Tactical steps for dealing with a 'no deal' Brexit has been saved
Tactical steps for dealing with a 'no deal' Brexit
David Carson, Brexit Lead at Deloitte, outlines that there is still time to take action in advance of 29th March
This article appeared in the Sunday Business Post on 3rd March 2019.
When it came to Brexit, negotiation of the Withdrawal Treaty was supposed to be the easy part. It has proved anything but easy. Events in London currently 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 the UK leaves the EU, the conditions in which Irish businesses trade with the UK will change, and those changes could be significant.
The ongoing, some might suggest increased, level of uncertainty has discouraged some business from taking action. Encouragingly, in a recent survey of Irish CEOs, carried out by Deloitte and Enterprise Ireland, almost seven in ten (68%) said that they had acted to mitigate against the potential impact of Brexit, and indeed, we have the winners of the Deloitte Best Managed Companies tackle this as a matter of priority.
Short term tactical actions
But for those companies who have not yet started their Brexit planning exercise, and as a no-deal Brexit becomes ever more likely, there are some short term tactical actions that can be taken before 29 March. These include:
- Market access: assess what might hinder or impact your ability to sell goods and services in the UK market, including the potential loss of EU Trade Agreements; for example, tariffs, authorisations, licences, labelling or domestic restrictions.
- Supply chain and customs: map your supply chain, register for an Economic Operators Registration and Identification number both in the UK, get ready to complete and submit new customs declaration forms, and consider pre-orders and stockpiling.
- Brexit risk management and monitoring: look at whether your risk register is comprehensive. Assess UK government technical notices (www.gov.uk/brexit), as well as EU and global government communications and draft regulatory changes to ensure compliance.
- Contract and legal review: assess commercial contracts in the UK market, and re-negotiate terms – for instance, delivery terms – to protect against Brexit risks. Also, look at whether you can transfer data cross border to the UK if needed and if your trademarks are protected.
- People: monitor government announcements both in UK and EU, agree your workforce support and engagement strategy with any employees you may have in the UK, assess whether you can provide any cross border services in the same way and continue talking to your employees.
- 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..
- 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 judgements 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 little resource as possible, and potentially add value to your business whatever direction Brexit heads. There is still time to put in place some positive actions over the next few weeks to protect your business against a range of potential outcomes, including no-deal.