Small businesses are in urgent need of more government support if no-deal Brexit lands on October 321st, according to research from the UK Federation of Small Businesses (FSB).
The clock is ticking and the UK still does not have a deal in hand. Meanwhile, it is not clear if an extension will take place when the October deadline arrives.
FSB’s research shows that 39% of small firms believe no-deal will hurt them with just 21% having a contingency plan in place. Nearly two thirds, or 63%, don’t think they are able to plan.
According to the FSB:
- The average cost for these businesses that have prepared, coming in at around £2,000. That amount rises to £3,000 for smaller businesses that export and import.
- 31% of prepared small businesses have stockpiled ahead of 31 October
- 34% report temporarily or permanently reduced profitability.
- 46% of these firms think that the volatility in Sterling has negatively impacted their business.
- 46% of small businesses, that believe they will be negatively impacted by a no-deal scenario, would welcome some form of financial support.
FSB National Chairman, Mike Cherry has renewed calls for the provision of financial assistance such as vouchers worth up to £3,000 to assist British firms. Cherry is also recommending a temporary in VAT and more.
“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. [The] 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. 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.”