Sunday May 31, 2020

Tactical steps for dealing with the impact of Brexit

3rd March, 2019

Negotiation of the Withdrawal Treaty was supposed to be the easy part of Brexit. It has proved anything but. Events in Britain demonstrate the challenges facing anyone trying to understand Brexit, how it will eventually play out and when we will have certainty.

What is clear is that when Britain leaves the EU, the conditions in which Irish businesses trade with Britain will change, and those changes could be significant.

The ongoing, some might suggest increased, level of uncertainty has discouraged some businesses from taking action.

Encouragingly, in a recent survey of Irish chief executives, carried out by Deloitte and Enterprise Ireland, almost seven in ten (68 per cent) of the respondents surveyed said they had acted to mitigate against the potential impact of Brexit. Indeed, we have observed the winners of the Deloitte Best Managed Companies tackling this as a matter of priority.

But for those companies which have not yet started their Brexit planning exercise, there are some short-term tactical actions that can be taken before March 29.

These include:

l Market access: assess what might hinder or impact your ability to sell goods and services in the British market; for example, tariffs, authorisations, licences, labelling or domestic restrictions.

l Supply chain and customs: map your supply chain, consider whether to register for an Economic Operators Registration and Identification number in Britain, get ready to complete and submit new customs declaration forms, and consider pre-orders and stockpiling. Engage with your customers and suppliers to assess their Brexit-readiness, eg, through a Brexit supplier questionnaire.

l Brexit risk management and monitoring: look at whether your risk register is comprehensive. Assess your Brexit readiness by reviewing the government’s and government agencies’ communications. Good sources of information include the Department of Business, Enterprise and Innovation, Enterprise Ireland, InterTradeIreland and Revenue. Review the latest technical notices issued by both the European Commission and British government, as well as any other EU and global government communications and draft regulatory changes.

l Contract and legal review: assess commercial contracts with British customers and suppliers, and re-negotiate terms where practical – for instance, delivery terms – to protect against Brexit risks. Also, look at whether you can transfer data cross-border to Britain if needed and if your trademarks are protected. Stay informed of any implications Brexit will have on your data protection requirements through notices issued by the Data Protection Commissioner and Britain’s Information Commissioner’s Office.

l People: monitor government announcements both in the EU and Britain, agree your workforce support and engagement strategy with any employees you may have in Britain or British nationals working in Ireland, assess whether you can provide any cross-border services in the same way and continue talking to your employees.

l Financials: model the potential impact of no deal in your budget and forecast to cover currency fluctuation, customer demand, access to capital, costs or tariffs. This should take into account whether you can access any government grants to support with Brexit expenditure.

l Stakeholders: talk to your audit committees, draft customer communications, agree a strategy with key suppliers, engage with government, regulators and trade bodies and maintain conversations with investors.

Business leaders have to make judgments all the time. However, deciding what action to take when there is little clarity and huge complexity and associated cost is exceptionally challenging.

The key is to identify actions of “no-regret” - those steps that divert as few resources as possible and potentially add value to your business whatever the direction of Brexit.

There is still time to put in place positive actions over the next few weeks to protect your business against a range of potential outcomes, including no deal.

David Carson is Brexit lead at Deloitte

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