Brexit - keep calm and make a plan
Professional resources for Brexit planning - regularly updated
Hard Brexit – ACT and CBI work together to answer your questions
If the result of the 2016 Brexit Referendum was a surprise for many, to find so much uncertainty over two years later is becoming a concern.
We have been talking with treasurers to gauge their views of the transition process whether soft (which has a transition period), or hard for which there is a cliff edge. Government has now started issuing Technical Guidance notices, with two financial notices issued as at 3 September, to set out what to do if there is no orderly transition, i.e. a hard Brexit.
Treasurers have started assessing the risks of a hard Brexit. These range from relatively minor for those working in world-wide multi nationals for who Brexit is a change to just one part of their remit, increasing for those whose revenues and costs are embedded into the EU27.
A key short term risk is liquidity. Most businesses can manage that by holding liquidity reserves either as physical cash or loan facility headroom. As governments continue to negotiate the break, questions are emerging as to how to process cash under the various scenarios emerging; for example, the possible impact of a change in import and export processes on VAT cash flow.
Longer term concerns will include raising debt. Many UK based corporates have been able to freely access Euro denominated funding and have been used to accessing European banks through their London branches. In the event of a hard Brexit, straightforward access may disappear. Furthermore, we have yet to fully understand how credit ratings will continue to be issued and maintained across the UK and EU27 ‘border’.
The ACT and the CBI are working together to collate questions being raised by corporates and to talk with regulators and financial services providers to identify answers where they exist.
The current Q&A can be accessed in the member-only resources section below.
We will update the schedule as questions are raised or answered.
Please submit any questions you have which are not represented on the schedule by addressing them to email@example.com
In addition to the member only Q&A, we continue to identify and share a wide range of content relating to Brexit. Please see the Resources, Guidance and Comment below for other publications on Brexit.