A clear majority of UK small businesses have yet to start planning for a “chaotic” no deal Brexit despite being worried about the effect on jobs, investment and their futures.
A new survey from the Federation of Small Businesses (FSB) has revealed that only one in seven (14%) of small businesses have started planning for a no deal conclusion to the Brexit drama.
Almost half (41%) believe that a no deal would have an impact on their business but haven’t yet started planning for the possibility. One in ten believe that a no deal would have a positive impact on their ability to do business.
Other figures show that almost half of small firms believe that a no deal Brexit will have a negative effect on their ability to do business. This, however, rises sharply to 66% for those small firms that trade with the EU and to 61% for those that employ a staff member from the EU.
What will the deal be with VAT in the event of a no-deal Brexit? HMRC has released guidelines to make business owners aware of both immediate and long-term changes if no trade agreement is struck with the EU.
The research also revealed the actions those small firms, who will be impacted by Brexit, intend to take between now and the time the UK leaves the EU in preparation for a no deal Brexit. It found that 35% of small businesses will look to postpone major business decisions or innovations, while around one in five said they would cut staff or expenditure.
“Looking at this research it is obvious that our small firms are not prepared or ready for a chaotic no deal Brexit and the impact that it will have on their businesses,” said FSB national chairman, Mike Cherry.
“If you sell your products to the EU, buy goods from the EU or if your business relies on staff from the EU, you now see this outcome as a clear and present threat to your business.”
“It is deeply troubling that the prospect of a no deal Brexit is seeing many small firms shelving business decisions, pausing investment and more drastically, thinking about cutting staff. These businesses are the growth engines of the UK economy and it is critical that the government listens to their worries.”
Read more about the impact of Brexit on small UK businesses:
- VAT is too valuable to simply disappear under a no-deal Brexit
- Small businesses demand more from Liam Fox’s post-Brexit exporting strategy
- Mel Stride on Making Tax Digital, and what we can expect from HMRC before Brexit
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