10 pence per litre from its current base should such tariffs be imposed.”

The Federation of Small Businesses (FSB) is calling on the Department for International Trade and the Treasury to give small firms export vouchers to promote exporting in the wake of Brexit. Anna Tobin reports

The FSB is recommending that the Government issue vouchers up to the value of £3,000 to help small firms with exporting costs, including: investments in translation services, additional market research, and finding new clients through overseas trade fairs.

FSB research shows that the potentially positive impact of the depreciation in Sterling on exporters has been offset by the volatility in Sterling and the uncertainty surrounding a Brexit deal. It found that over half (53%) of smaller business exporters to the EU believe their business continuity and growth will be negatively impacted by a No Deal Brexit on Halloween.

Of those smaller businesses that export that have prepared for a no deal scenario, the average cost of preparations is £2,880, rising to £3,000 for those businesses that import and or export

“Exporting is a critical part of the British economy, especially to small firms hoping to expand and grow their businesses. But in order to succeed, it’s time that the Government stepped in and gave small firms the help that they need in order to realise their exporting ambitions,” said Mike Cherry, the FSB’s national chairman.

“The introduction of export vouchers up to the value of £3,000 will alleviate some of the strains that exporting firms are facing at the current time. Small businesses are being made to wait for the updated publication of the Government’s revised UK tariff schedule that would apply in the event of a no deal Brexit scenario, which must be published as a matter of urgency. This will allow smaller businesses to understand the terms on which they may be trading with the EU and indeed the rest of the world from the 31 October, in the event of a no deal scenario.

“The continued uncertainty is harming small firms ability to plan and prepare for the future with 40% of small business exporters saying that the uncertainty has had a negative impact on their future exporting ambitions.

“Around 21% of small firms currently export, but with additional assistance from the Government, FSB believes that those numbers could double.

“The use of these incentives will help on a number of fronts ranging from investment costs for items like translation services as well as additional market research and fact finding visits. These financial incentives are a great way to support our small firms that want to begin their exporting journey as well as those looking for ways to increase their exporting potential.”