Reveals a survey by international VAT consultancy Accordance
Although only one in four businesses have started ‘scenario planning’ for Brexit, many senior professionals are beginning to take steps to mitigate the risks of this uncertainty reveals a recent survey undertaken by international VAT specialist, Accordance. While doubts around the outcome of Brexit negotiations continue to discourage many companies from future-planning, the survey shows that over a quarter of respondents say their company has a Brexit strategy in place or is currently formulating one.
Accordance, that supports businesses trade across European borders by consulting with them on complex VAT issues, has identified that there will be some form of legal restrictions in at least 13 Member States of the EU after Brexit , 8 Member States have highlighted potential reciprocity issues for the 13th Directive VAT Recovery claims after Brexit and 18 Member States have indicated that so far their government and tax authorities have not given any views to how they consider Brexit will impact on how their VAT is accounted for in their country.
The finance professionals were asked in the Accordance survey to rate (on a scale of 1 – 10, where 10 represented serious concern) their main concerns of the UK leaving the European Union. The results were as follows:
- understanding the new Customs procedure and duties (6.3)
- the effect on their supply chain and logistics (5.3)
- the fiscal reporting requirements going forward (5.2)
- the contracts with customers and suppliers in a post Brexit world (4.4)
- the new EPR systems and processes (4.0)
- the effect on their working capital (3.3).
Not surprisingly, different industries expressed different levels of concern over these issues with customs procedures being of major concern for both Manufacturing and Distribution companies (mean average of 8.7 and 7.5 respectively), while contracts with suppliers were prioritised by Travel companies (8.4). Both Events and Distribution companies cited additional fiscal reporting requirements as principal concerns (6.4 and 7.6 respectively).
Nicholas Hallam, Chief Executive Officer at Accordance comments, “It is clear that Brexit presents a unique challenge for businesses – well beyond the scope of regular risk and impact analysis. Through this survey and in our daily interactions we are listening to our clients’ concerns about the future. An attentive and insightful approach will be key for advisers supporting business to successfully prepare for and adapt to changes, whatever form these may take.”