Posted on Monday 25 March 2019 by Ulster Business
Breakfasteer: Johnny Hanna, head of tax for KPMG Belfast
Breakfasting venue: Deanes Deli, Bedford Street
Right, so just to let you know, we’re back to a largely coffee-based affair on this occasion. To be fair, my breakfasteer Johnny Hanna of KPMG has been on the go since 6am, so it’s understandable.
As we perch ourselves on stools at a small table on a rather bright and mild Belfast morning, Johnny says he continues to be busy – partly because of existing business, and in part, fuelled by Brexit planning.
“For us, we are probably one of those businesses who are well-hedged, in terms of the different aspects of the business. We have a very strong tax practice that is busy all year round, and we are involved in a lot of transactions, irrespective of the Brexit context – and some of it to do with it.”
Are companies making big moves because of the Brexit flux? “There’s a mixture. The larger companies have been preparing more,” Johnny says.
“They are lining things up. Some are not pressing the button yet, or hit that tipping point, even though we are less than a month away.
“Some companies have. In terms of M&A, we have seen some transactions in the NI market, where companies have had a bit of a hedge, merged, or made an acquisition, outside of Northern Ireland – and a bit of vice-versa.
“But the reality is that there are a significant number of remaining businesses, many small and medium, which have done absolutely nothing.
“That’s consistent with what I have been seeing.”
I opt for a croissant. That’s two months running, now. Jam is always a bit of a quandary. It probably doesn’t need it, really. But then again, I was offered it, so out it comes. Right, where were we.
“For a lot of SMEs, the question we ask is ‘how much disruption could you live with?’” Johnny says.
“For many of them, even a little disruption could put them over the edge, in terms of business. But they just don’t have the resources to do that preparation… they are all hanging on to this hope that there will be a deal, or an extension.”
KPMG in Belfast has grown into a team of around 270 – and is now based at the Soloist building in the city centre, with around 3,000 workers as a whole.
Back to the hot potato, Johnny says the ‘people’ element of Brexit is still going to be one of the biggest challenges facing us here in Northern Ireland.
“There’s hospitality, tourism, agri-food, manufacturing and logistics. That huge pool of EU nationals. What will happen with Brexit, or in terms of the future policy?
“We have heard anecdotally that we are losing workers fairly regularly – probably the biggest issue, going forward, is immigration policy. If the average salary is £21,000 to £22,000, but the immigration policy says ‘we are happy for you to bring in EU nationals, but they have have to be earning £30,000’. What happens for a whole raft of companies in NI? That’s fine if you are in London. That’s a big concern.”
And so, onwards to our respective workplaces to continue the day. Let’s hope this time next month we’ll all know a little more about what we are all going to be facing in the coming weeks and beyond.