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Put Brexit transition planning on the radar, ICAEW warns

17 December 2020: A light touch approach as businesses adjust to new rules and a beefing up of support for SMEs are among a list of requirements submitted to the BEIS Committee session on Brexit Preparedness by ICAEW this week.

Responding to the committee’s call for evidence, ICAEW warns that Brexit preparedness isn’t on the radar for many businesses as they deal with more pressing business concerns thrust upon them by the pandemic.

ICAEW says certainty from a deal is needed at the earliest opportunity, bearing in mind that many businesses will not start their preparations until more is known. “They do not have time to look at things as they develop and alter; they will look at it when negotiations come to a conclusion, but that leaves them little time to prepare,” the submission warns. “In the absence of a deal, a light-touch as businesses adjust to a new world is needed; adjusting operations to deal with no adequacy, or having to pay tariffs for the first time, will take longer than the mere days remaining.”

It also calls for clear signposting of advice for SMEs, including bolstering intermediaries, brokers and freight providers to ensure SMEs can access them. ICAEW also says efforts must be made to ensure the long-awaited UK Shared Prosperity Fund – first touted in 2017 as a replacement for EU Structural Funds – can deliver and there is not more of a gap in funding or clarity.

The call for evidence set out to hear what measures, advice and support businesses need from the government, even at this late stage, to help mitigate the disruption they are likely to face from 1 January 2021. 

“Deal or no-deal, Brexit will bring huge changes for businesses at a time when they have been hit by the impact of coronavirus restrictions and, crucially, trying to deal with a lack of clarity from government on many of the Brexit trade and regulatory issues which are coming down the track,” Darren Jones, Chair of the Business, Energy and Industrial Strategy (BEIS) Committee said.

Commenting on ICAEW’s submission John Boulton, its Director of Technical Policy, said: “Businesses haven’t been able to dedicate the bandwidth to this under current conditions. It is vital there are clear communications from business to government and to representative bodies like ICAEW to identify issues as they emerge in what will be a critical and fast-moving environment.” 

The Business Confidence Monitor published in November by ICAEW in collaboration with Oxford Economics found that confidence is firmly negative, with customer demand, late payments and transport problems highlighted as rising issues. 

The Monitor, which gauged the views of 1,000 Chartered Accountants also flagged up fatigue at the amount of information and changing guidelines they are having to deal with in this challenging year. “Resources have been severely depleted, and many do not have the mental, financial or physical capacity to exert on Brexit preparation,” it warns.

Rachel Underhill, Senior Business Strategy Manager at ICAEW, said ICAEW was thankful to members who had given their views so freely on the difficulties they faced. “We’re acutely conscious that the work only really starts here,” she warned. “We have a really important role to play in communicating the practical issues members face to policymakers and we want to continue to hear from them as the transition ends.” 

ICAEW is asking members to make Brexit preparations, despite widespread uncertainty over the rules that will apply come 1 January 2021. As part of its guidance to members, ICAEW has a Brexit Hub with a range of resources aimed at helping members through the end of the transition period and beyond. It includes a Brexit checklist outlining key areas likely to have the biggest impact. For more information click here.