With the shock resignation of Dominic Raab and gloves coming off in the House of Commons, the Brexit drama has seen more plot-twisters than the average Sunday BBC night drama. But what do the latest cliffhangers mean for your business? Specifically, your payroll? From the falling of the pound to the possibility of a skill shortage, the immediate fallout is complex. To simplify things, we’ve broken down 3 of the key ways Brexit is likely to impact your company’s payroll:
1. Relocation of Head Quarters
Did you know that the UK currently hosts more HQs than Germany, France, Switzerland and the Netherlands combined? In view of the UK’s move to exit the EU, we could see this number either drastically increase or decrease.
On the one hand, many EU-based businesses may be reluctant to house their HQs in the UK.
However, there is also the distinct possibility that the leave vote will open us up to emerging markets, attracting more businesses than ever to set up shop on old Blighty. Either way, we’re likely to see a significant shift, which would mean big changes for UK-based finance departments.
2. Skills shortages – or surplus?
Recent statements from the immigration minister Caroline Nokes confirm that employers will not need to make additional right-to-work checks on EU citizens, even in the event of a no-deal Brexit. That said, this statement comes just days after saying the complete opposite, so it is still unclear what the end result will be.
The Recruitment and Employment Confederation has warned that a drastic loss of EU migrant workers could harm businesses. This would obviously have a knock-on effect overall payroll costs.
However, a loss of EU workers could equally push businesses to invest in up-skilling their current UK national employees with more apprenticeships. Long-term, an up-skilled UK workforce would be a massive boost for businesses.
3. Data security complications
If your payroll team deals with employees based outside Europe then things could get complicated, to say the least. HR teams could face a host of challenges when it comes to reconciling the UK and EU’s different data protection laws and their impact on employee data security.
On the one hand, the UK will be released from the EU’s restrictive Data Protection Directive. Bound only by our more lenient ISO 27001, the loosening up of Brussel’s-driven red tape could create more opportunities for British businesses. Thankfully, General Data Protection Regulation (GDPR) has already bound UK businesses to EU standards. This should make transition simpler.
However, businesses will want to look out for whether or not we have an EC Adequacy decision to protect UK data leaving the EU. An EC Adequacy decision would basically make sure that UK data being transferred to countries outside the EU will have the protections necessary to be GDPR-compliant.
Whatever the outcome of negotiations, it’s clear that HR and payroll departments can expect significant changes. From moving HQs to data entanglements, it’s easy to get overwhelmed by the prospect of a procedural overhaul over the coming years. However, by adhering closely to current standards of compliance with an efficient accountancy team, businesses can be prepared. By staying ahead of the game, we’re confident UK businesses are capable of thriving, however the political landscape pans out.
If you’re considering investing in your accountancy workforce, our expert recruiters would be happy to offer you a free consultation. Just call 01376 502999 or submit a callback request here.