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Does the EU referendum affect your business?

Small to medium sized businesses (SME’s) account for the vast majority of the private sector here in the UK. Some may argue they are the backbone for the economy, which means your votes will make a difference for the upcoming ‘Brexit’ vote next week on the 23rd June.

One of the main issues is what benefits does the EU really give to people, businesses and the economy. Are these benefits immense or are they outweighed by the restrictions of the EU? This article discusses some of the areas where the membership in the EU could affect your business.

business

The EU is a single market, a trading bloc that allows for the free movement of capital, good, services and people between member countries. Currently businesses have ease of trade with no tariffs when trading within the EU, which could change if the UK were to leave. Trading with the rest of the world would also become more difficult, time-consuming and expensive for businesses as the UK would spend years arranging for new agreements on trading deals.

Recruitment could be affected, as businesses that currently have employees from the EU can work without a specific work permit, will be affected if we leave the EU. Therefore leaving will mean new costs for hiring employees from the EU, and re-negotiating the contracts of current employees from the EU. The access to a much larger talent pool is only possible due to the nature of the free movement of people that the EU offers and without that are businesses restricting the labour supply they can access?

Not to mention the economic and political uncertainty that is already impacting trade for some SME’s and with fears that this could only worsen with the sudden decision to leave to EU, does the economy need such a shock? The access to loans and venture capital from EU financial intuitions would no longer be an option and business growth could de-stabilise in the long-run alongside the lack of confidence in the economy if we were to leave.

However does the EU really offer that much to SME’s? Or do the EU laws and regulation restrict them? Supporters of Brexit suggest that the EU red tape is significantly hindering the growth and success of SME’s. As if businesses didn’t have enough to deal with, being part of the EU means businesses have to comply with EU laws on employment, waste management, environmental regulations, product registration, health and safety, etc. For SME’s these additional laws could be the difference between profit and loss, between job creation and business evolution or being innovative and shutting down.

The success of Sweden and Norway is not new, being non-EU countries that export far more per capita then the UK and are part of the European Free Trade Association (EFTA), which allows then to trade freely with the EU. This could be an alternative for the UK and being aware of this option reduces uncertainty, does it not? So will trade be massively affected if we leave the EU? This will give the UK the independence to negotiate its own trading deals with the rest of the world, holding its own interest at heart.

Considering the rise of the digital world the introduction of the controversial new VAT legislation in the EU could drive some companies out of business. The law states that the VAT on digital services is set by the rate in the consumer’s country.  MP’s claim this would all change if we left the EU. The real question is how much do you believe them? Regaining control over UK laws and legislation is important to all and this freedom will be granted to us if we leave.

Britain’s uneasy relationship with the European Union has been evident for some time and whether we leave or remain in the EU it is safe to say that the UK will be facing change. The true extent to which this will affect businesses can’t be predicted. But considering you have an opportunity, a voice in the matter, it is imperative that you grasp it and don’t throw your vote away.