New study urges UK SMEs to prepare for no-deal Brexit
The UK SMEs (small and medium-sized enterprises) are urged to avoid putting their faith in politicians and consider all reasonable preparations for no-deal Brexit, says new study by The Institute of Directors (IOD).
The Institute of Directors (IOD) says that their analysis into how UK SMEs are preparing for Brexit showed that the extension until October had a little initial impact on the firms’ Brexit planning. The organisation advises business leaders to use the time left to ensure they understand their potential exposure to leaving the EU this autumn without a deal, and to take sensible precautions.
According to the research, the proportion of the polled businesses who had activated contingency plans increased slightly between January and April. This saw a slight boost of no-deal Brexit strategies from 18 to 23%, respectively. However, more than half of the firms surveyed had still not engaged in any contingency planning. Only 4% said they would be using the extension period to pick up the pace.
The survey polled 992 respondents between 15 April – 5 May 2019.
The IOD attributes the inability for the UK SMEs to prepare for the no-deal Brexit to the very limited financial support from central government. They say that this is despite the repeated calls from the IoD for Brexit planning vouchers to help SMEs get the professional help they need for complex trade and legal issues.
“This week’s vote won’t be the last twist in the Brexit saga, but it made clear how real the possibility of no deal is. Business can have no absolute reassurance that an agreement will be reached, particularly given the commitment of some Conservative leadership candidates to leaving the EU in October with or without a deal. It feels like the extension is at risk of being wasted.”
“It shouldn’t need saying, but many seem to have forgotten that getting a deal would be by some distance the better outcome, both for the UK and the EU. No deal is not ‘clean’, the mitigations announced so far are temporary, incomplete and untested with industry, and we would then have to enter into talks with the EU all over again. Far from providing clarity, a WTO exit simply extends uncertainty about the future, so it is no surprise a clear majority of IoD members say no deal would harm their business.”
“If businesses can’t have faith in politicians, that means they have to look out for themselves. With business costs rising in many quarters, and management time precious, it’s understandable that firms don’t want to put resources towards preparing for something we still hope won’t happen. But the risk of no deal is very real, and so we’d urge all businesses, if they haven’t done so already, to carefully consider their exposure and draw up mitigation plans now.”
– Edwin Morgan, interim director general, The Institute of Directors
Its almost impossible to prepare when nobody know the details of the exit. Even a no deal scenario has different terms and potential outcomes . I have looked at setting up German and / or Irish companies and the main advice for both has been wait until there is an outcome as legislation may change (with or without a deal)
many prepared for march the 29th only to be left with warehouses full of stock and supplies to use up or store
The constant differing of our parliment is causing the issue now. Businesses need to know what is happening and when so they can adapt. If they don’t have that info then they can’t adapt and so are left to flounder and when a decision is made they will be unprepared regardless of what it is.
However… it is shocking that so many have yet to register for a Eori number etc, considering it is fairly simple and free. There is no harm in having it ready. So im guessing some are just sticking their head in the sand. Then when it is panic stations a few days before they will blame someone else for the delay in getting one processed.
EORI is a good example of lack of abaility to prepare
We already have one as import from China. We tried to get a German one so we could export to there post Brexit as a UK one wont work without a deal. Current laws only allow a legal entity to have one EORI no and German Customs have been declining applications from UK companies by the masses due to this
Of course something will chanhe post Brexit but it can only happen post Brexit and not before. So any company that isnt big enough to have multiple entities across Europe that needs to import and export is pretty much stuffed and can only resolve this post Brexit