Market access

The form of the future trading relationship between the UK and the EU will have a substantial impact on many organisations. On the one hand is the matter of ‘license to operate’, should a future trade deal mean that a company’s products or services no longer have full rights of access to the EU market. Additionally, divergence in standards or failure to agree regulatory equivalence could effectively restrict market access by adding cost and complexity to supply chains.

Dependent on the deal struck, it is possible that routes to the EU market will become less efficient for UK companies and vice versa, with costs associated with accessing the market including customs duties and other levies impacting the cost of getting goods to market and affecting supply chains. The EU market will still be accessible, but associated tariffs and quotas on goods and services will impact profitability and scale of market. Customs border checks and country of origin requirements will also potentially create delays, inefficiencies and further costs to current movement of goods or services.

Given the fundamental implications of changes to access to the Single Market, business should consider potential scenarios, starting with the default WTO position and consider changes to accessibility of and routes to market, supply chain optimisation and the impact of increased cost and complexity in trade.

What’s your focus?

Tax

In the short term, the vote in favour of leaving the EU will have little, if any, immediate impact on indirect or direct taxes. Few changes are likely to occur while the exit negotiations take place. The potential future relationship between the UK and the EU is unclear. A close association is likely to have less impact on many tax issues, but a more remote link will have a greater impact. For indirect tax, there is likely to be a significant impact on Customs Duty and VAT, where the UK will need its own taxation systems. Transactions to/from other EU states would become imports and exports with potential impacts on systems and cash flow. For direct tax, which have always been in the competence of member states, there would be fewer immediate impacts