Scottish Chambers of Commerce comment on Brexit Technical Notices
Commenting on the publication of the UK Government’s technical notices aimed at giving businesses and consumers advice on the implications of a ‘no deal’ exit from the European Union, Liz Cameron, Director and Chief Executive of Scottish Chambers of Commerce, said:
“The publication of the technical notices, whilst long overdue, are a helpful start for businesses to plan and prepare in the event of a no UK-EU deal on 30th March 2019. More detailed information is still needed if businesses are expected to trade as smoothly as possible in such a scenario, and Ministers must outline the steps being taken to limit delays or increased red tape.
“It is disappointing that businesses are still expected to wait for several weeks for further guidance and clarification. With the UK’s imminent exit from the EU, we cannot afford any more delays which impacts on the ability of business to plan, prepare and trade.”
On VAT for businesses:
“The Government has responded to the call from the business community on import VAT by introducing postponed accounting for imports, covering imports from EU and non-EU markets. By acting in the interests of the private sector, the Government has avoided the prospect of businesses having to pay VAT immediately on each cross-border transaction, which could have impacted on cash flow.”
On trading with the EU and customs arrangements:
“In the event of a no-deal scenario, it is looking likely that businesses trading between the EU and the UK will be hit immediately with increased customs controls. Businesses will have to be ready for customs declarations, safety inspections, tariffs and new licenses, all from day one, and preparation for this possibility will have to begin now.
“Despite some practical advice in the notices, there are areas which remain to be addressed. We will continue to pose questions on the practicalities of these arrangements, and the ability of the UK’s customs system to manage the substantial additional administrative burdens that would arise from this transition.”
On banking, insurance and other financial services:
“The technical notice on financial services outlines a commitment to ensuring a temporary passporting arrangement for EEA firms, allowing them to continue to operate financial services in the UK while they seek full authorisation from UK regulators.
“While the UK Government is acting to provide some clarity of direction for EEA firms based in the UK, UK firms currently passporting into the EEA, and their customers, continue to face uncertainty. The impact of this highlights the need for a constructive deal to be reached, but continued uncertainty around this area has already caused several firms to press ahead with contingency plans, by opening additional subsidiaries or moving staff.
“The notice also outlines some of the challenges that UK businesses and consumers will face in light of a no deal, with the potential of more expensive, slower processing for Euro transactions, increased costs for card payments, and surcharges on transactions. Outcomes such as this, which diminish the competitiveness of UK firms and the spending power of our consumers, must be avoided.”
On guarantees for EU-funded programmes:
“EU-funded projects provide substantial benefits to businesses, our communities and our leading research institutions. It is positive to see the UK Government reiterate its commitment to ensure that UK based organisations are guaranteed funding across a range of EU initiatives, with many being guaranteed up until 2020. SCC welcome these commitments, but the government must ensure that schemes set up to guarantee funding are practical and streamlined, to avoid further disruption.”