Your clients, Brexit – and an extra service you can offerPublished on 21st June 2019
The Government has confirmed that if there’s no deal, the UK will leave on 31 October 2019. What does this mean to your clients – and to you?
We see why there could be some opportunities for all concerned.
With the Brexit deadline extended, and still no clarity on the form that Brexit will take, many businesses have been forced to re-evaluate their Brexit planning. Naturally, your clients will be turning to you as their accountant for advice and practical solutions.
The big problem right now is, of course, uncertainty. Companies want to adapt and get ready, but as negotiations on possible divorce deals have been drawn out for so long it has been difficult for businesses to be prepared - because they simply haven’t been sure what to prepare for.
Some businesses have been unsure whether they would be able to sell to their current European markets or even be able to bring in anything, from manufactured items for resale to raw materials, from current suppliers. With no clear picture of what the future holds, some have been stockpiling while others have been concentrating on keeping their options open and cash in the bank.
Far too many have been putting off investments until they have a clearer view of the post-Brexit landscape
This is understandable as there is no point in creating extra manufacturing capacity if they no longer have a market for whatever they manufacture. But it does mean problems. Growth and profitability are stifled, and opportunities are lost. Dire warnings from the International Monetary Fund of a 2-year recession has made businesses of all kinds wary – despite the fact that the UK economy is actually looking quite healthy.
The fact is, businesses need to invest - and perhaps now more than ever
But with the extension meaning yet more delays, the consensus is starting to be that businesses must do something. They can’t just keep the handbrake on any longer. They have to find ways to move forward - which is why they may be coming to you for guidance.
What can you tell your clients?
Many accountants have come to realise that Brexit may actually offer opportunities for their clients.
Exactly what you tell your clients may depend on the sector they work in, as UK-based firms that only do business in the UK may not be greatly affected by Brexit. However, EU imports have been falling – and businesses like China, The Far East in general and the US may be more than happy to step into the breach. They may even be able to reduce costs, once EU restrictions are removed.
Whatever form Brexit takes, it is likely that there will be fewer restrictions on imports from the rest of the world, which means you can probably advise clients that they need to start looking for those new potential suppliers now. It could mean cutting outgoings and a real boost to profitability after October 31st.
However, firms which carry out business between the UK and the European Economic Area (EEA) – whether they work through a ‘passport’ agreement or directly under standard EU legislation – could be affected, especially if there is a ‘no-deal’ Brexit.
Services such as those in the financial sector could potentially be among the worst affected, but any business with markets in EU countries might suffer if there are tariffs imposed.
Making the right arrangements now - such as opening offices in EU countries - could help avoid this type of issue
However, clients need to understand that the possibility of trade tariffs may actually be fairly small. The leaders for who the EU is a matter of principle may be prepared to impose border taxes designed to throttle trade. But the car makers of Germany, the wine producers of France and Italy – and all the other EU members who see the UK as a valuable market - will be less enthusiastic. They would reasonably expect the UK to impose similar sanctions in response.
Tariffs are only a possibility in the event of a no-deal. In fact, there could still be a very good chance of the UK remaining in a customs union after Brexit as the result of last-minute negotiations.
So it may be that your message to clients with strong EU connections is that now is the time to seize opportunities. The current pre-Brexit limbo might actually present opportunities for businesses prepared to take a bullish approach.
How can you find financial answers for your clients?
However, there is a problem with giving this type of advice, as making the most of any potential Brexit gains is likely to require some sort of funding, which could be something of a problem for many businesses.
Companies have avoided investing recently given the uncertainty, the chances of fresh political upheaval and fears for weaker economic growth. Some have stockpiled resources from the EU against the possibility of no deal and are now finding that it actually means additional costs for storage, maintenance and management.
Whether they are to make the most of any Brexit opportunities or tread water until some clarity is achieved, you will probably already be advising your clients that they may need to call on outside investment.
The solutions available
At Rangewell, we know the need for investment in UK businesses is growing – from the corporates down to SMEs. We understand that firms may be wary of financial commitments, in light of worries about interest rate hikes in some post-Brexit scenarios examined by the Bank of England.
Fortunately, we also have solutions. From Inventory-based Finance – which can use the value stored in stockpiles as a source of security for funding – to International Invoice Finance, we can help provide the financial answers your clients need to make Brexit work for them.
For those clients who want to explore new markets, we can offer Export Finance solutions too. Plus we can help access every other type of business finance.
We can work with you to develop a package of funding around your clients' needs.
Call us at Rangewell for the answers you need to help you turn Brexit into an opportunity for your clients. Our service is not only free for you and for them - it could mean an additional source of income for your practice.
Share this article
Discover your range of finance. Every type of finance for every type of business.
Our goal is very simple - to help businesses find the right type of finance as quickly, transparently and painlessly as possible.Find Funding