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.