With Brexit producing a year of twists and turns, the only certainty about 2019 is that the outlook for businesses across Scotland remains uncertain, according to Johnston Carmichael, Scotland’s largest independent firm of Chartered Accountants and Business Advisers.

“The big imponderable is Brexit and what sort of impact the outcome of current negotiations will have on business and investment confidence and resulting activity levels,” said Sandy Manson, Chief Executive of Johnston Carmichael. “Whatever the outcome, there will be opportunities too, and businesses are remarkably agile and resilient in the face of such uncertainty and change. We have been gearing up our range of advisory services to assist businesses embrace the opportunities and address the challenges of 2019.

“In particular I would expect VAT and Customs Duty advice to be in increasingly high demand as the Brexit outcome becomes clearer. I also expect a significant level of change management and project implementation to take place once the structure and detail of any Brexit deal is known or, equally, in the event there is no deal.”

But what else could be on the horizon? Johnston Carmichael’s experts share their top business predictions.

Tech talent will be increasingly difficult to recruit.

“With growing competition both from within the UK and globally, talent acquisition will become increasingly challenging and Scottish tech businesses will need to start thinking creatively about how to resolve this. Greater engagement with academic institutions and creating workplace cultures that actively encourage personal development could be among the solutions,” said Shaun Millican, Head of Technology and Life Sciences.

There will be further premiumisation of Scottish food.

Adam Hardie, Head of Food & Drink, said: “Premium food and drink remains the most attractive place to go for Scottish producers as provenance and craft continue to be key factors in consumer purchasing. This includes craft beer which is growing substantially compared with mass brewed beer and increased demand for products with perceived health benefits such as lower alcohol content drinks and food that is ‘full-of’ rather than ‘free-from’.”

Oil and gas M&A activity will rise.

​​“Oil prices continue to be volatile, but they are now at a level where investment decisions can be made,” Graham Alexander, Head of Oil & Gas and Corporate Finance, said. “As a result, companies in the UK are quietly confident about the future, with M&A activity in oilfield services expected to increase in 2019. Overseas expansion is still high on the agenda of many businesses.”

Expect wider adoption of automation and technology in manufacturing.

Alistair Black, Head of Engineering and Manufacturing, said: “Companies in the sector, irrespective of size, need to improve productivity to remain competitive and the adoption of technology will be key to achieving this. This will incorporate everything from investment in robotics to connecting the equipment and systems already in use via the industrial internet of things (IIOT) to create a more integrated and efficient value stream. This will become more accessible through increased availability of superfast broadband and reduction in the cost of technology. A well-defined digital strategy, access to capital and effective tax planning are all vital components for success.”

More GP practices will return to being managed by the NHS.

“We are likely to see some more practices merging or handing back their contract to the NHS due to the pressure to get partners/GPs,” said Louise Peters, Head of Medical. “Additional annual allowance tax charges may also cause many doctors to either cut sessions or retire early”

Talent attraction and development will continue to concern dentists

“The dental profession has greatly relied on the EU to fill vacancies in recent years,” said Roddy Anderson, Head of Dental. “Government is stressing the need to ‘control immigration’, but at the same time recognises that the NHS and other sectors of the economy will need to continue to recruit from overseas while there are shortages of home grown applicants. There have been difficulties recruiting dental associates and other dental care professionals for some time now, but as our exit from the European Union looms ever closer, the cracks are beginning to widen – especially in NHS dentistry.”

Employers will seek to obtain value from increased pension contributions.

“April 2019 will see the final increase for employer contributions to Auto Enrolment pensions,” said Craig Hendry, Managing Director of Johnston Carmichael Wealth. “The increased cost to a business is significant and merits time being spent with employees to understand what this means to them. Several employers have started to engage with us to provide surgeries with their teams and this is proving good value. Team retention is key for successful businesses and providing insight into their benefits package goes someway to assisting this.”

Personal insolvencies are likely to increase.

Donald McNaught, Head of Restructuring, said: “Consumer debt continues to rise to levels not seen since 2008 and with house price inflation continuing to outstrip average earnings, increasing numbers of individuals are expected to face financial difficulty. Any individuals experiencing debt issues should consult trained money advisors to ensure they are aware of the pros and cons of the various options.”

Confidence in the fishing sector will remain.

Alex Martin, Head of Fishing, said: “2019 will be a significant year for the fishing sector as we await the outcome of Brexit. Across the sector, fishermen would like to see a fairer share and ultimately that means full control over waters so that the UK becomes an independent coastal state. The industry is incredibly important to our economy and Scottish fisherman are very innovative and resilient - they’ve done incredibly well over the years in adapting and creating a sustainable stock. While confidence within the sector is high, Brexit is front of mind.”

Agribusinesses should prepare for the future amidst uncertainty.

“Farm businesses are still unclear on what future government support schemes will look like following Brexit and what access British farmers will have to overseas markets, particularly the EU,” said Robin Dandie, Head of Agriculture. “The best advice for farmers is to ensure they are operating as efficiently to keep on top of costs as best they can. To achieve optimum results often involves investing for the future and until there is some certainty about what changes there will be, it is hard to make strategic decisions.”

The need for carbon reduction will be increasingly important.

Mark Stewart, Head of Infrastructure and Renewable Energy, said: “The transformation from a fossil fuel to a bio fuel-based society across infrastructure, transport and commodities is critical if we are to meet global carbon reduction targets. Onshore wind still represents the most economic form of green energy generation operating at a levelised cost with fossil fuels. The latest round of CfD (Contract for Differences) includes onshore wind on the Scottish islands which is a welcome boost to the market. However, the removal of Feed-in Tariffs (FiTs) from March 2019 which has just been announced by the Department of Business, Energy and Industrial Strategy (BEIS), is a retrograde step for the sector.

“We are continuing to get involved in innovative projects which will help transition the UK into a low carbon economy - whether that is using the waste product from the whisky distillation process to create green bio chemicals, or exploring the viability of hydrogen to fuel ferries in Scottish waters. It’s an exciting space.”

More manufacturers will pursue circular business models.

Alistair Black added: “Businesses – manufacturing in particular – are being encouraged to design out waste from their products, ensuring they are built to last and with a focus on reuse, remanufacture or repurpose, rather than end-of-life disposal. This will require businesses to fundamentally rethink their business models and supply chains, but rather than being a threat, this has the potential to create new revenue streams and make businesses themselves more sustainable.”