Small businesses need ‘meaningful financial assistance’ to prepare for no-deal Brexit, FSB warns
The government should provide “meaningful financial assistance” to small firms to prepare for a no-deal Brexit, the Federation of Small Businesses (FSB) has said.
The FSB surveyed over 1,062 small firms to assess how prepared they are for the UK leaving the EU without a deal on 31 October, finding that 39 per cent of firms believe a no-deal scenario will negatively impact them.
Read more: Ministers prepare new finance council to support post-Brexit lending to SMEs
Of those firms, just over 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.
“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,” said FSB chairman Mike Cherry.
The survey found that no-deal preparations have come at a high price, with an average cost of £2,000 for small businesses that have prepared. This rose to £3,000 for firms that export and import goods.
Cherry renewed calls for the government to provide “meaningful financial support” to small firms, including cuts to VAT and National Insurance, and extending two-year ‘retailers’ business rates discount to more small firms.
Read more: Small businesses pessimistic over Brexit and regulations
Such support “is desperately needed and would certainly provide a much needed shot in the arm for those firms that have already spent money preparing”, Cherry said.
Ministers launched a finance council to support lending to small businesses earlier this month, amid concerns that small businesses were not prepared for the UK’s departure from the EU.
A government spokesperson said: “We will be leaving the EU on 31 October and it is our preference to do so with a new deal that is in the interests of both our businesses and citizens.
“We have stepped up preparations, making £108 million available to support businesses of all sizes get ready for Brexit and ensure they can take advantage of the opportunities of our future outside the EU.
“We are travelling around the UK to give businesses practical advice and have been engaging with the FSB and other representative groups over the past three years to discuss how we can best support small businesses and make sure they have all the information they need to prepare.”
Main image credit: Getty