Even though many small and medium-sized businesses (SMB) in the UK work with organizations elsewhere in Europe, and almost a third of their income stems from these partnerships, many businesses remain ill-prepared for Brexit.
According to a new report from Aldermore bank, businesses have been preoccupied with tackling the Covid-19 pandemic and could not find the time or the strength to consider Brexit as well. To make matters worse, they’re not entirely sure how badly Brexit will hurt them.
The report states that a quarter think Brexit will make the Covid-19 situation even more difficult, while one in six anticipate supply chain difficulties and a shortage of materials, goods and services.
According to Tim Boag, MD Business Finance at Aldermore, no one really knows what the effects of Brexit will be.
“With the Brexit transition period coming to an end on 31 December, businesses who trade with the EU now face a new set challenges, particularly if there is no-deal,” he explained.
“Tariffs could be introduced on many imports and exports, which will have an impact on costs for businesses, and even if a trade deal is agreed there’s still likely to be significant changes to prepare for, such as additional checks and documentation on goods as required by both the UK and the EU.”
He believes SMBs should consult the Government for guidance, something just 14 percent have done so far. Only 14 percent have checked how VAT changes will impact them, while only one in six (16 percent) of those who import from the EU have checked the tax and duty for their goods. Even fewer (13 percent) have checked to see if there any additional regulations apply to the type of goods they import.