There is a “worrying lack of preparedness” for a no-deal Brexit from small businesses, according to new research ahead of the UK’s anticipated exit from the EU on 31 October.
The Federation of Small Businesses has revealed 39 per cent of surveyed firms believe such a scenario will negatively impact them.
Among those firms only one in five (21 per cent) have planned or prepared for anticipated issues. While nearly two-thirds (63 per cent) think they are unable to plan.
FSB national chairman Mike Cherry says: “As the risk of a chaotic no-deal Brexit on 31 October remains alive and kicking, it is worrying that many small firms have either not prepared or are finding that they can’t prepare.
“Ongoing uncertainty is to blame for preparations hitting the skids with the picture still not clear as to how the UK will leave the EU on 31 October. Until we get clarity, small firms must prepare for the cliff edge where possible, and make preparations for a no-deal Brexit.”
He adds: “Preparing for this outcome is coming at a high price though with small firms being hit by an unstable pound and having to shell out money on a potential outcome that has been highly disruptive, remains uncertain and is unwanted. Government must use what little time is left before 31 October to provide small firms with the support they need to navigate the unchartered and turbulent waters of a no-deal Brexit.
“Raising awareness is important, but not enough. The Government must also turn to meaningful financial support. This is desperately needed and would certainly provide a much needed shot in the arm for those firms that have already spent money preparing. For those firms that can’t prepare, we need broader support including cutting VAT and National Insurance, uprating the £3,000 employment allowance and extending the two year ‘retailers’ business rates discount of 33 per cent, to a wider range of smaller businesses.”
Jean-Claude Juncker, the president of the European Commission says Britain will be responsible for a no-deal Brexit as he and EU chief Brexit negotiator Michel Barnier are doing “everything possible” to get an agreement.
Yesterday the FCA updated and published draft directions under its temporary transitional power, which gives the regulator flexibility in applying post-Brexit requirements.
The directions would only come into effect on exit day if the UK leaves the EU without an implementation period.
FCA executive director of international Nausicaa Delfas said: “The temporary transitional power is intended to reduce the risk of disruption for firms in a no-deal scenario while ensuring consumers remain appropriately protected and markets continue to work well. It forms part of the extensive work the FCA has been doing to prepare for Brexit. It should give firms and other regulated persons the time they need to phase in any regulatory changes they may need to make as a result of ‘onshored’ EU legislation.
“As the FCA announced in February 2019, there are specific areas where we will not be granting transitional relief and, in these areas, we continue to expect firms and other regulated entities to take reasonable steps to comply with the changes to their regulatory obligations by exit day.”