10 May Brexit – ‘3 years on’ And Impact On UK Business
The business environment in the UK has been significantly impacted by Brexit. Following the UK’s exit from the EU’s single market and customs union, businesses that conduct business with the EU are now subject to higher trade barriers, tariffs, and restrictions. The limitations on mobility have also made it difficult for UK companies to hire workers from the EU, creating a labour shortage in a number of industries. The numerous ways that Brexit has impacted UK companies will be covered in this article.
Brexit’s Influence on Trade
Businesses that purchase products from the EU, as well as those who export goods to the EU now, incur higher costs since the UK is no longer bound by the trade laws and regulations of the EU. UK businesses exporting to the EU must also abide by new legislation and customs processes. Also, a number of EU countries have increased their export restrictions and taxes on UK products, making it more expensive for British companies to do business there. Corporate costs have gone up, trade restrictions have slowed border crossings, and some EU firms have stopped exporting to the UK, which has had an impact on supply chains for UK firms.
Impact of Brexit on Regulations
Businesses in the UK are no longer bound by EU rules and legislation as a result of the UK’s exit from the EU. Before Brexit, EU rules and legislation applied to firms in the UK. Brexit, however, means that the UK is no longer compelled to abide by EU rules and legislation. The UK has instead enacted its own rules and legislation.
Businesses in the UK are now forced to operate in a new regulatory framework, which has created uncertainty. Confusion and ambiguity have resulted from the adoption of new standards and rules, especially for firms that operate internationally.
Impact of Brexit on the Labor Market
The UK labour market has been significantly impacted by Brexit. The loss of free movement between the UK and the EU is one of the significant changes brought on by Brexit, which has made it more difficult for UK firms to hire employees from the EU. As a result, there is now a skilled labour shortage in numerous industries.
Among those most negatively impacted by the changes to the labour market are businesses that significantly rely on EU employees to cover skill shortages or satisfy labour demands. These companies are having trouble replacing the departing EU staff with new personnel from other sources. For some businesses, the lack of trained personnel has also increased labour prices and decreased production.
Businesses now must adjust to the new immigration laws and look into other labour sources in order to meet the skills and labour shortfall. This entails putting money into upskilling programs for current employees, luring domestic people into the field, and scouting out new overseas markets to find workers.
Impact of Brexit on Investments
Foreign investment in the UK has been impacted by Brexit, particularly in sectors that are viewed as high-risk. Investment in the UK has been further reduced by the fact that some businesses have relocated their operations to the EU as a result of the UK’s withdrawal from the EU. Companies that rely on investment to grow and expand have suffered particularly badly from the decline in international investment. Particularly enterprises usually use financial incentives to promote growth and expansion. It has become more difficult for startups and other enterprises to obtain the funding they require due to the drop in accessible investment.
Effects of Brexit on the Supply Chain
Brexit has had a big impact on UK companies’ supply chains as well. These supply chains, which are used by many UK businesses to purchase products and services from EU suppliers, have been significantly impacted by the uncertainty caused by Brexit. Especially companies in sectors like manufacturing and retail where importing items from EU countries.
Businesses importing products from the EU experience delays and additional expenses due to new border and customs processes. Dealing with suppliers in the EU is now more challenging because of changes in standards and laws. UK companies have been substantially impacted by the uncertainty surrounding Brexit. Planning and managing a firm have been harder as a result of rising expenses, delays, and unpredictability.
New Opportunities
Although Brexit has caused obstacles for UK businesses, it also opened up new opportunities. UK companies now have access to new markets thanks to Brexit. Since the UK is no longer subject to EU laws, many firms want to grow into new markets outside the EU. Some companies are also focusing on new opportunities in the UK, such as the rising need for locally produced goods and services.
The benefits of Brexit for UK business owners include access to new markets because the UK may be able to negotiate its own trade agreements with other nations, less red tape and regulatory burdens, more flexibility for businesses with a UK focus, and less competition for UK producers.
Changes in Business Operations Management and Automation
Companies which use ERP systems after Brexit faced the situation when their business operations were to be updated, thus, certain things in ERP settings were to be changed.
- Customs and trade compliance changes: Following Brexit, the UK and the EU adopted distinct customs and trade laws, which may have required businesses to make adjustments to their ERP systems in order to comply with the new rules. This covers adjustments to tariff codes, paperwork specifications, and product categorisation.
- Supply chain management changes: Companies with complex supply chains across the UK and EU may have had to make changes to ensure that their ERP systems could monitor things and manage stocks across multiple countries. As a result, adjustments to data management and reporting capabilities may have been required.
- Accounting and tax management adjustments: Following Brexit, the UK and the EU have distinct tax standards, which may have required businesses to make modifications to their ERP systems to guarantee compliance with new tax regulations. This includes adjustments to the procedures for VAT reporting and accounting.
- Modifications to data privacy and security: As a result of Brexit, the UK is no longer subject to EU data privacy laws, which may have required businesses to make adjustments to their ERP systems in order to comply with the new data privacy and security rules.
- Product compliance rules have changed as a result of Brexit: these regulations may be different from those of the EU. To guarantee that their products complied with the new UK rules, including changes to labelling, packaging, and testing requirements, businesses may have had to make adjustments to their ERP systems.
- Financial reporting changes: Following Brexit, the UK and the EU have differing financial reporting obligations, which may have required businesses to make adjustments to their ERP systems in order to comply with the new rules. This covers modifications to the requirements for auditors and accountants as well as financial reporting standards.
- Modifications to logistics and transportation: In order to manage the new customs and border procedures following Brexit, businesses that depend on logistics and transportation services may have had to make modifications to their ERP systems. This involves adjustments to delivery tracking, route optimisation, and transportation planning.
- Business plan adjustments may have been necessary for enterprises to maintain their competitiveness in light of the new trade climate that Brexit has given UK businesses. To accommodate the additional product lines, sales channels, and supply chain setups, their ERP systems may have needed to be modified.
Conclusions
Brexit has significantly impacted trade, legislation, investing, supply chains and labour in the UK. Due to the UK’s exit from the EU’s single market and customs union, businesses that import and export goods to the EU are now subject to higher trade restrictions and tariffs. Companies that were relying on workers coming from the EU countries started to face a lack of working force. Companies that were dealing with international trade were forced to adopt new approaches and had significant delays in delivery times as well as prices.
But challenges always come with opportunities. So many UK businesses also have got new possibilities to innovate and grow businesses due to increased demand for local products and services.
The impact of Brexit is an example of a set of unquantifiable challenges to Business. In the experience of Arcus Universe, the true strength of Acumatica is in its flexibility and, in most business situations where change has to be managed, knowing that a company can adapt its ERP practices is of vital importance. Whether this means defining new processes, establishing a fresh geographic presence or connecting to the latest commercial applications, Acumatica offers the best chance to rise to shifting market conditions. During periods of change, if a business plan might at first seem compromised, Acumatica is best placed to help a company to reshape strategy in order to meet the many vagaries of the modern business environment
