A Government report published on 24 September 2021 outlined plans to overhaul tipping and...
mastering business longevity beyond Brexit
Birkett Long can trace its roots back to 1821, celebrating its 200th anniversary this year. Statistics suggest that only about 0.5% of all companies achieve 100 years in business, so we are definitely doing something right!
About 30% of businesses will survive their 10th year in business and, of course, some businesses continue, just within other businesses following a successful sale or merger.
Businesses face ongoing challenges as external factors impact their daily operation. Competitors, disrupters, pandemics, and political change challenge us constantly. One key to thriving and therefore surviving for the long term is adaptability.
The ongoing pandemic has seen businesses adapt more quickly than ever. Many have been innovative about the way they operate, adapting their current and future plans to enable them to do more than just survive.
Brexit and the Co-operation and Trade Agreement (CTA) has meant businesses need to be ready to implement new working arrangements. They should also be aware of relevant operational changes, such as:
· Whether they need to use the new UKCA mark on certain products. More information this here
· Understanding the impact of the Rules of Origin of products when exporting or importing products between Great Britain and the EU, Northern Ireland and the rest of the world, now we are outside of the EU, which impacts whether customs duties need to be paid
· Updating terms of business to ensure there aren’t any unintended consequences from using Incoterms, for example, if you record sales being “duty paid”, which was acceptable when we were part of the EU and tariffs were limited
· Reviewing terms of business to ensure they reflect the level of service that can be provided, perhaps extending timescales to allow for transport delays, identifying who is responsible for additional costs that might arise from new import or export requirements?
· Do the contracts contain a hardship or material adverse change clause? This clause deals with which party should bear increased costs of supply, fluctuations in interest rates or exchange rates, and other factors taken into account at the time the contract was made. If so, could the clause be triggered by the CTA?
· Jurisdictional matters – does your agreement refer to the EU as a means of incorporating the UK, now we are no longer in the EU does this term need to refer to the EU and UK?
· Being aware of changing rules in your industry if, in the future, the UK moves away from EU rules that currently apply
· Organising any additional paperwork to ensure your personnel can continue to travel between the UK and EU to perform a contract
The Government, trade bodies and professional advisers are providing guidance and assistance to help businesses tackle the intricacies of the Brexit changes. We have been assisting a number of clients with Brexit-related matters. We have advised on certain regulatory requirements, assisting with terms of business reviews and advising on force majeure considerations. Help in different forms is available to those looking to adapt and thrive.
We can provide you and your business with legal advice relating to the operation of your business. Our Commercial and Corporate Finance Team are here to help.