Business consultants
with a global perspective

Accounting • Audit • Tax • Consulting

UK EU referendum: doing business in a post-Brexit world

Tuesday, 28th June 2016


Britain’s vote to leave the EU has left politicians and markets reeling. But while the new political order undoubtedly presents challenges, those businesses most likely to weather the storm will be those with the flexibility to adapt to it. And for these, the new economic order could promise opportunities in the longer term.

 

After the stunning 52:48 vote in favour of the UK leaving the European Union on 23 June 2016, businesses the next day woke up to a new world. Initial responses – from politicians as much as the markets – have done little to abate a sense of disbelief. But in the face of such unprecedented change, it would be wrong to lose a sense of context. The FTSE 100 has now recovered to its September 2015 level; commentators point to a firming market in safe-haven gilts; the pound’s dramatic adjustment heralds a new and more competitive environment for exporters.

The Brexit vote, of course, raises issues of immediate uncertainty for businesses – in terms of financial reporting, indirect taxation, financial services, M&A, mobility and personnel – particularly for those trading cross-border. A situation not helped by current controversies as to when Article 50 – the start-point for Brexit negotiations – might (or should) be invoked, and the likely response of EU Member States, when it is.

Against this background, one point must be made. Post-2008, for any UK – or European – SME business owner it is a fact that change and uncertainty are the new normal. In such a challenging business environment, flexibility is key. And SMEs and mid-market organisations have proved themselves among the most adept at this.

In the short term, Russell Bedford member firms – in the UK, Europe and beyond – will be working closely with clients to monitor the full implications of the UK’s new relationships, as these become clear.

The immediate outlook for many businesses is likely to be one of reflection and readjustment. But, in an environment of uncertainty and change, those best placed to benefit from the opportunities provided by new business environment are likely to be those most able to adjust to it. It could well be the case that, for many, there might be more to gain than to fear.