Brexit: we need solutions for the profession

Brexit Insights
By Alice Telfer, Head of Business and Public Sector, ICAS Policy Leadership

29 March 2017

ICAS members have three key messages for the government, on the historic day that the UK officially signals its withdrawal from the EU.

It is done. Prime Minister May’s letter has been delivered to the EU, officially notifying the EU of the UK’s intention to leave. But business and the accountancy profession have unanswered questions. Here, ICAS members set out their three key messages for government.

1. Retaining talent is vital

A recent parliamentary report Brexit: trade in non-financial services March 2017 confirms that the UK is the second largest exporter of services in the world.

The EU receives 39% of the UK’s non-financial services exports.  Professional and business services are a significant and growing component of this.

Business services are the UK’s largest services export, accounting for 44% of all the UK’s trade in non-financial services. After financial services, they also provide the UK with its biggest trade surplus...” [para 83 of the March 2017 report].

The ability to recruit and retain the right people is vital if the UK is to hold on to this economic success.

Indeed, in a recent survey of ICAS members, respondents were asked to rate the relative importance of different negotiating objectives. CAs in larger organisations said “the ability to hire EU nationals for UK roles” was their second top priority.

2. There needs to be recognition of mutual regulatory frameworks and qualifications

Building trust in business and making the UK an attractive place to do business is an important component of a thriving economy, which in turn creates the funding for public services.

Business is supported by an eco-system of regulation, reporting and investment which relies on professional services.  Mutual recognition of our regulatory frameworks is vital for the profession to continue this support across borders.

We believe that adherence to global norms and standards (where appropriate) positions the UK better to participate in international trade.

In audit and financial reporting the UK is already aligned with international standards, in the field of corporate governance, the UK is a leader in good practice.  To enhance certainty and maintain stability, we support preserving the existing framework for financial reporting, audit and corporate governance.

With regard to trade in services, we believe it is essential to maintain and build on current levels of mutual recognition of qualifications and regulations for professional services firms and individuals.

3. Free flow of data between the UK and EU is essential if international trade is to flourish

Ensuring the free flow of data between the UK and the EU is essential to the flourishing of trade in services across borders.

Data analysis and transfer is a core component of advice-based professional services.  We advocate maintaining the ability for data transfer to support trade across the EU and equivalent standards in data security, while we discourage deviation from the EU’s GDPR regime and 4th EU Anti-Money Laundering Directive.

What the government needs to consider during negotiations

  • Avoid short-termism: To obtain a successful transition deal for trade, the government needs to take a long-term approach to Brexit negotiations.
  • Consider the timescale: It is hugely ambitious to expect to negotiate a successful transfer in two years and it risks a detrimental effect on the economy.
  • Provide certainty: For the UK to be the most attractive and trusted place to set up, grow and conduct business it needs to provide stability for business.
  • Reform public services: The UK needs to maintain momentum on public sector transformation to best meet future financial and demographic challenges which risk straining the sustainability of public services.
  • Don’t crowd out other key policy areas: While much attention is on those parts of the economy which are directly impacted by Brexit, we must not forget the significant contribution that other sectors, such as pensions and charities, make to a robust economy.

Have your say

More than 1,000 CAs, based throughout the UK, the EU and worldwide, took part in the first of a series of ICAS Brexit surveys, which seek to assess the degree of optimism (or otherwise) of members regarding the impact of the Brexit process so far, and the likely impact of the UK leaving the EU.

Anton Colella, CEO of ICAS, said: "This survey provides valuable insight to politicians and civil servants about what is happening in the real economy. The results reveal that CAs are still extremely concerned about being able to hire and retain vital talent from the EU in their businesses. We have taken these findings to government, and intend to use future Brexit surveys to identify trends on key issues.”

ICAS is looking to its members for their opinions on Brexit. As leaders in business, finance and politics, the voices of CAs need to be heard now more than ever. Get in touch with ICAS to share your views, stories and opinions on Brexit and beyond.

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