Accountants demand Brexit clarity as profession’s fears rise – ICAS

Confidence that the UK Government can negotiate a free trade deal with the European Union is also waning, and key elements of the UK Government’s negotiating position are “unclear”.

These are among the findings of the latest Brexit Tracker survey commissioned by accountancy body ICAS, in association with law firm Brodies LLP.

The Tracker is based on an online survey of ICAS members (Chartered Accountants) carried out in July 2018, shortly following the publication of the UK Government’s white paper The Future Relationship Between the United Kingdom and the European Union. Just over 600 members completed the survey.

Around eight out of 10 of the respondents in smaller organisations (below 250 employees) say their organisation has taken “no action” as regards hiring/HR, supply chain/logistics and reviewing contracts.

Of those in larger organisations (250 employees or more), a minority had started scenario planning for hiring/HR (36 per cent), supply chain/logistics (36 per cent) and regulatory change (43 per cent).

Even fewer had so far sought external advice on hiring/HR (21 per cent), supply chain/logistics (16 per cent) and regulatory change (25 per cent).

Lack of clarity as to what the environment will look like following “Brexit Day” on 29 March next year could be a factor holding back preparations. Several of the key elements in the UK Government’s negotiating position are not well understood by business, for example:

Respondents’ preferences regarding the future UK-EU relationship remain stable, with 62 per cent preferring that the UK remains in the Single Market, 5 per cent preferring the UK to remain in the EU Customs Union and 26 per cent favouring participation in a UK/EU free trade agreement. These numbers are closely in line with the Brexit Tracker poll in autumn 2017.

In terms of the expected outcome* however, the number of Chartered Accountants who believe that the UK will reach a free trade agreement with the EU has fallen to 29 per cent (autumn 2017: 36 per cent), equal to the number that believe the UK will have no free trade agreement (autumn 2017: 29 per cent). The number opting for “don’t know” has doubled from 9% last autumn to 18 per cent this summer.

The “Brexit Tracker”, which charts optimism/pessimism from plus-50 (very optimistic) to minus-50 (very pessimistic), also shows that concerns over Brexit are deepening slightly, as shown below (summer 2017 figures in brackets)

Bruce Cartwright CA, ICAS Chief Executive said: “It has always been the case that ‘nothing is agreed until all is agreed’.

“ICAS members’ concern over the outcome of the Brexit process is understandable, since there would appear to be some fundamental areas of disagreement with only a few months to go.

“There is, however, a clear shared objective to reach agreement and deliver much needed clarity.”

Christine O’Neill, Chairman, Brodies LLP added: “Many SMEs simply do not have the resources to ‘scenario plan’ or to invest in contingency measures in anticipation of Brexit. Rather, they will rely on industry bodies and on Government to provide guidance and support.”