In our regular Brexit column we look at how specific sector might be affected when the UK leaves the EU. This time we hear from insolvency practitioner Steven Wiseglass, FSB member and director at forensic accounting and insolvency practice, Inquesta
As the way companies enter the insolvency process is governed by an Act of Parliament, Brexit will mean little or no change to how professionals in my industry operate. However, uncertainty hovers over a number of areas. In the main, EU regulations mean an insolvency can be recognised in other member states. Let’s say a UK bankrupt has a property in Spain. The bankruptcy will be recognised in Spain, and this allows the trustee in bankruptcy to sell the property. Leaving the EU may make this harder, and how we handle these matters in the long-term will hinge on the final trade deal.
If we get a bad Brexit deal, the knock-on effect on UK companies that rely on trade with the EU could be severe, and more corporate insolvencies could follow. That will keep practitioners like myself busy. Failing businesses could lead in turn to swathes of redundancies and leave employees struggling to find new jobs, in which case there could be a sharp rise in the number of personal insolvencies. However, unless that happens, I believe there will be little change to the personal insolvency market, which mainly comprises credit card and tax debts and bank loans.