From briefing clients to thinking more strategically, here are the skills accountants will need to arm themselves with in order to tackle the coming Brexit busy period…
Suddenly, it’s here. If you’ve watched TV news or scrolled through newspaper websites in the past week or so, you may have noticed pics and footage of the mask-clad likes of Angela Merkel and Emmanuel Macron poring over documents in Brussels.
It’s a jolting reminder that there is another big event going on that would have dominated headlines this year: Brexit.
Webinars on demand
Register for key webinars from AAT Future Finance 2020 online. Covering how to plan for crisis, embrace change and seize opportunities.
In January, the UK left the EU. And from 31 December it will leave behind conveniences of the EU single market and customs union. The weeks leading up to the end of this transition period (which the UK has been in since leaving the EU in January) are set to be a fraught time for businesses, many of whom will be dealing with the tremors of Covid-19.
Those working as accountants are set to be busy too, advising clients and C-suite staff on what actions to take, informing them of VAT changes and factoring in any potential disruption into their cashflow forecasts.
You can find more information about what you need to do for your clients and company here. But how can you prepare yourself? What skills do you need to equip yourself with? And is there anything you should be doing before sitting down with your business for a chat? Here, we speak to leading experts to find out…
Assess your own needs first
Before setting up Zoom calls with your client, think about your own business and how Brexit is likely to affect it. Do you employ workers from the EU? Are your staff Brexit buffs or would they benefit from some training sessions? And do you have a network of advisers (say, customs and VAT experts) that you can call upon? Whatever happens, remember that working for a practice is an advantage in itself. “The nature of our business [as a practice] means that it helps us see all the individual quirks and peculiarities that companies might face,” says Andy Wallis, corporate and international tax partner at chartered accountants/financial advisers Kreston Reeves.
Perform client ‘triage’
When the consequences of Brexit begin to take effect in January, you’re going to be busy. Clients could be ringing you up, worried about their goods being delayed at ports or wondering how to do a customs declaration – all at a time when you’re likely to be neck-deep in year-end accounts.
To make your workload easier, categorise your clients by those businesses who you think will be most affected by Brexit. How often do they trade in/with EU countries? Do they need to hire extra staff or review their contracts to deal with the changes? And do they work in sectors likely to be affected by delays (e.g. perishable goods)?
Read our guide on how to prepare for life after the transition period.
Get to know the business inside-out
To give the best advice, spend some time analysing any part of the client’s business (or company that you work for) that could bear the brunt of Brexit.
“Start by identifying how Brexit will impact the business,” advises Lucy Sutcliffe, national customs duty director at Baldwins Accountants. “The best way of doing that is looking at how the supply chain and end-to-end supply chain is set up. What does that look like in terms of value and trade? What measures can you put into place so they won’t be paying UK import duties that become liable? What customs declarations will they need to submit? Will they need help from an agent with this?”
How to speak to your clients
When it’s time to speak with your clients/business, you might hit a stumbling block. Brexit is so complex, one German academic study found it was more complicated than the 1969 moon landings. Emailing the AAT checklist (on Knowledge Hub) to your client/business should definitely help.
Amanda Tickel, international tax partner and Global Brexit lead at Deloitte, recommends sketching a framework for discussion first, spanning areas such as:
- people (EU employees, business travel);
- supply chain and customs;
- trade access;
- legal and regulation (data transfers, compliance) and
“Make sure you have a framework, otherwise you’ll end up having a very long meandering conversation about Brexit,” she says.
Brexit is a famously divisive subject too. “The best way to approach it is that not all change is bad,” advises Sutcliffe. “Brexit is going to happen in any event, and whatever the outcome, it won’t satisfy a certain percentage of people in business.”
Covid-19 has clearly strained many companies’ coffers. The disruption caused by Brexit, whether it’s delayed payments, late delivery of goods or currency fluctuations, could also hit these companies hard, perhaps even destroying them. Having a healthy cash flow in the months ahead will be vital.
Because nobody can predict what will happen (negotiations are still ongoing with the government angling for a free-trade deal), Wallis recommends, “accountants need to scenario-plan; any cashflow forecasting will need to be based on a huge number of different scenarios.”
Scenario-planning may help you spot any areas of the business that could be prone to cash depletion should Brexit prove to be tumultuous.
“Businesses will need to consider whether there’ll be additional costs,” advises Sutcliffe. “Can they renegotiate with the supplier? Could they pass on these costs to the customer, which would make them less competitive? If neither of these options is a possibility, they may have to consider absorbing these costs into the business itself.”
Dealing with apathetic businesses
What to do if the company CFO just shrugs his shoulders when you mention Brexit? Or your client is too preoccupied with dealing with coronavirus?
“Make your client aware there are changes afoot and warn them of any additional costs (duty costs, resources, admin costs),” says Sutcliffe. “It might be that the business decides that they’ll wait until January before they take any action. But they could be missing out on customs provisions that reduce import duties as a result.” And if they’re really ‘meh’ about the whole thing? “There have been many references to ‘falling off a cliff-edge’,” she says. “Try drawing that analogy.”
“It’s important to think with a wider perspective,” says Wallis. “For example, if your client deals with fresh produce/, there could be logistical problems, such as changes in the shipping processes and delays at ports.
Keep up-to-date with any developments
The news on Brexit changes almost on a daily basis. Setting up news alerts and/or reading the following sources should help:
Christian Koch is an award-winning journalist/editor who has written for the Evening Standard, Sunday Times, Guardian, Telegraph, The Independent, Q, The Face and Metro. He's also written about business for Accounting Technician, 20 and Director, where he is contributing editor.