A survey of almost a thousand company directors by the Institute of Directors (IoD) has found that nearly a quarter of businesses are not prepared for Brexit and do not expect to be ready by the end of the transition period on 31 December 2020.
A further 21 per cent said they were still not ready, but hoped to be prepared by the start of 2021 when the UK will formally leave the EU single market and customs union.
The survey also found that 28 per cent of businesses didn’t think that Brexit would affect their company in any way.
Of the actions already taken by businesses to prepare, most had or were looking at building up cash reserves, with more than a third of respondents having done so already.
However, many firms still needed to obtain EU licences and authorisations to continue trading once the transition ends and new customs arrangements come into place.
Half of the businesses surveyed said that the Coronavirus pandemic would magnify the impact of a no-deal Brexit on their organisation, while less than one in 10 thought the reverse. The remaining businesses thought that it would have little or no effect.
Allie Renison, Senior Policy Advisor at the IoD, said: “The prospect of no-deal would be daunting enough, let alone dealing with it in the middle of a global pandemic. These disruptions won’t cancel each other out, if anything they would compound the pain for British businesses.
“When it comes to preparing for Brexit proper, directors’ hands have been tied by a number of constraints and competing pressures. Reacting to the pandemic has taken up so much of business leaders’ time and energy throughout the year. On top of this, much of the information companies need is still subject to negotiations.
“Brexit adjustments will further add to businesses’ cash flow challenges in the months ahead. The Government must look to how it can smooth that process. Financial support as seen in other countries, whether through vouchers to help access advice or through extending tax reliefs to facilitate that adjustment, would give small firms a much better chance of coping.”