Senior tax professionals have said they spend several hours a week in meetings preparing for all eventualities of Brexit and getting their tax structures ready for the business changes it necessitates, as well as potential tax law amendments.

“The economic cost is horrendous,” said a senior tax professional at a major company in the automotive sector. “The effort of getting ready for that cost is horrendous.”

“I had eight-and-a-half hours of organised Brexit meetings last week, and that doesn’t include the work I do to get ready for those meetings,” he continued. “It impacts us at every stage.”

Companies are also having to hire more tax staff to deal with the workload.

The UK was close to tumbling out of the EU with ‘no deal’ – the worst possible scenario for businesses – on April 12, but 11^th-hour talks led to an extension of Article 50 until October 31.

Prime Minister Theresa May will use this time to try and convince MPs to support the Brexit deal she has negotiated with the EU. However, given that they have rejected it three times already she may choose to hold a second referendum on the UK’s membership of the EU, or hold a general election in the hope of breaking the parliamentary deadlock.

The 10 biggest banks in the UK, including Goldman Sachs, JPMorgan and Morgan Stanley, have reportedly spent a combined £1 billion ($1.3 billion) preparing for Brexit, while smaller banks have spent tens of millions of pounds each.

This shows the scale of regulatory change the financial services (FS) sector, which is worth around 6.5% of the UK’s gross domestic product per year. Any changes to companies’ structures in any sector have to be run through the tax department, and in regulation-heavy sectors like FS, pharmaceuticals and manufacturing, the time this takes to process is astronomical, companies told International Tax Review.

“I personally have spent the best part of 50% of my time in the last 18 months on Brexit. I’ve had several hours of organised meetings every week on Brexit, mostly making sure we’re up to speed with what the plans are going to be,” said a key member of the tax team at a large bank. “That's organised meetings [internally], aside from the meetings I have with [advisors].”

The industry insider equated the nature of work they have done on Brexit to be similar to dealing with a very large M&A transaction, at the same time as launching a large European investment bank.

In addition, they have had to look at all of the products they offer and work out the rules in other countries, with an eye on relocating those services to be sold from other countries in future.

“Then we have to look at what are all the inter-company consequences thereafter. Then, once we’ve worked out we don’t have to charge clients VAT on things we haven’t charged them on for 20 years – good start – we have to work out how to deal with VAT recovery.”

“We're continually involved with questions concerning Skandia and VAT groups,” they added.

There are Brexit issues for every company with operations in the UK, and manufacturing companies are affected particularly badly by supply-chain issues.

“Are your parts going to get blocked at the border because of congestion at the ports? Every little thing impacts you,” said the automotive industry professional.

“If you say, well 'let's stockpile parts', you're into overtime costs for the factories, you're into extra vehicles to bring across – every simple solution has got a whole lot of complexity attached,” they added.

There are also tax peculiarities that many companies face. For example, in the automotive sector, the application of VAT rules around the recovery of input tax for imported vehicles are a mystery.

While Brexit is difficult to plan for, moreso because of the political uncertainty, not all tax directors see it as disastrous.

“I wouldn’t say [we are experiencing Brexit-related] pain, it’s just change we have to deal with,” said one senior in-house professional.

“It is a big impact, of course it is, but the key is being prepared for all eventualities. That's what a lot of our effort is going into, [attaining] a state of preparedness.”

In addition, while the impression many people have is that all multinational companies are suffering greatly from Brexit uncertainty, there are plenty of companies whose structures are barely impacted at all.

“Fortunately, we don't have [significant presence] in the UK," said an in-house professional at a European multinational. “We use a third-party distributor… From a tax perspective we are not very impacted.”

As it stands, the UK is set to leave the EU with ‘no deal’ on October 31. This would be the worst possible outcome for businesses, with no tax or legal framework for trade between the UK and remaining EU member states.

The deal negotiated by May is almost universally unpopular, and it’s not hard to see why. Former Greek Finance Minister Yanis Varoufakis – who knows a thing or two about tough negotiations with the EU – recently said: “Whether you are a ‘Brexiteer’ or a ‘Remainer’, this is a deal that a nation signs only after having been defeated at war”.

MPs agree that they don’t want May’s deal, but don’t actually agree on anything else apart from the fact that they don’t want to leave with no deal – which they seemingly don’t understand is the default outcome if they fail to agree on something else. They have voted down May’s deal three times.

May and opposition leader Jeremy Corbyn have agreed to meet for talks in the hope of finding a compromise which Corbyn could tell his MPs from his Labour party to vote for. It the talks fail, the UK will be back to square one – with May trying to convince more of her own MPs to back her deal. Any compromise would have to be agreed to by the EU.

The EU has said it will not accept changes to May’s Brexit deal, but in reality it would probably be prepared to negotiate a ‘softer’ Brexit proposal, such as that backed by Labour that involves the UK staying in the customs union and single market. Its preference is for the UK to revoke Article 50 and remain as an EU member state.

It may take a general election to break the impasse. But it’s unclear if May would be willing to sanction one, as it would surely force her to step down as Prime Minister and allow a less unpopular colleague to lead her party to the polls.

No matter what the outcome of Brexit, companies are already counting the financial cost, as well as the cost in time spent by tax departments and other employees in getting ready for all eventualities.

The only winners, lamented the FS sector tax professional, are law firms.

“We’ve spent a lot of money on advisers, and I'm sure they'll record results for the last 12 months, but I don’t see how it’s provided any value to the economy,” the FS sector tax professional said.