Over three-quarters of small businesses in the UK feel unsupported ahead of Brexit, according to a new report.
A survey carried out by Simply Business uncovered that 76% of the 1,200 small business owners they asked feel like they lack the support they need in the run-up to the UK leaving the European Union, whilst 20% said they didn’t know where to turn for help and advice.
The survey also found that 35% of SME leaders have decided to delay growth plans, although this figure also highlights the majority of firms which are pressing on with expansion plans.
COO at Simply Business, Bae Montoya commented of the results that: “There isn’t a blueprint for what happens after Brexit, which is particularly challenging for the UK’s 5.7m hardworking SMEs.
“The self-employed are the backbone of the British economy, and they deserve more support and guidance – after all, it’s they who employ the majority of the UK workforce.
“A workforce which, according to our survey, is potentially at risk. Surely the government can clarify guidelines for what steps SMEs should take?”
Why it’s critical SMEs get the right Brexit support
Uk small businesses are the powerhouse of the UK economy, employing 16.3m people or 60% of private sector workers – in work. And whilst British stalwarts may get the headlines, small and medium-sized firms account for 99% of all UK businesses according to the Federation of Small Businesses.
And that’s why it’s critical small firms are as supported as possible when it comes how Brexit may affect their businesses, how to prepare and what to focus potentially limited resources on in the run-up to Brexit day.
Read more: International demand for British gin & whisky delivers record export drinks sales
Yet whilst it’s clear the pivotal role that small and medium-sized companies play in the UK economy, these firms are the most likely to lack the internal expertise and resource to effectively plan for and strategise against Brexit uncertainty now and any disruption in the future.
This is one of the reasons why Go Exporting launched our Brexit Consultancy, a cost-effective audit of business readiness for all eventualities of Brexit.
Go Exporting can help you navigate the Brexit minefield. Contact us today to arrange a review of the potential impact on your business.
HMRC has extended the deadline of its customs training fund until 31st May 2019 to help businesses prepare for Brexit.
The £8m fund, which was announced in October last year, is designed to help businesses prepare for a no-deal scenario and includes funding to train intermediaries and traders completing customs declarations, IT improvement funding and the increase in the number of short-term courses available to support customs brokers.
Financial Secretary to the Treasury, Mel Stride MP commented that: “We are doing everything we can to get businesses ready for the UK leaving the EU, however, businesses also need to take action themselves to prepare.
“There is help available – we have provided funding to support businesses with customs processes, and we are now extending the deadline to 31 May 2019 giving more time for applications.
“We have already received over 300 applications, and I’d urge businesses to apply as soon as possible to avoid missing out.”
Read more: UK economy has missed out on £550m a week since EU referendum
The two grants which can be applied for, the training and IT improvements grants, are applicable to businesses who complete customs declarations and import/export into the EU, whilst firms with fewer than 250 employees, an annual turnover of less than €50m and who complete customs declarations on behalf of EU-trading firms can apply for the latter.
If your businesses could benefit, you can read more about applying for the grants on the Government website here.
Export sales of British beverages reached a new high in February, with demand for Scotch whisky and British gin proving particularly popular with international palates.
In total, international sales hit £8.3bn, up 7% on February 2018, marking a doubling of demand in the last 15 years and providing a surpless of £1.6bn.
Total service and product export sales also grew by 3.1% on a year-to-year basis, reaching £639.9bn.
And with Brexit just around the corner, even if that corner is now slightly further away than it was one month ago, EU exports for the beverage category are far dwarfed by the demand in non-EU countries which account for over 63% of exports, including massive demand increases in India and Japan where export sales grew 49% to £179m and almost 24% to £188m respetively.
The US remains the biggest fans of British drinks though, sipping up £1.8bn of local product.
International director of the Scotch Whisky Association, Sarah Dickson commented on the results that: “Scotch whisky continues to blaze a trail for UK exports, making up more than half of all UK beverage exports.
“Last year, 41 bottles of Scotch whisky were shipped from Scotland every second to around 180 global markets, with an export value of £4.7bn. We should be proud that Scotland’s national drink is the world’s premier whisky, enjoyed by millions around the globe.”
Read more: UK economy has missed out on £55m a week since EU referendum
“Consumers in key global markets are looking for products with a strong story, and with Scotch whisky they can discover a spirit with an unrivalled reputation for quality, authenticity and provenance.”
And the results are a big win on the political front for the Department of International Trade, with Liam Fox commending the growing demand for British exports in a challenging global economic environment.
A new report has suggested that Brexit has cost the UK economy £550m in lost growth since the referendum in June 2016 – £66bn worse off in just three years.
That’s according to Standard & Poor’s Brexit report, which noted the fall in the value of sterling as one of the primary factors affecting potential economic growth.
Senior economist at S&P, Boris Glass noted that: “Uncertainty over the shape and form Brexit will take has increasingly paralysed any forward-looking decision making.
“This is reflected in particular in a contraction of business investment in 2018.”
S&P’s analysis was actually more favourable than Goldman Sachs and The Bank of England, who estimate lost growth to be £600m and £800m per week respectively.
However, major businesses are still more than optimistic about the trading conditions in the UK and the ease of doing business. CEO of Made.com noted the UK has the best location in Europe to do business, ahead of Berlin and Paris… despite Brexit.
Read more: Germany increasingly concerned by lack of SME Brexit readiness
In an interview with The Telegraph, Philippe Chainieux commented that: “The UK has been, and I think, still is, a more international hub, attracting money first of all, and talent from across the world.
“Berlin, Stockholm and Paris are far behind from that perspective.
“The merit of London is that it’s easier to build an international business here because the capacity to attract people from everywhere, to attract talent, culture, world understanding in one single hub is absolutely huge.
“In fact, it’s so much easier to do it here than anywhere else in Europe.”
The head of bathbomb and scented soap retailer Lush has given an insight into the potential damage a no-deal Brexit could cause to his business.
Mark Constantine has lambasted the government’s approach to negotiations and its attitude towards businesses as the firm’s financials took a swung from a £23m profit to £4m operating loss last year.
He commented that: “Brexit is the most impactful thing on our business because of the sheer incompetence of the government.
“You can’t be the party of business and be anti-immigration. I believe we are heading into a recession and a lot of that has been caused by the government.”
Read more: Three-quarters of UK manufacturers report Brexit is damaging business planning and prospects
Constantine also gave an insight into the potential damage that no-deal Brexit could cause to the business, estimating a £2.6m World Trade Organisation tariffs bill whilst product stockpiling could cost another £1.3m.
The company has already set-up a new factory in Germany to handle EU orders which had previously been serviced from the UK.
Small businesses in Germany are being warned that too many are unprepared for Brexit and the potential disruption the UK leaving the EU will cause native firms.
The warning primarily centres on financial services and access to financial products.
Banks on the continent have been shifting market-related activities for some of their EU clients, such as currency swaps, away from London in preparation for Brexit to avoid disruption.
However, some banks have warned that they can only move clients’ businesses if they give the green light to do so which can require the renegotiation of contracts.
Some have admitted their advice is falling largely on deaf SME ears.
“Too many clients do not react at all”
Central bankers at Deutsche Bundesbank have issued a warning to small businesses and reminded them that they are ready to help them prepare – should they choose to take the time to do so.
Board member Joachim Wuermeling said: “The banks are approaching their clients which might be affected by Brexit. The snag is that the response is very limited.
“Too many clients do no react at all.
“Even if Brexit will be postponed, all EU companies, be them small or large, are well advised to check hidden financial links to the UK.”
However, the disruption should only cause small-scale gridlock, with Commerzbank’s head of corporate client development and digitalisation, Jan-Philipp Gillmann stating that: “Only a small number of new or existing trades will need to be transferred or migrated to another subsidiary or branch due to Brexit.”
Perhaps unsurprisingly, the general notion on this side of the Channel is that businesses have been preparing for Brexit, especially as the potential for a no-deal appears to be increasing.
Read more: Fishing industry urged to avoid no-deal exports catch
Around 40% of businesses said they were ready to enact on Brexit contingency plans at the start of 2019 according to the CBI, whilst data from OFX suggested that UK SMEs are planning to press on with EU exports despite Brexit this year.
If your business has little contingency planning for Brexit, deal or no deal, it’s not too late to put in place emergency measures and plans to negate where possible the potential short-term damage and disruption.
Contact Go Exporting today to find out how we can help, or read more about our Brexit consultancy.
UK fish exporters are being urged to sign-up to a new digital catch certificate service to ensure they’re able to continue selling to the EU in the event of a no-deal Brexit.
Advice published by the Department for Environment, Food & Rural Affairs this month said that businesses should take action now to avoid issues from 29th March onwards should a deal or article 50 extension not be reached, with the new digital catch certificate applying to most fish and fish products.
Catch certificates prove that fish have been caught within conservation and management measures for which all non-EU countries must present when trading into the European Union.
It’s the latest in a string of official advice published to guide the UK fishing industry and navigate the choppy Brexit waters, including advice on health and customs regulatory compliance in the event of a hard exit.
Read more: Strong appetite for British food and drink overseas
Export documentation that may be required following the 29th March include:
- catch certificates
- processing statement
- storage document
- prior notification form
- pre-landing declaration
Fish export businesses can find all the information they need on the digital catch certificate service and how to apply on the government website here.
The number of UK firms exporting, and the value of exports, has increased once more year-on-year according to the latest DiT data.
Figures from HMRC showed 110,800 VAT-registered businesses exporting last year, whilst the exports of goods across all four UK regions also increased.
Scotland led the export growth charts with a 5.6% rise in goods sold abroad, followed by 4.2% in Wales, 2.1% in England and 1.9% in Northern Ireland.
The value of goods sold over the last 12 months was a combined £305 billion, made up of £248.6 billion in the UK, £30.3 billion in Scotland, £17.2 billion in Wales and £8.9 billion in NI.
The average worth of exporting to UK businesses for the last quarter of 2018 stood at £780,000.
International Trade Secretary Dr Liam Fox said of the latest results that: “The continued rise in British exports across the country highlights the true exporting power across all UK regions.
Read more: 71% of UK manufacturers have an export-based growth strategy
“This is fantastic news for British businesses, who should be encouraged by these figures to take advantage of the clear opportunities available for growing their business overseas.”
If your business is yet to start exploring the proven benefits of exporting and the business growth opportunities it provides, find out how Go Exporting can help open a world of opportunities here.
Over 70% of UK manufacturers have an export-based growth strategy for their business.
That’s according to the latest Annual Manufacturing Report data from The Manufacturer, whereby 71% of manufacturers are actively seeking new markets to penatrate.
The news is positive and highlights the resilience and optimism of exporting manufacturers in the UK in the approaching wake of leaving the European Union, although it should also be considered that many UK exporters trade outside of the EU – over 50% in fact according to the Office for National Statistics (2016).
The report really highlighted a split in outlook and sentiment when it comes to future business, and that split, unsurprisingly, was Brexit.
As we reported here, some 71% of businesses who answered the survey say that Brexit uncertainty is damaging strategic planning and business prospects. A further 54% reported that Brexit would cause severe issues for their business.
But when focusing inwards at their own business and capabilities, the sentiment is far more positive.
For example, nearly 80% of respondents say they have confidence they have the capacity for growth. Also, 67% say they are confident overseas trading conditions are good for promoting business growth.
The report also noted that businesses aren’t quick to lavish praise on the government’s support of exporters, with 55% saying it should do more to promote exports and exporting firms.
And on one of the ways the UK government could do more, especially after 29th March, subsidising any future trade tariffs was noted.
Read more: Three quarters UK manufacturers report Brexit is damaging business planning and prospects
As Andrew Bennet, managing director of Allan & Bertram told The Manufacturer: “If we end up with tariffs on exports to Europe, I assume there would be similar tariffs applied to imports from Europe, so I expect the government to allocate this revenue to exporting businesses to compensate for the export tariffs and allow us to remain competitive.
“Not only does the government need to support the business economy in practical terms, it needs to be seen to be doing so.
“If the government worked with businesses to get us all prepared, that could send a very powerful message to the UK and the EU negotiators – ‘We are ready!’”
Almost three-quarters of UK manufacturers have reported that Brexit is causing damage to long-term strategic planning and future business prospects.
That’s the Brexit headline from the latest Annual Manufacturing Report produced by The Manufacturer in which 71% said Brexit uncertainty is damaging strategic planning and business prospects.
Commenting
“Post-Brexit, a triple blow of higher import costs, added paperwork, and a likely recession.”
And the number of manufacturing firms who believe Brexit will cause severe disruption for the manufacturing sector in the UK has grown. In last year’s report, some 54% of respondents felt that Brexit would cause severe issues for their business.
That figure has now grown to 64% over the last 12 months.
However, and interestingly, 35% of firms don’t believe Brexit will cause any chaos and that leaving the EU will trigger a period of growth and further investment.
Read more: Nearly half of UK forms not prepared for chaotic Brexit
And in the face of adversity, manufacturing heads are optimistic about the industry’s ability to pull through, with 77% saying that, whatever the outcome of Brexit or the type of Brexit we will see, the UK as an industrial nation has the drive to succeed.
How prepared is your business for Brexit?
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