SMEs must take urgent Brexit action

SMALL BUSINESSES should “press the panic” button and start preparing for a no-deal as there is no more time left to wait, according to consultancy Ready for Brexit.

The firm, which is composed of former trade negotiators, believes that 75 per cent of small to mediumsized enterprises (SMEs) are not prepared for Britain’s departure from the European Union on March 29.

Ready for Brexit chairman Paul Hodges, a former government trade negotiator, said the odds of a no-deal Brexit are growing because of the rapidly diminishing time available to agree a deal with the EU and for Parliament to pass the necessary legislation.

As a result, SMEs should prepare for an uncontrolled departure from the EU by checking their supply chains to make sure they can continue to function post-Brexit, they have material adverse change clauses in contracts to protect themselves and make sure their IT systems are ready.

“It is time to press the panic button. I hope we get a deal, but even if you think that there is a 50 per cent chance of no deal, you owe it to your business to prepare now,” he said.

“Business and the City are very complacent. There is a widespread belief that economic logic [that a deal will be struck] will prevail. But in this case, it may be that politics trumps logic.”

Federation of Small Businesses national chairman Mike Cherry said the majority of SMEs are unprepared for Brexit and urged politicians to find a way to break the stalemate.

“The reality is that this extreme outcome [hard no-deal Brexit] would hit many small firms, particularly those that are part of supply chains that run through the EU,” he said.

“If you are a mechanic that imports parts for European cars, will you be able to afford the extra tariff costs you will be faced with? Will you need to pass these costs on to customers? What will be the extra administrative and cost burden if you are a brewer that exports to the EU?”