How Would Brexit Affect Your SME

If you’re a small or medium-sized business (SME) owner who currently exports to Europe, whether business-to-business or business-to-consumer, the upcoming European Union (EU) referendum on 23 June may hold a significant weight on your business’s future earnings.

Because the EU operates as a single market with no tariffs imposed on imports and exports between member nations, small businesses exporting from the UK to other EU member states have had it pretty good up until this point; but that could all change should the ‘leave’ camp gain more than 50 percent of the vote at the end of June.

If you currently export to Europe, here are five things to think about regardless of the potential Brexit:

1. There’s a ‘Wealth’ of Potential

It’s no exaggeration to say that some of the wealthiest counties in the world reside within Europe (and, for the most part, are EU member states). High wealth means high consumer spending, and if you’re not tapping into this spending you could be leaving money on what is currently a very reachable table.

2. Does Exporting to Europe Significantly Add to Your Bottom Line?

With that said, you have to ask yourself if exporting to Europe will significantly add to your bottom line, especially if you have high marketing and advertising costs (see below). You can argue that making a smaller profit in Europe is worth it for a short period to gain brand recognition, but if this doesn’t soon pick up you may want to rethink your decision to sell abroad.

3. You’re Geographically Close

Regardless of whether or not Britain is still in the EU after 23 June, we’re still very close to the continent geographically, which means Europe will continue to be a cheap (compared to the rest of the world) location to export to.

4. You Have to Keep Foreign Taxes in Mind

Exporting to Europe means you not only have to pay taxes in the UK but, depending on what you’re selling and how much, there’s a good chance you also have to pay tax in the countries you’re exporting to. These will change should the ‘leave’ camp succeed, but this is a complicated topic nonetheless.

5. Exporting to Europe Helps to Solidify Britain's Place in the World

Not that this should rest on your shoulders alone, but choosing to export to Europe helps to solidify Britain's place (and importance) in the greater world. It also, depending on what you’re exporting, allows the rest of the world to benefit from the exceptional talent and creativity within Britain’s shores.

Experienced EU Tax Accountants

To speak with a professional accountant to discuss the positives and negatives of exporting to Europe, both now and in the future, contact us today on 020 8780 2349 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.

Brexit: Opinions on the Impact on SMEs

There’s no doubt that you’ve read hundreds of articles and opinion pieces on Brexit and the European Union (EU) referendum over the last few months. For this reason, we’re going to keep this brief.

This is our roundup of varying (and often wildly different) opinions on the potential impact of Brexit on small and medium-sized businesses (SMEs) across the country. If, like 42 percent of small business owners surveyed earlier in the year, you are still on the fence over whether to vote for a British exit from the EU or not, this neutral roundup may help to sway you one way or another.

Remain: Free Movement of Individuals

Though this is a topic of debate that has primarily come up regarding us Brits’ ability to move around Europe (or rather, let’s be honest, the Mediterranean coast) on our holidays with the same ease we enjoy now, research published by the Federation of Small Businesses (FSB) suggested that 70 percent of SME owners said the continued free movement of individuals, and thus, labour, across Europe would influence how they vote come 23 June.

The key here is talent, and it’s a contentious issue among voters. From a small business’s point of view it makes sense to wish to hire the most qualified person for the job, as long as they’re able to legally work in the UK. Voters, on the other hand, argue that British citizens should have precedent in the job market over non-British members of the EU.

Leave: Flexibility and Adaptability

Back in March, and in response to a letter published the week before by the heads of 36 FTSE 100 companies urging Britons to remain in the EU, 200 small business owners signed an open letter urging the British people to ignore “…a minority of managers from Britain's largest companies,” and instead support Britain’s small businesses with a ‘leave’ vote on 23 June.

The emphasis of the letter gave a strong focus to the ideas of flexibility and adaptability; something the signatories of the letter said EU membership hinders, namely commenting that “…we deal with the EU's constant diet of unnecessary regulations which add to our cost base, reduce our bottom line, and raise prices for our customers for no return.”

Remain: Better Trading Channels with Europe

This point has been argued so much it barely bares repeating. But we will because, well, it’s one of the biggest inflection points for SME owners who export to the rest of Europe.

Unsurprisingly, the ‘remain’ campaign has gained almost unanimous support from large companies who do business with Europe on a daily basis. Equally unsurprising is the fact that small businesses who also happen to do business with Europe have also been piping up in favour of a ‘remain’ vote, as despite assurances on both side, it’s hard to predict what trade relations with the rest of Europe will look like post-Brexit.

Leave: Cost of Membership is Too High

The often-cited figure that you see splashed across our television screens (not to mention busses) is that the UK sends £350 million per week to the EU. Though this figure has come up against scrutiny (it’s said that a rebate is deducted before payment, making the actual figure around £280 million per week), it’s difficult for anyone on either side of the equation to argue that that’s not a significant sum.

Though the cost of membership isn’t as big a deterrent to staying in the EU for small business owners than it is to the general public, it’s still a point of contention, with 69 percent of SME owners saying that the high cost of EU membership will affect their vote, according to the FSB.

Experienced Tax Accountants

To speak with a professional accountant to discuss the potential impacts, positive or negative, the results of the EU referendum may have on your small business, contact us today on 020 8780 2349 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.