By Mr Bankruptcy
21st March 2019
How could Brexit impact on your business?
When I was first introduced to polite society, I was told never to bring up sex, religion and politics at the dinner table. We’ve added another taboo subject to the list since then. I’ve lost count of the networking events I’ve been to where a speaker starting to get hot under the collar is shown the yellow card and warned not to use the “B” word. Not bankruptcy but something worse – Brexit.
I’ve always believed that observing these taboos makes for very dull dinner party so, in that spirit, I’m just going to wade into the Brexit debate.
Disappearing down a rabbit hole
I sympathise with the minister who compared Brexit in Parliament to Alice in Wonderland, it’s all descending into the realms of nonsense; teams of lawyers playing “Spot the Difference” between new and old versions of the May deal, meaningful votes that don’t mean anything and deadlines that fade away like the Cheshire Cat.
Now people are arguing that referendums are a bad idea so we need another one. Does anyone in parliament realise how close they’re coming to breaking a constitution that’s served us pretty well for three centuries? They’re like a bunch of toddlers allowed to play with Gran’s best Crown Derby dinner set – oops, there goes the family heirloom.
If at first you don’t succeed…
No matter what people voted for individually, I can’t help but feel like a second referendum is just blaming us all for getting it wrong. The EU has a track record though; the good people of Ireland and Denmark were both asked to try again after rejecting EU treaties. And Norway’s been asked twice to join the EU by its leaders, but they’ve so far refused.
Being a fan of Weimar-era political theatre, I can’t help but be reminded of Bertolt Brecht’s quote: “would it not be simpler if the government simply dissolved the people and elected another?”
Anyway, let’s see what happens in this country.
Speaking of which, and moving to more steady ground, I can’t pretend to know any more than the next person what effect a Brexit would have on the UK economy, though there will surely be some. However, I am very interested in how it could impact on business solvency.
● Frictionless trade: Brexit could increase business insolvency in the UK by 14%, compared to a smooth transition, according to one report. The introductions of tariffs, will put additional burden on UK businesses in terms of time, process and costs.
● Border controls: A survey of more than 1300 UK and European businesses predicted that delays caused by border controls could lead to 10% of firms going bankrupt, even with 30-minute delays. And the longer the delay, the great the number of potential bankruptcies.
● Less inward investment: According to Forbes Magazine, the potential for economic downturn in the UK and the fact that the UK may no longer be eligible for EU funding may lead to less inward investment, increasing the financial strain on some businesses and affecting their ability to repay loans.
● Debt recovery: There may be little change in how business to business debt will be collected following Brexit, but if it becomes more challenging, delays in payments could severely impact businesses.
If you are concerned that your business debts will be impacted by Brexit or the uncertainty surrounding it, seek advice as there may be definite decisions and actions you can take to prepare for whatever outcome – after all, it’s not like you’re a politician.
James Rosa Associates
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