Brexit Puts One-Third of SMEs at Risk of Closure

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Brexit Puts One-Third of SMEs at Risk of Closure

More than two-fifths of small businesses in the UK claim that Brexit will or already has resulted in redundancies.

According to new research, around a third (37 per cent) of UK SMEs claim Brexit could cause the closure of their business.

More than two-fifths (44 per cent) of small businesses believe that Brexit will or already has resulted in business making employees redundant. This statistic comes from research by business payments firm Equals Money.

Over three quarters (76 per cent) of 1,050 SMEs, that participated in the survey, have reported increased prices from foreign suppliers, and more specifically a third (33 per cent) commented that suppliers have increased their prices by more than 10 per cent. More than half (53 per cent) believe that Brexit has caused higher shipping costs.

23rd June marks the five-year anniversary of the Brexit referendum, when the UK voted to leave the European Union, with a majority of 52 per cent. Officially, Brexit first started in January 2021, but it wasn’t until 1st May 2021 that the new EU-UK Trade and Cooperation Agreement (TCA) came into effect. The relationship between the UK and the EU is now directly affected by the free trade agreement.

However, not all small businesses have a negative opinion about Brexit.

Nearly half of the businesses surveyed (46 per cent) said that the new EU-UK trading agreement could or has already resulted in them selling more and more than a third (35 per cent) believe that Brexit has positively affected their business.

The government has launched the SME Brexit Support Fund, which is a grant of up to £2,000 for small businesses to spend on training and professional advice related to imports and exports. However, more than a third (37 per cent) of those surveyed have not even heard of this fund. Despite, the two fifths of SMEs who require help exporting to the EU (45 per cent) and importing from the EU (42 per cent).

The chief economist at Equals Money, Jeremy Thomson-Cook, has commented: “It was always going to be a challenging to get all businesses to transition to new regulations and processes, but to have SMEs say they’re battling increased prices and making potential redundancies, on top of the impact of the pandemic, has the potential to depress the UK’s recovery from the pandemic.”

“SMEs are the lifeblood of the UK economy, so we must give them all they need to thrive in a post-Brexit world. That includes government advice and support, financial service providers lending their expertise and providing better service, and all companies involved in exports and imports being clear on price and margins.”

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