Brexit - A Member's View - Gareth Collyer AMInstSCE
As a Brit working for a European based manufacturer, the view is very different from a lot of other people in our industry. I am not looking at how I can maximise my opportunities outside the EU but purely at “what is going to hurt my business in the UK”.
The big problem here is the uncertainty. We have no idea what the implications of a hard Brexit will be in terms of Tariffs being placed on goods imported into the UK, what possible delays there may be with shipping into the UK and how the unavoidable implications of VAT will effect sales (currently UK companies pay no VAT on imported goods from the EU. This helps with short term cashflow).
Looking at the first point Tariffs, the only mention even close to our industry is for musical instruments. The most up-to-date figures for imports to the UK are from 2015!!! Based on that figure, the UK imports approximately 99 million euros of equipment with a potential tariff bill of 3 million based on a WTO tariff figure of 3.2% . This may be higher, but as a manufacturer from France do, I increase retail prices or take a hit on my margin ? source : https://www.civitas.org.uk/content/files/potentialpostbrexittariffcostsforeuuktrade.pdf
The next issue is transport. Our current shipping companies are telling us that in the worst case we can expect a delay of 14 days for exports to the UK! In the current climate of “just in time“ orders, this will be a problem. I could of course open a UK warehouse and stock goods in the UK but that will not be
financially viable due the increase in operating costs.
The third issue with the VAT effect on cash flow, there is no solution. That will have to be accepted as a fact of life. The problem being this will have a major
impact when companies make investment decisions. The interesting thing is that the UK based manufacturers will not be that much better off. The products will be made in the UK, but a large amount of the component parts are not, thereby leading to a stealth increase in operating costs. This will also include the VAT problem coming the other way.
All of this is finished off with not knowing how a Brit working for an EU company can still be employed if all the current rules change (currently pay
PAYE in the UK and the European tax authorities work it out between them). If we go with a hard Brexit in October there could be a large amount of people not getting paid on 1st November and a lot of Brits working in the EU suffering the same problem.
Gareth Collyer, AMInstSCE is the UK & Eire Sales Manager for NEXO and is Vice-President of the ISCVE.
