Thread: For our family business, there's no doubt #Brexit will have an impact - the question is how bad it will be. Meanwhile, the chaos surrounding Brexit leaves us in limbo, unable to continue the expansion which has helped us create jobs and aid other firms. @fascinatorfun
1. We sell cosmetic supplies and ingredients to home users and other SMEs - 66% of our sales are to customers in the EU. We rely on frictionless trade to get goods to these customers cheaply and quickly.
2. We sell to thousands of producers of soaps and cosmetics. The most obvious and possibly most pressing issue is the inevitable increase in cost and complexity of trade without access to the customs union and single market.
3. We already deal with customs clearance and fees when shipping to Norway and Switzerland which adds a few days’ delay on parcels to these places. The extra costs and delays are a definite barrier to tradie with these places. This will be EU-wide in future - a serious concern.
4. Now, we are in a market which allows us to freely move goods within that market. Post-Brexit, we will move from being a partner in that market to a competitor outside of it. Because of extra costs and delays, it will be hard to compete with firms like ours who still in the SM.
5. No one knows if there will be tariffs on the chemicals we sell post-Brexit, or if there will be quotas on how much we can send to the EU.
6. Many of the components used in the chemicals we sell are sourced from the EU. While the exchange rate has made our goods attractive to EU customers, any profits from export are wiped out by the increase in import costs. Even pre-Brexit we have see import-related costs rise.
7. The cosmetic chemicals we sell are regulated by REACH. After Brexit, we don’t know how these chemicals will be regulated. There is very little time for the UK to set up its own effective regulatory body. We have no idea how this will affect exports.
8. The end products our customers make are regulated by the EU Cosmetics Directive. Without complete compliance with EU laws and controls, our customers may face even more problems selling to EU markets. If demand for their products falls, demand for ours will also fall.
9. Post-Brexit, we have no idea how VAT will work when importing raw materials from the EU. If we are expected to pay VAT up front (we don’t right now), we’ll experience a negative impact on our cash flow.
10. Given the shambles the Government is making of negotiating and planning Brexit, we have little confidence they have had time to even consider the needs and complexities of our particular sector, or others out of the main industries. Chances of smooth transition? Near zero.
(point 2 - for brevity I've used 'access', for accuracy please read 'continued membership of both the Customs Union and Single Market')
