Protecting your business – a guide for manufacturers
Written by Chris Gumley FCA ATII, Head of Tax, Naylor Wintersgill
Keeping up with the day to day pressures of running a business in the manufacturing sector can be difficult in itself but in a time where there is ever increasing uncertainty around Brexit, it’s important that you find time to consider some practical planning steps you can take to help to protect the long term success of your business as the 29th March 2019 ‘exit day’ looms.
Although planning for Brexit seems like an impossible task, there are number of challenges that a manufacturing business may come across and you should look to have contingency plans in place that are flexible enough to cope – despite the diversity of potential outcomes. The EEF reports that 45% of all UK exports are from manufacturing and as the EU is the UK’s largest trading partner, manufacturing business owners really need to start thinking about life post-Brexit.
Key areas that you may wish to consider
Movement of Goods
HMRC are proposing a phased introduction of a new Customs Declaration Service (CDS). Regardless of the outcome of the EU exit negotiations, have you started to think about the processes and systems that may need to be in place?
Supply chain mapping should be an important part of your Brexit planning. To help you assess the possible tariffs that may apply you should know where your inputs come from and what product category they fall into.
For many businesses that have known only the single market and have not previously been subject to a customs environment for their trade with the EU, a transition to customs procedures could come as big surprise.
It is possible that more complex port procedures could come into force tying up additional working capital for you as a manufacturing business importing goods and VAT (and any tariffs) might be payable at port on EU imports. With potential reduced financial certainty, it’s more important than ever to have detailed cash flow projections in place to help you manage the possible peaks and troughs in your cash balance effectively, ensuring your business stays on track and continues to meet your financial objectives.
Will your contractual agreements be affected as a result of Brexit? Do they clarify the terms for trade across EU borders including how VAT is dealt with?
With uncertainty increasing, the rights of EU citizen employees in post-Brexit UK may need to be considered as part of your planning process.
The UK may continue as a full member of the European standards system following Brexit but this is not guaranteed. As a manufacturing business, consider starting to ensure the database of standards that apply to you are up to date and accessible to your team.
About Naylor Wintersgill
Naylor Wintersgill is the leading firm of independent chartered accountants in Bradford city centre and we have been passionate about supporting our clients, many of whom are part of the local manufacturing community, to grow and succeed in Bradford for over 100 years.
If you would like to find out more about how Naylor Wintersgill could proactively help you and your business progress in these changing and uncertain times, visit the website www.naylorwintersgill.com to see full the range of services and support on offer.