How will Brexit affect UK small businesses and entrepreneurs?
Small businesses, start-ups and entrepreneurs are at the heart of the UK’s economy. How the sector reacts to Brexit and the challenges it may bring is key to the buoyancy of the economy after the UK leaves the EU.
But with so much speculation concerning the likely terms of the country’s withdrawal from the trading block, how should small businesses prepare? I’ve been investing in exciting entrepreneurs, small businesses and start-ups for many years, and I hope that my advice on how to prepare for Brexit will strike a chord with anyone looking for some assistance.
UK small businesses are getting ready for Brexit
The deal negotiated by the Prime Minister has just been struck down by Parliament, with a . This is a blow for Theresa May as she struggles to honour the results of the Referendum and maintain trade links and ties with European countries.
There are now only a few likely scenarios left, which include a so-called ‘People’s Vote’, a second Referendum, a General Election or the UK crashing out of the EU with no deal at all.
It’s this final scenario that is causing the most concern for small businesses, and in particular those that rely on smooth cross-border supply chains. The Government is obviously aware of the worries this potential scenario is causing the sector and has published a number of documents on its website with advice for small businesses.
Broadly speaking, businesses should follow the steps taken right now by companies that deal in exports and imports from countries outside of the EU. You can find all kinds of advice, information and statistics about this here, including info on customs, excise and VAT.
What the Government says
for all kinds of businesses in different sectors. In addition, the Government says that they will contact the UK SME sector with more instructions before the country leaves the EU.
At the moment, the date for Brexit is still fixed at 29 March 2019, but we know that this could be subject to change, given the difficulties in negotiation over the last couple of years.
However, small businesses should consider this the date that we will leave the EU and consider how they will operate under a no-deal Brexit. The issue of the Irish backstop has so far been a stumbling block in reaching a resolution.
The backstop is essentially a form of insurance that would allow Northern Ireland to continue trading under the customs union for a longer period of time. It has been negotiated by the Prime Minister to stop the potentially chaotic scenario of trade ceasing entirely on 29 March 2019, a situation which both sides would like to avoid.
Under the Prime Minister’s proposed deal, there is a transitional period for the UK to sort out trade deals and other logistical matters. The idea is that this lasts until July 2020, with the option to extend if necessary. However, as this deal has now been voted down, it’s unclear as to the next steps.
Preparing for a no-deal Brexit is the best way forward until we have more clarity from the Government. That way, the worst-case scenario can be dealt with. Either way, small businesses are traditionally resilient and it’s their strength that will continue to boost the UK’s standing after Brexit.