SMEs to carry on with Europe trade
TALKS: The majority of small businesses in Britain that currently trade with European member states will continue to do so after Brexit, regardless of the outcome of the negotiations, according to a survey.
The study suggests SMEs are still focused on keeping their EU trade arrangements intact.
It’s clear our trading landscape will remain very Euro-centric.
Russell Smith, director of Russell Smith Chartered Accountants
THE MAJORITY of small businesses in Britain that currently trade with European member states will continue to do so after Brexit no matter what the outcome of negotiations is, according to a survey.
Just 5 per cent of British SMEs currently working with EU partners or suppliers will seek to take advantage of intercontinental trade deals, data from financial firm Russell Smith Chartered Accountants shows.
Instead, 88 per cent intend to maintain their relationships following Brexit, even while facing the prospect of red tape and increased trading tariffs. The survey of over 300 British small business owners found that of those 12 per cent, that would look to change their trading relationships, the remaining 7 per cent would move to domestic options, making intercontinental trade the least favourable choice.
Director Russell Smith said: “There is a lot of chatter about trade with countries like the US and China. SMEs, though, are much more focused on keeping their EU trade arrangements intact.
“Whether out of loyalty, ease of access, current levels of satisfaction or apprehension of investing resources in new trading partners, it’s clear our trading landscape will remain very Euro-centric even after we officially leave the EU.”
Russell Smith Chartered Accountants also surveyed 55 SME directors and CEOs on Brexit.
The survey found that 56 per cent of SMEs chose to remain and that 18 per cent of those who backed leave would change their vote in a second referendum, compared to only 8 per cent of remainers.
The accountants also uncovered that 47 per cent of small businesses have been economically unaffected by the vote so far while of those that have seen an economic change, 44 per cent experienced a negative or very negative effect.
Only 7 per cent said they have been positively or very positively affected by the Brexit vote.
Russell Smith Chartered Accountants found that 80 per cent of SME owners in the UK want freedom of movement and goods to be part of a Brexit deal.
Post-Brexit, 40 per cent of businesses expect no change in how they operate.
Last month, the SME Confidence Tracker from business funder Bibby Financial Services found that 35 per cent of small firms are resigned to hard Brexit and that only one in five, 20 per cent, expect Brexit to be achieved by March 2019.
Brexit is now accepted as a done deal with less than one in ten, 8 per cent, predicting that divorce from the EU will not go ahead. While the vast majority, 71 per cent, of SMEs are clear that Brexit will happen, over half, 51 per cent, are anticipating a transitional phase before the UK can leave the European Union.
SMEs are agreed that Brexit will happen but what it looks like is still up for debate with the business community evenly split. Over a third of SMEs, 36 per cent, are expecting a soft Brexit, while another third, 35 per cent, are preparing themselves for a hard Brexit.
Edward Winterton, UK CEO at Bibby Financial Services, said: “Uncertainty isn’t good for business and Brexit is uncertainty in its most acute form. One thing the SME community is certain about is we are leaving the EU. What is less clear is what Brexit will look like.”