Smooth transition is the key to Brexit

ACCA still calling for clarity when it comes to the dreaded ‘B’ word!

Bar rules used to dictate ‘no religion, no politics’. Today it feels that Brexit could easily, and perhaps should, be added to that list, easily justifying its own position rather than a political sub-topic. The divisive word – Brexit – and all its consequences and connotations have been knocking around for the past three years or so.

And while some of you PQs might automatically shut down when the ‘B’ word is persistently thrown around, it is important to keep abreast of the situation as the deadline fast approaches. Despite the fact the profession has been calling on government for more clarity throughout the process, with just weeks to go to the UK’s departure from the EU on 29 March we are none the wiser about what will happen after that date.

But here is what we do know…
Throughout the Brexit negotiations, ACCA has been involved in high-level discussions both in Westminster and in Brussels over the protected movement of goods and services, recognition of UK regulatory frameworks and qualifications, and, most importantly, access to talent.

Business are preparing as best as they can with the information available. Whether this is through conversations with their supply chains, customers and lenders – discussing their ability to deal with unexpected changes in cash flow, supply or demand, and how they can best help each other. But, for the most part, there is a sense that many are simply crossing their fingers, hoping that whatever terms the UK leaves on that it will not adversely affect them and the way they do business.

It is hugely important that government maintains comprehensive conversations with business about potential and real impacts of Brexit; not just during Brexit negotiations but also on any new free trade agreements with non- EU countries.

The focus in recent months has been on logistics, the flow of goods across borders. ACCA members will serve as vital advisers here, supporting businesses with tax matters and dealing with customs and excise, for example. It is, however, also vitally important to consider what happens with UK services exports, which the Office for National Statistics revealed are worth £70bn.

This includes enabling aspects of the UK/EU trading relationship and other trading relationships to come, including data transfer, incentives for cross-border investment in technology and software. So far, conversations have focused almost exclusively on goods, but we ignore the services sector at our peril.

Specifically on qualification, the UK currently adheres to and enjoys the benefits of the EU’s Professional Qualification Directive; members who are EU nationals are currently able to obtain access to relevant regulated accountancy roles across the EU with the minimum of barriers.

With the UK poised to leave the EU single market, UK nationals may no longer be able to take advantage of this recognition system. We therefore support and urge continued collaboration between EU and UK regulators and professional bodies to allow the continued movement of professionals between the UK and EU countries, with the minimum of barriers.

However difficult discussions in Europe are proving to be, it is important that the UK government and indeed Brussels maintain a willingness to compromise, collaborate and continue to have open dialogue with business about potential Brexit impacts and opportunities. This will reduce the risk of negative and unintended consequences and their potential impact on jobs, the economy and, ultimately, society.

The current situation Resolving the Brexit conundrum remains the biggest issue the country has faced in modern times. Politically, Britain is locked in an impasse, creating massive uncertainty for business.

Whatever happens up to and beyond 29 March, government must prioritise bridging the void that has developed between government and business, and indeed, wider society.
The economic picture amid such uncertainty is bleak, as highlighted in ACCA’s latest Global Economics Conditions survey of more than 3,000 accountants worldwide. For the end of 2018, confidence in the UK economy fell sharply – by 15 points – and is now at a record low. Such findings are disturbing and demonstrate just how much the uncertainty surrounding Brexit is affecting business and investment activity and confidence. Despite its long standing ability to deal with change and risk, the accountancy profession has not been immune from such uncertainty.

With no withdrawal agreement in place, ACCA members are now faced with a momentous task of adequately preparing for potentially planning for massive change in the coming weeks, whilst the user manual is yet to be published.

We therefore continue to call on government to ensure businesses and the professions are given adequate time to adapt to any changes in regulatory frameworks to allow for as smooth a transition as possible.

While the next few weeks will no doubt be turbulent, ACCA will continue to work alongside other professions and business groups to proactively engage with government on behalf of our members and students. We will also continue to track business sentiment in relation to Brexit and its impact and conduct research to help us, our members and policy makers make informed choices.

We will continue to do all we can to ensure we are ready for whatever may come, so even if at 11pm on 29 March we’re at a sharp cliff-edge we will ensure we have a parachute ready!