Supply chain 26 September 2018

No-deal Brexit plans reveal worrying outlook for small importers and exporters

Britain’s importers and exporters face an unprecedented increase in red tape
How would a no-deal Brexit affect small business prospects? Adam Prince, vice president of product management at Sage, considers the possible impact on importers and exporters.

The British government has begun to publish technical notices looking at how UK businesses and citizens can prepare for a no-deal Brexit outcome.

In that event, the UK would revert to “third country” status, meaning that the UK would be treated the same as countries that lack any free trade agreements for tax, customs, and the movement of goods and people within the EU.

Britain’s importers and exporters face an unprecedented increase in red tape, likely to disproportionately affect small and medium-sized businesses the most. New tariff costs, increased administrative burden and new legal reporting requirements will result in extra complexity whilst at the same time hitting productivity for these businesses.

Import and export costs for all businesses are likely to rise after Brexit, with a need to put new administrative measures in place, carry out additional formalities and potentially redefine the nature of your business.

This will particularly impact smaller businesses that might feel the increased administrative costs more acutely, especially if these businesses have never previously traded outside the EU. Smaller businesses with fewer administrative resources might need to start their preparations earlier too.

Sage research shows businesses already spend an average of 120 working days per year on administrative tasks, accounting for around 5% of the total manpower for the average Small & Medium Sized Business. Further administrative burdens will only add to the UK’s productivity crisis.

Brexit no deal VAT


HMRC publishes VAT guidance in the event of 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.


An increase in productivity of 5.6% in the UK could lead to an increase in GDP of at least 33.9bn per year, valuable resource that can be unlocked by smarter working practise and policies for Small and Medium Sized Businesses.

In a no-deal Brexit scenario, the UK will no longer enjoy the free trade with EU countries that it does now, with businesses facing VAT and import duties as well as increased administrative requirements.

As a result, importing, exporting and trading with countries inside the EU will become similar to trading with countries outside the EU, such as the US.