Whilst the dust is still settling on this momentous decision, current indications suggest that our representatives in Parliament will be looking to leave the EU by invoking Article 50 of the Lisbon Treaty, putting us on a path to leaving within two years. When this course of action is taken, what will this mean for you as a business owner?
Our advice in the immediate term is not to panic. Article 50 can only be triggered by the UK government giving notice of its intention to leave, a decision which the government has made clear it is not willling to take until a new Prime Minister and his or her team is in place, most likely sometime between October and the end of December this year. This delay will allow the new government to not only get itself in place but also to do the necessary preparatory work prior to any negotiations. During this period, the UK will continue to participate in other EU business as normal, although it won’t partake in any discussions regarding its own withdrawal.
During and prior to the two year negotiations period, EU laws will still apply to the UK. This means that for the majority of business owners, it will be business as usual for day to day working life, with all the same rules, regulations and, at times, challenges.
For those businesses who trade overseas, whilst there is likely to be an increase in foreign exchange differences these differences can be managed or hedged either by talking to your bankers or seeking the advice of your accountant or business advisor at Haines Watts. It’s also worth noting that many more mature businesses will have seen prior periods of exchange rate volatility and, as such, will be able to draw on previous experience with confidence.
We would also seek to reassure those companies with EU national employees. Given that there has been no change to employment rules and no suggestion that any employees from the EU that are legally in the UK should have any reason to be fearful of change, our advice to all businesses affected is to maintain a ‘steady as we go’ approach providing any necessary reassurance to individual employees as required.
As a final note of encouragement, we would draw your attention to Article 8 of the EU Treaties which stipulates that the EU ‘shall develop a special relationship with neighbouring countries, aiming to establish an area of prosperity and good neighbourliness’, which reinforces the EU’s obligation to seek some form of agreement as part of our exit negotiations.
In the medium term there will be a need for business owners to modify their business plans and seek the advice of their professional advisors to ensure that any risks are understood and managed as circumstances evolve. Forward planning is, however, a key discipline for any business owner and for those that are open to spending some time reflecting on their business as events unfold, there may well be opportunities to identify and explore.
Whatever the future holds, we are keeping a close eye on proceedings here at Haines Watts and will keep you up to date with any significant events or changes as they occur. It also goes without saying that we are here to guide business owners through this period of change and are only just a phone call or email away. If you are concerned about any developments that have arisen over the last week, or have any questions relating to the effects the decision may have on your business, please don’t hesitate to contact your local Haines Watts office.