The UK exited the European Union on December 31, 2020. Leaving the EU has been a double-edged sword for British companies, who have experienced advantages and numerous difficulties due to Brexit. Combined with the COVID-19 pandemic, the results have only sometimes favoured UK companies.
Before Brexit, goods and services could be transported to and from Europe without border checks, tariffs and documentation. Now there exist customs regulations for goods coming in or leaving the UK from the EU, which a lot of people initially thought would impact industries that traded regularly with the EU, as well as businesses that relied on European supply chains.
Nevertheless, there have been certain benefits for UK businesses as a result of Brexit. We will be looking into these in the following paragraphs.
Brexit Made The UK Less Vulnerable to International Shocks
Various international issues such as the Russian invasion of Ukraine as well as the global pandemic have caused numerous global shocks, which the UK have been spared from due to Brexit. The Office for National Statistics (ONS) also supports this view by saying that the UK may become more resilient to global supply chain disruption than other economies, as a result of the supply chain changes which happened due to Brexit.
Fewer Restrictions From The EU
Some EU regulations no longer apply to the UK as a result of Brexit. Trading freely with non-EU markets (such as USA and Australia) is something that the UK can capitalise on now.
More Domestic Suppliers Across Industries
The ONS has stated that more and more businesses have been shifting to using more UK-based suppliers as opposed to EU-based ones, which can be a positive boost for business in Great Britain.
Increased Growth Opportunities
Emerging markets across the world, such as nations in Asia, Africa and South America, account for increased consumer spending every year. The fall in the value of the British pound would reduce the cost of British products in these overseas markets, which could make them more appealing and provide a boost to exporters waiting to take advantage of the situation.
Simplifying Reporting Burdens For Small And Medium Enterprises
The government announced that it would be looking into reviewing the thresholds retained under EU law as well as the filing requirements for businesses that file micro-entity accounts. This was done with a view to reducing the reporting burdens on many small companies. Moreover, it was also mentioned that the government would look into options that would enable companies to file their financial information more easily.
Helping Companies Access The Finance Needed To Develop And Expand
The government announced that it would stick to the morals of corporate governance, shareholder rights and transparency, which can help the capital-raising process for companies seeking to list in London. Many secure government grants are available across the UK.
In Conclusion
UK- based enterprises should be aware of the consequences that Brexit will likely have on their business. At this juncture, they should prioritise business cash flow and take actionable steps to avoid bad consumer debt.