The Federation of Small Businesses (FSB) has called on the government to introduce wide-reaching measures in an early Budget to boost small business cash flow in the event of a no-deal Brexit.
The FSB is calling for the provision of financial assistance for small businesses, such as vouchers worth up to £3,000 to assist with preparing for a potential no-deal scenario.
The lobby group has also called for a temporary reduction in VAT, an uprating of the employment allowance, an expansion of HMRC time-to-pay arrangements and extending the two year business rates discount of 33% to a wider range of smaller businesses.
Research carried out by FSB revealed that among small businesses that believe a no-deal Brexit will negatively impact them, one in five (21%) have planned or prepared for anticipated issues, while nearly two-thirds (63%) don’t think they are able to plan.
FSB national chairman Mike Cherry said: “As the risk of a chaotic no-deal Brexit on 31 October remains alive and kicking, it is worrying that many small firms have either not prepared or are finding that they can’t prepare.
“Ongoing uncertainty is to blame for preparations hitting the skids with the picture still not clear as to how the UK will leave the EU on 31 October. Until we get clarity, small firms must prepare for the cliff edge where possible and make preparations for a no-deal Brexit.
“Preparing for this outcome is coming at a high price though with small firms being hit by an unstable pound and having to shell out money on a potential outcome that has been highly disruptive, remains uncertain and is unwanted. Government must use what little time is left before 31 October to provide small firms with the support they need to navigate the uncharted and turbulent waters of a no-deal Brexit.”
Almost half (46%) of small businesses that believe they will be negatively impacted by a no-deal scenario would welcome some form of financial support.
Cherry added: “Raising awareness is important, but not enough. The government must also turn to meaningful financial support. This is desperately needed and would certainly provide a much needed shot in the arm for those firms that have already spent money preparing.
“For those firms that can’t prepare, we need broader support including cutting VAT and National Insurance, uprating the £3,000 employment allowance and extending the two year ‘retailers’ business rates discount of 33 per cent, to a wider range of smaller businesses.”
An HIM survey found that 27% of respondents are concerned about food shortages when the UK leaves the EU on 31 October, while 8% have already begun stockpiling.
The Association of Convenience Stores has published a briefing for the convenience sector to help retailers consider how their business may be affected in the event of a no-deal Brexit.