You might be Brexit ready, but is your client prepared?

When it comes to Brexit, Streets partner and head of indirect tax, Gerry Myton does not fear UK accountants’ abilities to handle the inevitable changes it will bring. Instead, Myton says he is directing his concern towards small business clients who have only ever traded with customers or suppliers in the EU27 and have no working knowledge of how to undertake imports or exports, with just weeks to go until the transitional period of Brexit expires. “This is something we as accountants will have to work around but I don't feel like it will be difficult for us to weather,” he says. However, as Britain prepares for life outside of Europe, how can an adviser help customers navigate this confusing transitional period? Myton’s advice is to “embrace the basics”: it may be a lot less complicated than you have previously been led to believe. How can accountants prepare for Brexit? The main thing for an accountancy firm is to understand the depth of these changes, we are effectively moving back in time in our relationship with the EU, to what the VAT and Customs regime was like back on 31st December 1992 Effectively, it's a big step back. Some people will now be in senior positions in accountancy firms who were not practising then. The whole thing is to grasp what the changes are, understand them and to give clients the right advice. Now is not the time to be dabbling in indirect tax, if you have not done so before. If you have to, bring in a specialist from outside your organisation and make sure your client is ready for 31 December 2020 so that any disruption to trade is minimised. What is the biggest question Streets Chartered Accountants is hearing from clients? The question I hear most from clients who sell B2C into the EU27, is: “How do I deal with the first six months of 2021?” as well as: “What is the most cost-effective way to do this before the EU import one-stop-shop is introduced on 1st July 2021?” People are unsure if they should move stock to an EU27 country or utilise UPS or DPD to pay import VAT and duty on behalf of the end customer. I think we as accountants understand the new Brexit trading laws, however not all clients do. For example, a potential client called last week regarding selling PPE B2B post 1 January 2021 into Spain. I asked what incoterm was contained within his terms and conditions. His response was: “What is an incoterm?” A different discussion arose, but it is one I fear is being played out on both sides of the channel. Thankfully, I am able to give people advice, however the biggest stumbling block in giving that advice is the extra costs and administration that arise for the client. What advice is Streets giving its clients who trade with the EU? Basically, what I tell my clients today, given that there are just eight weeks to go until the expiry of the transitional period, is to sort the basics (Eori number, incoterms, EU VAT registrations, customs agent appointed). It’s best not to go running off on any fancy tangents looking to get authorised for AEO or a Customs Warehouse. There is time to start that work but you must have the basics in place first. Clients should be engaging with their customers and suppliers to try and simplify things as much as possible to minimise costs and disruption. Will Brexit bring more opportunity for the small UK accountant? We live in very difficult economic times and during times like these, people will look for cost-effective alternatives. Streets is now finding itself pitching for projects that previously would have been the preserve of the ‘big four’ or top 10 firms . Our London office has won financial services work and tax compliance work from two of the big four. I think there will be a cascading down of work with smaller firms moving into the traditional catchment areas of the bigger firms where not only can they deliver a price alternative, but provide a more personalised service. Has Brexit changed the accountancy environment? I think the days of the larger offices with hundreds of staff commuting in daily are gone for good. Covid has proved that an accountant can work from home and more importantly, work effectively. Given the tough economic times, one feature has reappeared - last seen with the global financial crisis - and that is larger firms becoming very aggressive in quoting for work to prevent a hemorrhage of work.

You might be Brexit ready, but is your client prepared?

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