Five ways social enterprises can prepare for Brexit

17 Dec 2020


Whether or not you trade with the EU, your social enterprise could be affected by Brexit from the 1st January 2021. Luckily Andrew O’Brien, director of external affairs at Social Enterprise UK, has shared this straightforward guide on what to consider.

2020 has been a tough year for social enterprises. The sector has done fantastic work in keeping communities going through this pandemic. Whilst COVID has dominated the life this year, in the last few weeks Brexit has returned to the top of the agenda.

The key message that every social enterprise needs to take away from Brexit is that things will change from 1st January 2021, regardless of whether there is a deal or no deal.

Even in a situation where there is a comprehensive free trade agreement between the EU and the UK, there is going to more paperwork and some disruption (at least in the first few months).

So here are five quick tips for how social enterprises can prepare for Brexit.

1.Base your financial forecasts on higher inflation and disruption

Brexit is likely to lead to higher costs for products whether due to tariffs, changes in exchange rates or additional transport costs.

The Bank of England anticipates inflation rising from 0.6% this year to 2.1% next year. This is a relatively sharp rise particularly at a time when businesses and households are already under pressure. However, this may underestimate the costs and disruption in the event of a No Deal Brexit.

It is well worth forecasting for a “high level” of inflation (say 4%) and see what impact this has on your margins so that you are prepared in the event of any economic instability.

2. Triple check your supply chains

Related to the above, the consistent message from the haulage and transport industries has been that there will be disruption due to Brexit. So, it is worth checking very carefully all your supply chains.

All your suppliers should have contingencies in place in the event of disruption, but it is worth understanding those plans in detail as they may have impacts on your business.

There are products that you can buy in order to protect your business, such as Trade Credit Insurance, to cover losses caused by trade disruption.

3. Check where your data is stored

One of the biggest concerns that government has currently is that UK business data could be “trapped” in the EU in the event of a No Deal Brexit.

The UK has said that it is happy for UK businesses to transfer data to the EU but despite the UK implementing GDPR, the EU has not given the same assurance. This may mean that some companies in the EU feel that they are unable to send data to UK companies because of uncertainty around data protection.

So check the contracts and agreements you have with any companies you use to access or store data. If you have client data for European citizens, you may also need to check your data protection agreements to ensure that you still have the right to keep access to and monitor that data.

For more information, check the Information Commissioner’s Office.

4. Make sure that you have the right certification and licences

If you are exporting goods or services to the EU, you may need to check that you have the correct licences and certification.  In most cases you will need to make any changes, but you can find a checklist of what to do on

5. Think about what rules and regulations need to change to help your social enterprise

The UK is going to be looking at how to use the powers acquired through Brexit. Already a green paper has been launched on how procurement can change after leaving the EU.

In this brave new world, every business will be making the case for what support it needs to thrive in the years ahead. Social enterprises should not be any different.

What rules and regulations could change to help your business in the years ahead? Reach out to us at SEUK and let us know.

You can contact Andrew @SEUK_OBrien on Twitter or by email or phone

Keep learning