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Brexit for Small Business Owners

With Prime Minister Theresa May poised to trigger Article 50 of the Lisbon Treaty and officially inform the European Union of the UK’s intention to withdraw, we’re taking a look today at what this is likely to mean for British businesses in the coming months.  If all goes to plan, Article 50 will be triggered this week and, unless both sides agree on an extension, the EU and the UK will have two years to agree a deal before the EU’s treaties cease to apply to the UK.  As soon as the Prime Minister triggers Article 50 the EU will draw up guidelines to be used when handling the withdrawal of Britain from the EU.  However, any formal guidelines will need endorsement by a summit of the remaining EU countries.  The guidelines are a critical par4t of the Brexit process and will specify any priorities for the EU and the structure of the talks.

Once the guidelines are decided the EU must nominate the European Commission as its lead negotiator and develop the necessary directives for a detailed mandate which will need to be approved by EU ministers.  Britain will begin its preparations with the Great Repeal Bill, a legislative measure which will be outlined in the Queen’s Speech in May and will provide legal continuity for the UK following Brexit.  The Great Repeal Bill will repeal the European Communities Act of 1972 in incorporate existing EU law into UK domestic law wherever it is practical.  This will cover literally thousands of EU regulations that are directly applicable to the UK but are not in UK law.

At present none of us can say for sure what Brexit will mean for business here in the UK but we’ve seen some quite worrying warnings from business leaders and some developments that are causing concern.  Last week it was reported that the Goldman Sachs bank which employs 6,000 staff in the UK is starting to move staff out of London before the Brexit deal has been struck.  A spokesman for the bank revealed that the decision to relocate its workers is part of the bank’s contingency plan for the UK’s departure from the EU.  Then there was a report that Tesco, Britain’s biggest supermarket chain, is removing Heineken from its shelves due to Brexit!  Apparently the decision was taken to remove 8 Heineken brands because the brewer had to increase its prices when the post referendum inflation led to an increase in the company’s costs.

When it comes to smaller businesses (which make up 99.9% of the UK’s private sector businesses, with a combined annual turnover of £1.8 trillion), the decrease in value of the pound since the No vote has led to rising import prices leaving manufacturing companies, in particular, feeling the pinch.  The loss of key funding programmes like the European Investment Bank means that funding projects is becoming a worry, especially for High Growth Small Businesses (HGSBs).

Many business owners are now considering alternative finance options, such as Crowdfunding or peer-to-peer lending, both methods relying on raising finance from a collective pool.  Planning for the future is likely to remain a challenge for SMEs here in the UK over the coming years as we enter into an unknown economic situation.  Maintaining a steady cash flow is more important than ever right now.  Here at ACM we keep a close eye on business developments, so why not bookmark our website or follow us on Facebook or Twitter in order to keep up to date with all the latest news from small business here in the UK.