Bad euro plans threaten UK business
Companies in the UK risk going out of business because they are not adapting their invoicing, tax and accounting functions fast enough to cope with the introduction of the euro on 1 January.
The Federation of Expert Accountants in Brussels, has warned that companies in non-eurozone countries like the UK could see their ‘going concern position seriously affected’ by the introduction of the euro if preparations are not completed in time.
UK companies face the greatest danger if eurozone subsidiaries fail to prepare properly. The real risk is if poor euro planning for invoices creates major cashflow problems. Severe trading difficulties are also anticipated for eurozone businesses unable to cope with the new currency.
Besides obvious mechanical changes like pricing in euros, companies will have to pay tax, particularly VAT in euros, and taxpayers have to take the exchange risk.
Former CIPFA director Noel Hepworth, Europroject director of the Federation, said companies that trade with eurozone countries should ‘make sure all invoices are issued in euros’.
He warned unprepared companies could lose money if they don’t bank payments made in legacy currencies by 31 December.
According to Hepworth, UK companies don’t appreciate the effect lack of preparation will have on them. It added: ‘They won’t be able to deal the way they did before.’
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Europe’s audit chiefs meet in London