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The Brexit clock is ticking: How well prepared are you?

The Brexit clock is ticking: How well prepared are you?

'Who is already actively preparing for Brexit?,' Leon Kanters, Tax Partner at KPMG Meijburg asks, eagerly scanning the room. The question he has just asked appears on the screen behind him. Each of the 105 participants in the KPMG Brexit pushes a button on their voting device. Their answers appear in the screen in a matter of seconds. It emerges that only 31% are actively preparing for Brexit. 'Well, good that you came to this seminar,' Kanters says with a smile. 'It's not too late yet. But time is beginning to run out.'

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The Brexit clock is ticking: How well prepared are you?

On 24 June 2016, the day of the Brexit vote, a shock wave went through the geopolitical and economic landscape. Almost no one had expected that the United Kingdom would actually vote in favour of leaving the European Union. What would happen next? Would the borders be closed? Would trade tariffs be imposed again? And what would happen to the UK legislation that was intertwined with that of the EU? The panic in the market was palpable.

Today, two years later, the Brexit storm appears to have settled down again. Many businesses are waiting for the outcome of the protracted negotiations between the EU and the UK. As long as that is still unknown, taking any action seems pointless.

But nothing could be further from the truth. A so-called 'cliff edge scenario', where the UK leaves the UK without a formal withdrawal agreement, appears to be have been avoided. But the opposite scenario, a soft Brexit where the UK remains a member of the European Economic Area, has also been swept aside by prime minister Theresa May. 'A free trade agreement will be concluded,' says Kanters. 'The question is what it will look like. One thing is certain: customs formalities will return. And businesses have to begin preparing for this today. But there are more consequences….'

For this reason, KPMG has together with Meijburg & Co organised the seminar Insights into the Consequences of Brexit for businesses. Under the supervision of the KPMG Brexit Task Force, a concrete business case is addressed. In this business case, a fictitious company from the food and drinks sector is analysed through a multidisciplinary approach. The company has logistics centres in the Netherlands, Germany and the United Kingdom. 'That is almost exactly how are operations run!,' a participant enthusiastically comments.

The seminar is further testament to the major impact Brexit has on Dutch businesses. During the vote on the first day, 62% of the participants state that the impact on their business is significant. However, this increases strongly, to 90%, when the issue is again put to a vote on the second day. The multidisciplinary approach to the business case has shown that inaction is not an option.

The business case, too, is based on a free trade agreement, bearing in mind the red line drawn by May. The analysis shows that customs fees will not be the only problem. Because what will happen to HR? And what about IT systems; will they have to be adjusted? Will the supply chain have to be reconsidered? What will be the impact on finance and accounting? Brexit creates not only threats, but also opportunities.

There will be an impact, but how do you ensure that you can optimally anticipate the dilemmas created by Brexit? The business case shows there is no one-size-fits-all solution. The sector and customer needs are key drivers that determine the actions that need to be taken and the processes that have to be put in place. So the resounding underlying message is: Start today.

At the end of the seminar, the participants all have the same general response. This has been the first Brexit seminar where concrete scenarios have been highlighted, clear insights have been shared and practical leaflets have been handed out. For instance Marieke van Dok, Deputy Director of European and International Affairs at the Ministry of Economic Affairs and Climate Policy, emphasises how important it is to start taking action on Brexit now: 'Businesses will have to examine and analyse what Brexit will mean to them and this Brexit seminar has been a good showcase of why no one should delay these steps.' Nick Coppin, head of policy at the British embassy, said that he was very impressed with the Brexit seminar: 'I have not seen the possible implications of the worst case scenario set out so clearly before, although we want a more positive outcome than that.'

The Brexit clock is ticking on regardless. Now is the time to take action. No matter what shape it will take, Brexit will hurt businesses. So ask yourself, not tomorrow, but today: How am I going to prepare for Brexit?

See here the business case highlighted during the seminar.

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