Brexit and beyond

How can businesses affected by the end of the transition period mitigate risks and make the most of opportunities associated with the UK’s new trading agreement with the EU? Building on the work of Barclays’ Brexit clinics, the Business Bank hosted a Facebook Live session, with trade experts able to give clearer guidance to clients now that the terms of departure are largely known.

December’s Brexit deal between the UK and EU governments set out new arrangements on tariffs, trade, data and VAT. Now, company leaders are attempting to digest, understand and navigate the terms of the agreement.

Barclays’ Co-Head of SME Business Banking, Ian Workman, welcomed experts from the CBI (Confederation of British Industry), ACCA (Association of Chartered Certified Accountants), IOE (Institute of Export & International Trade) and DMA Group (Data & Marketing Association Group) to answer questions from businesses and outline ways to deal with new challenges and make the most of opportunities. “Although it can seem daunting and complicated,” said Marco Forgione, Director General of the Institute of Export and International Trade, “there is plenty of help available and commercial advantages to making sure you have your processes in place early.”

“This is an agreement that does fundamentally change the way that many UK firms will trade with the EU in the future,” added Russell Antram, Head of EU Negotiations for the CBI. “There are some real positives in the deal, I think – tariff and quota-free trade are the big pluses, but these are going to be accompanied by new customs procedures and formalities.

“There are issues around rules of origin, which I think many firms probably didn't know about, particularly SMEs who are  now coming to grips with them, and that is causing real anxiety for members of the CBI, as are issues with mutual recognition and sanitary checks.” 

Antram stressed that the key thing for businesses affected by the end of the transition period to remember is “if you don’t think you’ve sufficiently planned or prepared for Brexit, it’s not too late to do so. It’s been a difficult 2020 and you’re not alone. It can be complex, but help is out there.”

He cited trade organisations, customs experts, government resources, the CBI and banks as the best places to get that help, stressing the need for agility to review pricing structures to manage extra costs. The IOE also has a portal to help businesses navigate through the changes and access training.

“Many businesses are still in the understanding and adjusting phase,” Antram added, “but now the substantive negotiations are out of the way we've got some kind of certainty around where we’re heading. When the dust settles, I think opportunities will begin to emerge.”

As part of that emergence, Workman noted anecdotal evidence from his clients that they were looking afresh at their supply base and actively looking to buy British in their supply chains “which can be a real opportunity post-lockdown”.

Preparing clients

Asli Yildiz, Head of Legal at the Data and Marketing Association (DMA Group), discussed challenges around the free flow of data and GDPR. She advised companies to sign standard contractual clauses with counterparts to gain additional protections around data, and recommended getting in touch with trade associations sector by sector, saying: "Data is very important for all businesses, and if you want to continue trading legally then you need to take action." 

Asked for his key piece of advice to the seminar’s viewers, Yogesh Dhanak, Technical Advisory Manager at ACCA, reminded SMEs that “even within all these big VAT changes, the big issue for businesses will be cashflow. Accountants will be able to help with cashflow forecasting and planning”, which may need to be augmented over the next year by bank financing.

“Some businesses will be able to cover that with savings,” says Workman, pointing to Barclays’ cashflow forecast and working capital cycle tools. “Others may need to think about arranging an overdraft or a loan. That’s where Barclays can help. Our relationship managers can talk to you about cashflow, working capital cycles, and what options are open to you to mitigate any risks.” The bank’s business money management hub may also be a useful resource, featuring information on managing cashflow and adapting to coronavirus.

Since the UK’s decision to leave the EU, Barclays has helped thousands of businesses adapt to the resulting challenges and opportunities, through dedicated Brexit clinics, specialist webinars and a detailed online hub – along with financial support in the form of a £14bn lending fund. Barclays has worked with the Department for International Trade, the CBI and the IOE to make sure clients have the access to whatever advice and resources they need.

The Facebook Live session included discussion of specific questions from business owners, assessing their own situations with tariffs, VAT, data regulation, subsidiaries, employee permits and more. The guidance offered was not “one size fits all” and depended on the nature of the goods, services and jurisdictions in question. This served to highlight the enduring need for counsel from banks, trade bodies and accountants as SMEs familiarise themselves with new arrangements.

“My one piece of advice,” said Forgione, “is to do as the government is advising: check, change, go. Find out what the implications are to trading globally, and make sure that you put the processes and procedures in place early because that will remove many of the headaches of trading internationally.” And, as Antram recapped, “it’s not too late, and help is available to make the change”