UPDATE 1-UK companies would incur tariff costs after no-deal Brexit - survey

(Adds government response)

LONDON, Sept 18 (Reuters) - Almost 40% of British businesses with suppliers in the European Union have signed "Brexit clauses" to allow prices or other terms to be renegotiated if trade tariffs return after a no-deal departure from the bloc, a survey showed on Wednesday.

The Chartered Institute of Procurement & Supply (CIPS) said the survey of 817 supply chain managers in Britain and the EU showed that British firms would incur the cost of any tariffs when buying parts from the bloc, potentially pushing up prices.

"These potential additional costs are being written into contracts ahead of time," CIPS economist John Glen said. "Where this would be particularly damaging is SMEs (small and medium-sized enterprises) who are not flush with cash."

The Department for International Trade said in the event of a no-deal Brexit a temporary tariff measure would mean 86% of total imports would be eligible for tariff free access.

"This is a temporary measure and we will be monitoring the economy closely, as well as consulting with businesses to decide what our tariffs should be after this transition period," it said.

British companies are struggling to prepare for Britain's departure from the EU - the country's biggest trade upheaval in half a century - due to extreme levels of political uncertainty.

Prime Minister Boris Johnson has vowed to take Britain out of the world's biggest trading bloc by Oct. 31 with or without a deal, but opposition lawmakers are trying to force another delay.

The survey, which monitors businesses in sectors including aerospace, construction, food and medical, also found only 22% of respondents among British firms with EU suppliers believed they had completed the paperwork to trade outside the bloc. (Reporting by Kate Holton; Editing by Mark Potter)