Sector Focus
Brexit doesn’t worry ‘scale-ups’
More than half of ‘scale-up’ businesses in the Midlands believe the Government’s approach to Brexit will not have a negative impact, according to a report by accountants Smith & Williamson. Smith & Williamson’s report
- ‘Dream Bigger: Scale-up Moment’ - also says 14 per cent of companies feel the approach may lead to business opportunities. ‘Scale-ups’ are enterprises
which have grown in either headcount or revenue by 20 per cent for three consecutive years. With Brexit looming, the
report says Midlands’ high- growth businesses are in bullish mood, with 59 per cent planning to take on new staff. In addition, 35 per cent report improved financial health among their trading partners. Smith & Williamson partner
Ray Abercromby said: “We have uncovered considerable differences between scale-ups and the rest of the business community, in both mentality and approach.”
Finance Sector Focus The latest news from the sectors that matter to business
Businesses to be hit by import VAT bombshell
Businesses face a massive Brexit cash-flow problem and should prepare for the worst, chartered accountants in the West Midlands have warned. Once the UK leaves the single
market, VAT at 20 per cent on imported goods will have to be paid in advance rather than once they have been sold. That will force companies to pay
the money up-front even if – as some experts fear – their goods are held up in customs for days, or possibly weeks, before they can be moved. Several speakers drew attention
to the issue at a meeting organised by the Institute of Directors and the Institute of Chartered Accountants in the West Midlands.
‘VAT at 20 per cent on imported goods will have to be paid in advance’
There was frustration that, with
less than a year to go, there was still no clarity over how Brexit would affect businesses. Allie Renison, the Institute of
Directors’ head of Europe and trade policy, said: “One major issue is the threat of having to make upfront VAT payments which could have serious cash-flow implications for some businesses. There needs to be special VAT arrangements between the UK and the EU. “If the Government has indeed
made up its mind on not having a customs union, it should issue public guidance.” Onelia Agnelosanto, director
global trade for accountants Ernst & Young, said many businesses are looking at the worst-case scenario of a hard Brexit where World Trade Organisation rules would apply. As well as the VAT issue,
administration costs would run into millions of pounds but Ms Agnelosanto added: “It’s not the financial cost that worries them, it’s the cost of goods being held at the border.
“Some businesses are looking at
re-routing to other ports, not Dover but Liverpool, for example. Businesses are putting in special procedures to try and get around these additional duty costs.”
60 CHAMBERLINK September 2018
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