Article 50: Future of EU workers tops list of concerns for Swindon firms, say advisors

March 30, 2017

Business advisors covering Swindon are poised to deal with a wide range of concerns impacting on their clients following the triggering of Article 50 – from employment to tariffs and tax.

They say the major worry – and one that is already affecting some firms – is the uncertainty over the status of EU nationals employed in the UK.

According to accountancy firm Grant Thornton’s South West practice leader Tim Lincoln, pictured right, these businesses want to give a guarantee to their EU employees that they will have the right to remain.

“This is creating huge uncertainty for people and the organisations that employ them,” he said.

“From financial services to farms and from care homes to construction. This is impacting on key parts of the economy already, not least most of our key public services, and we would call for a unilateral announcement by the government to secure their position to remain, which will also set a positive tone for more collaborative discussions with the EU.”

And Kate Westbrook, pictured below left, corporate partner at Swindon-headquartered regional law firm Thrings, said businesses needed to carefully consider the impact of Brexit on both existing employees and those they intend to recruit and retain in the future.

She added that it is not just EU workers who are likely to be extremely concerned, but also those from Iceland, Liechtenstein and Norway– which are in the European Economic Area (EEA) but not the EU – and Switzerland “particularly given the Government seems unwilling to confirm how they will be treated unless and until UK citizens are granted similar rights”.

She added: “The employees might be able to apply for permanent residence, although this should always be considered carefully with the benefit of legal advice. Those businesses which are likely to recruit EU nationals in the future will need to familiarise themselves with immigration sponsor and application processes and connect with organisations that can assist them.”

Experts at regional accountancy firm Bishop Fleming said the first likely practical impact would be felt by firms selling to and buying from the EU.

VAT director Wendy Andrews, pictured below right, said: “The fact that the government has been clear that it does not expect the UK to remain within either the single market or the customs union means that some of the implications can be set out with some certainty.”

This meant that, with the UK outside the single market and the customs union, goods which are dispatched to customers in the remaining EU will need to cross a customs barrier of some kind. This may result in delays at the border, which may impact businesses selling perishable products and other time-critical supplies.

Although it is possible that the UK will negotiate a free trade agreement with the remaining EU, without such an agreement there may be customs duties on goods imported into the EU which will affect the competitiveness of UK goods against similar EU-produced goods.

For businesses that sell to private consumers in the EU, the creation of a customs barrier could have significant practical implications, unless special arrangements are put into place. Without such arrangements, consumer customers may have to pay import VAT and customs duties before they can take delivery of goods they have ordered from a UK-based website.

Purchases by a UK business from an EU supplier may also need to cross a customs barrier, leading to potential delays and the need to pay import duty and VAT. VAT is likely to be reclaimable but could lead to a cashflow cost if it has to be paid at or soon after importation, and reclaimed on the next VAT return.

The level of any customs duty imposed on goods arriving from the EU will depend on the eventual agreement, but if there is duty on imported goods it will make them more expensive than locally produced goods.

Also, goods which have been purchased from an EU website may need to have import VAT and duty paid before they can be delivered – this will increase the cost and make the process more difficult."

Kate Westbrook at Thrings, said many businesses could be faced with greater levels of bureaucracy, with the amount of administration and paperwork involved in exporting and importing likely to increase.

“However, much of this is capable of being done electronically, and working with business support organisations such as Business West will assist them in this process,” she said.

“The flip side is that trading with other countries may become easier once the UK is able to negotiate its own trade deals.”

Accountancy group EY’s regional senior partner Andrew Perkins, pictured left, said business were looking to politicians and negotiators on both sides to find common sense solutions that worked for both the economy and society.

“Talking to businesses in the South West, a strong early signal in the negotiations that both sides are committed to an orderly and phased-in Brexit deal, would go some way to provide reassurances,” he said.

“Other items on the agenda include the lightest possible customs border to limit disruption to trade, ability to recruit staff and a stable regulatory system between the UK and EU.”





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