By Peter Legge, Tax Partner at Grant Thornton Belfast
It is virtually impossible for any economic or political analyst to talk about Brexit without also mentioning the uncertainty surrounding the UK’s departure from the European Union.
The contest to be the next leader of the Conservative Party – and Prime Minister – has only added to that uncertainty and in the more than 10 weeks since the EU agreed a Brexit extension, there has been no progress on securing a deal.
What we can be certain of, however, is that the next PM will be either Boris Johnson or Jeremy Hunt – but what does that mean for businesses?
According to Nicky Morgan, the senior Conservative MP and chair of the Treasury Select Committee, speaking at a recent roundtable hosted by Grant Thornton, it means a no-deal is now more likely than ever.
Others, including the Dutch and Irish prime ministers, are giving the same warning.
A recent survey of members of the Ulster Society of Chartered Accountants Ireland found that just 10 per cent would support a no-deal exit.
Meanwhile, clients who have planned for such a scenario are also telling us that no-deal in October will be more challenging than it would have been in March.
An election also now appears to be a stronger possibility this autumn with the government’s current working majority looking increasingly vulnerable.
Businesses want to ensure their organisation, products and services comply with any new rules and processes that may be introduced following Brexit or result from an exit without a deal.
They want to know that they can minimise disruption either to their people or to their supply chain and distribution networks.
They are asking how their costs could be impacted, how they can deal with cashflow problems, and have concerns around new tariffs and customs procedures that may be placed on imports into the UK from the EU and into Ireland from the UK.
Our advice is that businesses and other organisations should plan for a no-deal Brexit on or after 31st October. It is now more likely than ever. Planning now can mitigate many of the risks and costs that would result from a no-deal and ensure businesses are prepared. Also, many of your customers will increasingly be looking for assurance that their suppliers are Brexit-ready. In our experience, Brexit planning usually identifies opportunities as well as risks.
If you already have a plan in place, you should keep this updated to deal with any additional challenges in October, and use the extended period to protect, create and transform value.
The wider context may still be one of uncertainty, but by taking control of matters within their own gift, businesses can ensure a firmer footing is ahead no matter what the outcome.