Brexit’s Impact on Professional Services

Pre-mature jubilations of the UK striking a deal with the EU were soon watered down. British financial and professional services firms realised the limited attention paid to the sector which contributes almost a quarter of a billion pounds to the economy and supports the livelihoods of over 4 million workers making it an invaluable strategic industry to the UK.

Nevertheless, the EU’s refusal to grant banks and other professional services firms equivalence, regarding the UK’s regulatory system as equivalent in stringency and comprehensiveness, has hindered the ability of operations to continue trading as prior to 1 Jan 2021. An exodus of between 5 to 10 thousand employees and a more acutely distressing outflow of almost 6bn euros on the fist day of Brexit Britain accentuated the issues facing the City with the impact likely to be more painful for less developed parts of the UK.

More specific to accountancy, British qualifications earned by students wouldn’t be recognised in the EU and thus prevent the undertaking of work across the channel resulting in lost fees for accountancy practices. UK based auditors might be unable to carry out their job for British companies who have their securities listed on the European Union markets. Similarly, the UK’s audit regulator, presently the, Financial Reporting Council, would be unable to inspect the quality of work carried out on clients present in European jurisdictions.

For more updates and insights on how Brexit is reshaping the relationship between the UK and EU as well as the particular impact on financial services, keep an eye on this area.