Prime Minister Theresa May has announced that the UK will start the process of leaving the EU (Brexit) in early 2017. Turner Little considers what this could mean for your small business going forward.
Triggering Article 50
On 23rd June, the UK voted with a majority of 51.9% for Brexit. This does not mean that the UK immediately left the EU, as this process takes two years under the Treaty of Lisbon – an international agreement which forms the constitutional basis of the EU. If a country wishes to leave the bloc, they must first trigger Article 50 of The Treaty of Lisbon, starting the two-year withdrawal process.
Many Brexit campaigners called on then-Prime Minister David Cameron to trigger Article 50 immediately. Cameron declined, as he resigned after the vote, leaving this duty to his successor Theresa May. Speaking recently at the Conservative Party Conference, May said that she will trigger Article 50 by the close of March 2017, so the UK will leave the EU by summer 2019.
Benefits of Brexit
It is important to note that in in some ways, Brexit could benefit your small business. After the vote, the value of the Pound dropped to its lowest point since 1985, when measured against the US Dollar. A lower pound could decrease costs for exporters and increase tourist flows into the UK, bringing new business if you trade within this industry, as well as boost the nation’s property market.
Meanwhile, leaving the EU, experts have said, could reduce the regulatory burdens on your firm and allow you to broaden your talent pool beyond other European states. During her speech, May said that her government will strike a Brexit deal which will make the UK “a fully independent, sovereign country.” In light of this news, many experts are now doubling down on these benefits of Brexit.
Exploring the benefits
If you are an exporter, it would be wise to start locking in forward contracts now, to make serious gains from the Pound’s performance. Also, the UK has become a more cost effective holiday destination for foreigners, as they will now receive more Pounds for their currency, so you could soon see your customer base increase further if you operate in tourism. The lower Pound could also benefit your business if you trade in property, as UK real estate just got cheaper for overseas investors.
Furthermore, Brexit could allow the UK to remove many EU regulations, making it easier for you to grow your business. As a result, the UK’s immigration laws may also change. Your firm may be able to hire more skilled professionals from countries like the US. If the UK chooses to introduce an Australian-style point system for immigration, your company could benefit from a higher quality of candidates.
Handling cash flow
It is becoming increasingly clear that Brexit could create a favourable trading environment for your business. This could allow you to reap significant benefits, potentially strengthening cash flow. It is vital that your firm has the financial infrastructure to handle any potential increase in cash flow. As registered bank intermediaries, Turner Little can supply the UK business banking advice, that your firm requires to fully take advantage of the benefits of Brexit.
Turner Little
Turner Little was founded in 1998 and it has since become a well-established UK based professional Company Registration Agent, Registered Bank Intermediaries and Business Consultants, as well as Trust provider. You can receive our monthly newsletter by signing up using the form below.
