The Secretary of State for the Department for Exiting the European, Dominic Raab, has delivered a speech outlining the Government's plans for a No Deal and announcing the publication of the first set of No Deal Notices.
Commenting on this, techUK Deputy CEO, Antony Walker, said:
“These papers show more clearly than ever why it is so important that the UK secures a comprehensive deal with the EU. They show that No Deal would mean significant new bureaucracy for businesses, and higher costs and reduced choice for consumers. Most significantly, the papers make clear that No Deal means a full third country customs regime with the EU. That would create significant and unpredictable disruption to supply chains, new costs for UK tech businesses exporting to the EU and long delays for those trying to get goods into the UK, including the millions of packages sent via just-in-time e-commerce services.
“The notices also lay bare some of the other challenges facing the UK tech sector in the event of a no deal. Rules covering Payment Services will cease to apply, affecting many new FinTech companies and meaning charges for using credit cards would likely increase and payments in different currencies could slow. The UK would no longer be able to approve new medical devices for use in the EU and all UK businesses and businesses selling Dual Use equipment would have to apply for new licenses. All of this would create cost and complexity that would damage some of the UK’s fastest growing and most innovative businesses.
“techUK welcomes the fact that Government is being honest about the problems a No Deal situation would cause and doing its best to address issues where possible. We welcome the clear commitment to introduce Postponed Accounting for VAT. This is a positive step that will ensure businesses do not face an immediate cash flow crisis as a result of at-the-border VAT charges the day after Brexit. However, the potential complexity of such a system shows yet again that the UK Government can only do so much to mitigate the impact on millions of businesses.
“While these notices show that the Government is aware of the many of the challenges facing us in the event of No Deal, it is worth noting that this is just the first tranche of papers. Many of the issues of highest importance to the UK tech sector such as the status of EU Citizens, the free flow of data, and the rolling over of existing EU trade deals are missing. It is vital that businesses are given the opportunity to make a full assessment of the situation as soon as possible in order to plan accordingly.”