UK Markets open in 4 hrs 40 mins

The worrying evidence that UK businesses are unprepared for no-deal Brexit

Lianna Brinded
Head of Yahoo Finance UK
Photo: Getty

A bulk of British businesses are worryingly unprepared for a no-deal Brexit, according to new research by the British Chambers of Commerce (BCC).

The prominent lobby group, which represents over 75,000 businesses across the UK, conducted a survey of over 1,500 firms from across the country and found that “in the midst of conflicting political messages over the likelihood of no deal and remaining gaps in government guidance, 41% of UK businesses have not done a Brexit risk assessment.”

“Businesses do not want to see a messy and disorderly Brexit, but ongoing uncertainty means they must prepare for all possibilities as the October deadline looms,” said Dr Adam Marshall, director general of the BCC.

“Businesses are facing significant changes on multiple fronts, and need official guidance that is consistent, precise and easily accessible, enabling them to trade in any scenario. Yet, there are many areas where there simply isn’t enough clear and actionable information for businesses to mitigate some of the impacts of an unwanted no-deal exit.”

READ MORE: UK government makes major move that signals a no-deal Brexit

The biggest concern lays around three core schemes that businesses need to register to in order to maintain continuity of trade — many firms are unaware of them:

In late August, the UK government said it will automatically enrol UK businesses into a customs system that will allow them to continue trading with the EU in a no-deal Brexit.

Britain's Prime Minister Boris Johnson. Photo. RUI VIEIRA/AFP/Getty Images)

The auto-enrolment into the customs system will see all VAT-registered firms in the UK receiving an ID number (EORI) within the next two weeks via the tax man — Her Majesty’s Revenue and Customs.

However, the BCC says the UK government should now do the same for all these other schemes.

BCC campaigned successfully for the government to automatically issue EORI numbers, which are critical for trading across borders, to all VAT-registered businesses. Now, the British Chambers of Commerce is calling on HM Government to either automatically enrol or support businesses to access these other important customs and border facilitations.

READ MORE: UK chancellor unveils spending spree at fastest rate in 15 years despite Brexit

“Low levels of awareness around special customs and trade schemes are of particular concern, as this highlights the potential for disruption at borders in an unwanted no-deal situation,” said Dr. Marshall at BCC.

“Companies should be automatically enrolled or supported to enrol in these schemes to increase trader readiness. Our evidence yet again reinforces the importance of averting a chaotic exit on October 31st.”

Late last year, the Bank of England (BOE) warned that “many UK businesses are not well advanced in planning for a sudden transition to new trading rules.”

BOE governor Mark Carney said in November that:

  • Less than 50% of UK-based businesses have begun making contingency plans for a potential no-deal Brexit

  • Less than 20% of small UK businesses have worked on contingency plans

  • Up to 250,000 businesses have never completed a customs declaration form, which would be required after a no-deal Brexit to continue trading with the European Union