Article 50: What does the future hold for UK SMEs?

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TODAY, nine months after the historic referendum that saw the UK vote to leave the European Union, Prime Minister Theresa May has triggered Article 50, officially beginning the two-year period of Brexit negotiations before the UK’s eventual exit from the trading bloc.

With so many questions about the UK’s ongoing relationship with the EU left to be answered, it’s a time of uncertainty for businesses of all sizes in the UK. With that in mind, the UK200Group has asked its member firms what they expect the future holds for SMEs in the UK.

The UK200Group is the UK’s leading membership association of independent chartered accountancy and law firms, whose members act for over 150,000 SMEs and private clients. Several UK200Group members have given their views on how the triggering of Article 50 will impact the SME community, spanning industries as varied as agriculture, fintech, charities and sole traders.

Jonathan Russell, Managing Partner at UK200Group member ReesRussell, said, ‘Hopefully with the triggering of Article 50 much of the speculation and political positioning will cease, though I doubt it. We are in for a period of negotiation and in any negotiation the parties start at opposite ends of the spectrum and if successful the parties will move to a point where they can agree.

However, there must always be a point where the parties will not pass, and it is only when those points for both sides do not meet that a deal cannot be done. If a deal cannot be done, then all that can be done is to walk away – in this instance Hard Brexit.’

‘Hard Brexit will suit neither the UK nor the EU and we will see where negotiations take us. The UK has not been involved in such negotiations for many years and will have to find people with those negotiation skills. Equally, the EU may have negotiators but in the last 40 years they have not been successful in negotiating much; in part, due to the need to get agreement from all individual members as well. As a single country, the UK can be nimbler in negotiations but with 26 members and different national objectives the EU may well prove obstinate.’

Trevor Cook, Partner at UK200Group member Baines Jewitt Chartered Accountants, said, ‘It is understandable that there has been some unrest in the run up to triggering Article 50. Many individuals and businesses feel they are entering a period of uncertainty and there has been a lot of speculation. Until the formal discussions are underway, it is too early to predict exactly what changes will be made and what path the UK will follow in its future relationships.’

‘However, it is hoped that the forthcoming negotiations will have the UK’s best interests at heart, whether that means agreeing positive trading terms, taking advantage of the single market, understanding the impact on UK taxation, helping businesses and individuals to plan ahead or presenting the UK as an attractive place to do business.’

James Abbott, President of the UK200Group and director at Abbott Moore, said, ‘Latterly I perceive much of the comment has portrayed a feeling which has, at best, been apprehensive about the Brexit process and, at worst, been quite negative. Counter that with a few outspoken individuals who seem to acknowledge few of the challenges we face in the break-up and as ever, it’s difficult to draw conclusions about our future. I suspect the success of the UK’s negotiations will lie somewhere in between those expectations.’

‘Whilst I am genuinely confident in our nation’s ability to thrive in whatever environment we face, we as SME advisors can’t sit on our hands and wait for the uncertainties during the negotiation process to be ironed out. It’s essential that we continue to open up new conversations and strengthening existing relationships, we can support our members’ SME clients in taking advantage of the opportunities Brexit will create.’

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