Most accountants still in the dark on Brexit - ICAS

Nearly seven out of 10 Chartered Accountants are still at a loss as to what Brexit will mean for business, the Institute of Chartered Accountants of Scotland (ICAS) has said today.

According to the findings of the latest ICAS Brexit Tracker survey, which asked respondents whether they found the provisional agreement thrashed out between the UK and European Union in December “clear and understandable”; 36 per cent said it was “quite unclear” and 32 per cent rated it as “not at all clear” (68 per cent in total).

Only 2 per cent believed it was “very clear”, while 24 per cent rated it as “fairly clear”.

The online poll, carried out by ICAS, in association with law firm Brodies LLP, finds that the agreement is seen as most helpful as regards residence rights for UK citizens in the rest of the EU, and EU nationals in the UK, and least helpful on future freedom of movement, regulations and transitional trading arrangements.

The question of the UK/Irish border was addressed, in the provisional agreement, by a commitment that, “in the absence of agreed solutions” the UK would maintain “full alignment” with those EU regulations supporting north-south co-operation and the Good Friday Agreement.

What does “full alignment” mean? ICAS members were unclear, with answers ranging from:

In the latest survey, ICAS members were more optimistic regarding the likelihood of a UK/EU free trade agreement. In the Winter poll, 42 per cent expected a trade deal (but not membership of the Single Market) would be the outcome of the Brexit talks. This compares with 36 per cent in the Autumn Brexit Tracker survey, carried out before the December agreement.

Only 25 per cent (Autumn: 29 per cent) expect the UK will leave the EU with no free trade agreement in place; 19 per cent believe the UK will continue as a member of the Customs Union, but not the Single Market (Autumn: 20 per cent); and 5 per cent believe the UK will stay in the Single Market after Brexit (Autumn: 6 per cent).

The ICAS Brexit Tracker for Winter 2017/18 is the fourth in a series of quarterly online polls assessing the degree of optimism (or otherwise) of ICAS members regarding the impact of the Brexit process so far, and the likely impact of the UK leaving the EU.

Respondents indicated optimism/pessimism on a scale of -50 (very pessimistic) to +50 (very optimistic).

For the Winter 2017/18 survey, the Tracker shows (Autumn 2017 results in brackets):

Respondents are slightly more optimistic about what Brexit means for their own organisation, but slightly more pessimistic about its impact on the wider economy.

Members were also asked for their predictions for UK inflation, interest rates and the sterling exchange rate. They anticipate:

Bruce Cartwright CA, CEO (Designate) at ICAS, said: “The positive steps announced in December in the so-called Stage One negotiations provided some momentum coming in to the New Year.

“However, our members are very conscious that the next stage, which includes transitional arrangements, is key. This is a crucial stage that should hammer out some detail and provide the much-needed clarity that our business leaders seek.”

Christine O’Neill, Chairman of Brodies LLP, added: “It may be wise for ICAS members to consider the highest priority issues for their business and at least begin to make their concerns and views known to the UK and Scottish governments without delay.”

ICAS’s survey was carried out online in January 2018, and is based on responses from just over 310 ICAS members. Those taking part were based in Scotland (56 per cent), the rest of the UK (30 per cent) and overseas (14 per cent).

In terms of sectors, 22 per cent work in public practice (accountancy firms); 26 per cent in financial services; 12 per cent in manufacturing; 3 per cent in energy; 10 per cent in the public sector/not for profit; and 27 per cent were “other”.

ICAS has established a Brexit Advisory Group to understand members’ concerns, represent their views and interests, and assist them in understanding the impact of key issues on themselves and their organisations.