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Brexit draft withdrawal agreement

Uncertainty will continue for some time, businesses must continue to prepare - Deloitte

Commenting on the draft Brexit withdrawal agreement, David Carson, Brexit Lead at Deloitte said:

There are many positive aspects to the draft Political Declaration on the Future Relationship, including a free trade area for goods that would obviate the need for tariffs and quotas on EU-UK trade.

However, there is still much to do and the complex political situation needs to be navigated before a final deal on the Withdrawal Treaty is agreed by all sides. Outstanding policy issues such as security and defining the future trading relationship, particularly around services, will now be at the forefront, as the next priorities get ironed out.

Businesses who have taken a ‘wait and see’ approach to Brexit need to get the ball rolling on their plans and be prepared for all scenarios. The impact on supply chains and access to talent are high on the agenda. However, companies shouldn’t overlook the direct and indirect effect on data flows, funding requirements and maintaining contract coverage. Ultimately, businesses need to be ready to adapt to whatever outcome – those that can do so quickly will be the winners in the long-term. Uncertainty will continue for some time so our recommendation is that businesses maintain their focus upon planning for a wide range of outcomes.

“In our most recent survey of Irish CFOs, published this week, 71% of Irish CFOs reported a high level of external financial and economic uncertainty. That said, 74% expect to achieve revenue growth over the next 12 months – this speaks to the confidence and resilience of Irish businesses in this uncertain landscape. The focus on Brexit planning will be critical in delivering this growth.”

Deloitte’s advice for Brexit planning

1. Understand your Brexit exposure

Organisations need to assess their exposure to Brexit related risks under different scenarios and be ready to act once a future deal is agreed.

2. End to end supply chain review

Look at your supply chain from top to bottom so you know exactly where parts originate, their routes to market and how tariffs could be affected.

3. Be clear on immigration

The key question is to understand whether your staff are predominately EU, UK or international, and how your business would run if you no longer had access to UK employees. In addition, businesses with subsidiary or sister companies based in the UK, but with EU employees working for them, will need to consider the need to adjust or deal with the possibility that these employees may no longer wish to be based in the UK.

Knowing your employees’ immigration status, whilst discussing workforce implications with third party contracts will be critical here.

4. Adapt technology and systems

Some customer interfaces and reporting systems may need to be configured and adapted, while other new technology projects may need to be placed on pause.

5. Hit start on business strategy reviews

Pressing ‘go’ on business strategy reviews will ensure that decisions with long lead times – such as new operating models and locations, new markets or new product types – take into account the implications of a hard Brexit.

6. Get up to speed with regulation

Considering whether regulatory divergence will impact continuity of trade or delivery of services will be important, as it could inform whether some relocation of staff and operations may be necessary.

7. Talk to your employees and listen to their thoughts on Brexit

Conduct employee Brexit surveys to understand sentiment towards Brexit and the impact it could have on matters like staff turnover.

8. Keep data moving

Companies will need to adapt to new EU data regulations in anticipation of an agreement between the UK and EU to maintain cross-border flow of personal data.

About Deloitte

At Deloitte, we make an impact that matters for our clients, our people, our profession, and in the wider society by delivering the solutions and insights they need to address their most complex business challenges.

As the largest global professional services and consulting network, with approximately 263,900 professionals in more than 150 countries, we bring world-class capabilities and high-quality services to our clients.

In Ireland, Deloitte has nearly 3,000 people providing audit, tax, consulting, and corporate finance services to public and private clients spanning multiple industries. Our people have the leadership capabilities, experience and insight to collaborate with clients so they can move forward with confidence.

In this press release references to Deloitte are references to Deloitte Ireland LLP. The information contained in this press release is correct at the time of going to press. Deloitte Ireland LLP, is the Ireland affiliate of Deloitte NWE LLP, a member firm of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”). DTTL and each of its member firms are legally separate and independent entities. DTTL and Deloitte NWE LLP do not provide services to clients. Please see www.deloitte.com/about to learn more about our global network of member firms.
 

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