Brexit is only really going to have an effect on businesses that deal outside the UK, isn’t it? Whilst some might have thought this to be the case, the potential far-reaching effects of Brexit are becoming more and more apparent. A couple of headline areas to think about are changes of law and costs of supply/sale.
Changes of Law
As the nation moves to remove/lessen the impact of EU legislation in the UK, new laws may be passed. In some industries, it is common to have “Change of Law” provisions included to protect against increased cost or regulation. This can be as simple as covering off all changes in law affecting your cost base to specific areas such as changes in minimum/living wages.
Is this something that you can pass on under your terms? If not, is now the time to make changes and cover off the risks?
Costs of Supply/Sale
At present, we are in the dark about any customs arrangements that may be in place. For a period of time, there may be no impact on the costs of importing products… other than, say, the performance of the pound. It may well be, however, that the imposition of tariffs or customs boundaries has an impact on your ability to deliver your products in the same way as normal.
If your business requires you to import materials for incorporation into other products, do your terms allow a price revision if your raw material cost increases? What if new border controls are going to add delivery delays? Do your terms allow you to delay delivery or are you open to strict penalties?
This note does not constitute legal advice and is for general information only to highlight common issues.