Small businesses must not ignore a “no-deal” Brexit, says FSB
News broke this week that the Government was preparing to release a raft of documents detailing what businesses should do in the event of a no deal Brexit.
With the prospect of a deal looking ever further afield, the Federation of Small Businesses (FSB) has today warned of the dangers of a “sudden and unplanned” exit from the European Union.
In a new report, its chairman, Mike Cherry, said the smallest firms will be the least able to cope with a “cliff-edge moment”.
Implying that proper preparation for all eventualities is key, Mr Cherry said: “It’s right to prepare for a no-deal outcome.
“That means following-up these notices with guidance that every small business owner can understand. ‘Technical’ is certainly the word – anyone without real expertise won’t be able to make head nor tail of these documents.”
A no-deal Brexit could mean that EU tariffs are slapped on all UK exports from 11pm on 29 March, causing a “huge disruption” to firms that trade internationally. So much so, that research shows that two in five small businesses that trade exclusively with the EU say they would be “put off continuing to do so by a tariff of any size”.
Leaving without a deal would also force small UK exporters to negotiate the paperwork that comes with third country access to EU markets, said Mr Cherry.
“It’s all very well for the Government to suggest that small businesses ensure they have the software, freight forwarders and brokers needed to make customs declarations in the event of a chaotic no deal. What ministers need to understand is that these are not big corporations, they don’t have thousands of pounds to throw at consultants and new tech.”
For now, he adds, businesses have a small lifeline in the Government’s financial commitment to EU-funded initiatives up until 2020.
“Support from European Structural Investment Funds has helped thousands of UK small firms go from strength to strength in recent years,” he said. “The hope is that the UK Shared Prosperity Fund lays the groundwork for a more streamlined, targeted and accessible business support landscape.”