New Government - new no-deal planning?
David Wood highlights the urgency to prepare for a no-deal Brexit and the sources of guidance which are available.
With the new and very different political leadership that has emerged over the last week, there is a clear determination for the UK to leave the EU on 31 October 2019 – less than 100 days away. And with Michael Gove appointed as Minister tasked with ‘turbocharging’ no-deal Brexit preparations within the Cabinet Office, it is likely that such preparation activity will increase in the next few weeks.
Many businesses have already undertaken some preparation for a no-deal departure. Whether this would be a worst-case scenario or merely a minor irritation, there is now a new urgency for all businesses to consider what the likely impact would be for them and to take the necessary preparatory action to ensure the survival of their business and to maintain supplies and services to customers and clients.
There have been a number of ICAS articles published over the last year or so, increasingly on the impacts of a no-deal. Many of these have referred to other sources of guidance and in particular to guidance published on the Government website.
Much of this guidance remains valid, even though it might refer to 29 March 2019 departure. Government guidance, however, was issued under a Government which was taking a very different approach to Brexit than is now apparent, so care is needed in interpreting matters of Government policy for a 31 October 2019 departure.
General Brexit guidance
The Government issued a large number of Technical Notes on preparation for Brexit over the last 12 months. These were highlighted in an overarching ICAS article in October 2018, Brexit: prepare now for no deal, and referenced by a number of other ICAS articles during 2018.
Access the full range of available ICAS articles on Brexit for more general Brexit guidance from ICAS.
The following guidance is available on the Government website:
- Specific self-tailored Government guidance for your business
- The Government’s main Brexit page
- Technical Notes
Brodies, the law firm which sponsors The CA’s Brexit Tracker Survey, has several guidance pieces on its website. Its checklist of nine key questions for no-deal preparation was highlighted in a January 2019 ICAS article, Nine steps to prepare for no-deal Brexit.
The Institute for Government also has a number of useful Brexit articles and explainers on the Brexit section of its website.
The CBI report ‘What comes next? The business analysis of no deal preparations’ published on 29 July 2019 provides a comprehensive analysis of no deal preparedness and makes recommendations to the UK Government, the EU and the business community, and on joint action needed between the UK and the EU. The key recommendations for the business community are:
- Resume no deal preparations immediately.
- If resources permit, make plans to communicate additional mitigation needs to the UK Government and the EU by the start of September (focusing on larger companies and business organisations).
- Have agreed and reinforced communication routes into government by mid-October (again, larger companies and business organisations).
- Prioritise people if no deal occurs – i.e. support EU citizens in the UK, but also UK citizens in the EU.
These recommendations to business are set out more fully on pages 27 and 28 of the report.
Accounting and auditing
The UK Government issued two guides on 24 May 2019 to help companies and audit firms plan for a no-deal Brexit:
The ‘accounting’ guidance focuses on how companies can comply with UK accounting and reporting requirements after the UK leaves the EU. It is therefore directed towards UK incorporated companies and groups, and EEA companies and groups.
The ‘auditing’ guidance focuses on what audit firms, auditors and those with an audit qualification should do to prepare before the UK leaves the EU. It is directed towards UK auditors, auditors with UK qualifications and UK audit firms, and also EEA auditors, auditors with EEA qualifications and EEA audit firms operating in the UK.
A May 2019 ICAS article on the accounting and auditing guidance is also available.
The DCMS Data Protection Economic Task Force has recently contacted key parties to remind them of the available guidance around data protection mitigations in the event of a no deal. (This Task Force was established as part of a wider effort across government to ensure that the country was prepared for the event of a no-deal exit from the EU.)
In the event of a no-deal exit, The Task Force does not expect the European Commission to have made adequate decisions regarding the UK at the point of exit. Therefore, in order to continue the legal transfer of personal data from the EEA to the UK, alternative transfer mechanisms will need to be in place.
The following provides links to the available guidance:
- A Government summary of the guidance on using personal data after Brexit.
- The Information Commissioner’s Office (ICO) Leaving the EU – six steps to take to start preparing for data protection compliance if the UK leaves the EU without a deal.
- The ICO main page for Brexit resources.
- A February 2019 ICAS article on data protection.
Tax, VAT and HMRC letter to business
ICAS will keep its members informed on key Brexit-related developments over the next three months, especially those which are of specific relevance to the profession and which might not be well covered in mainstream media.