I was a little underwhelmed by the £3bn that the government has earmarked for measures needed as we exit the European Union.
Perhaps there are things going on in the background that we’re not privy to, but Brexit is such a huge and complex issue that £3bn doesn’t strike me as being anywhere near enough.
Over the next year or two, quite a few other big changes will affect businesses at the same time as the Brexit transition occurs. I’m not convinced that much in the way of mitigating risk management is being applied to the scheduling of all these changes across the UK, which could make things rather difficult for businesses.
We already know that we have Making Tax Digital in the pipeline. And the General Data Protection Regulation will come in very soon as well. Both of these will require big changes in the way businesses operate. We’ll also see some changes down the line as a result of the Taylor review into off-payroll working; inevitably, it will mean changes to the tax system to bring things more into line, but thankfully we didn’t see any announcements on that in the Autumn Budget. We should expect changes to come in just after Brexit.
Fortunately, the Office of Tax Simplification’s recommendation to dramatically reduce the VAT threshold has also been put off, but there will clearly be a review. And that’s before we get new customs systems and the Apprenticeship Levy. With all these changes on the horizon, and in the run-up into Brexit, I do worry about the SME community in particular. I’m not sure many of them know what’s coming their way.
Many of our members work in or with SMEs. Thousands of you work in their finance departments or represent them through your practices. Those businesses will really need your talents in the run-up to and aftermath of our exit from Europe. No matter what the final outcome, Brexit will be a massive adjustment. We need to protect our small and medium-sized businesses; they will be a crucial cog in our economy as we find our new place in the world.
Can CFOs save the planet?
We’ve just signed up to the Task Force on Climaterelated Financial Disclosures, which is assessing the physical, liability and transition risks associated with climate change. Many of its members are CFOs of global corporations; the task force is looking at the issue on the widest possible scale.
This is an important area: climate change will have material consequences for businesses. The government is putting measures in place to tackle some carbon and climate-change issues. It’s all a bit lacklustre at the moment, but at least it shows willingness to engage with the issue.
This article appeared in our Jan/Feb 2018 issue of AT magazine.
Mark Farrar is the Chief Executive of AAT.