Marc Bunch, EY UK Global Trade Leader comments: “New customs arrangements have resulted in significant delays at borders. Businesses can take steps to identify where these arrangements are having a material impact on operations and explore opportunities to remedy these situations.”
Tax and VAT
The second largest area of disruption has been tax and VAT changes, with a wide range of problems reported. 36% of businesses said that VAT disruptions have negatively impacted trade, mostly based on increased compliance obligations and costs in time. However, almost a third of businesses reported increased cash flow and 23% said VAT disruption had positively impacted trade.
Andy Bradford, UK Brexit Indirect Tax Lead comments: “Although businesses have dedicated more resources to understanding the VAT rules, many have found the benefits to this, reviewing VAT return periods to mitigate cash flow issues. Business may be able to benefit from this further by expanding these reviews to their wider compliance position.”
Talent and workforce
As a result of the UK’s new points-based immigration system, 22% of businesses reported difficulties in attracting foreign workers to the UK. Additionally, 41% of businesses believe they will be impacted by new restrictions on the activities UK nationals can undertake whilst in the EU without a work visa or permit.
The ongoing COVID-19 travel restrictions somewhat limit the interpretability of mobility issues caused by Brexit. As restrictions lift, more businesses are likely to see the impact of Brexit-related mobility issues. There is an opportunity for businesses to use this time to prepare their post-pandemic workforce strategy, learning from organisations that have already faced disruption due to the new rules governing the movement of workers between the EU and the UK.