One in five SMEs is concerned about Brexit regulations in 2021.
While the bulk of businesses we talked to were apprehensive about further Coronavirus restrictions, the second biggest worry by far was Brexit. And it’s clear to see why.
Since the end of our transition from the EU, we’ve witnessed deliveries delayed due to customs paperwork, retailers struggling to find new supply chains, and logistic companies halting shipments.
As a result, more than half of all companies (57%) surveyed said they lack Brexit legislation knowledge.
This is further evidenced by the 85 percent of businesses that aren’t up to date with VAT changes and customs duty requirements.
Statistics also suggest that many SMEs are waiting in legal limbo as a result of changing data laws.
Indeed, a quarter (23%) declared that new data regulations could disrupt their operations, particularly those working in insurance (37%), energy (34%), and engineering (32%).
Lack of knowledge around Brexit legislation and requirements is a concern
Brexit process changes for imports and exports
More than one in five businesses (22%) expressed concern for how Brexit could affect their cash flow. Unfortunately, the economic hardship brought about by Coronavirus has only exasperated matters.
Energy businesses and utilities are most concerned with how Brexit could affect cash flow in 2021 (32%).
Nearly a third of those working in the energy sector (32%) say the litany of paperwork and supplier disruptions caused by Brexit could damage their finances. Likewise, the environmental and agricultural industry was the only sector to show more concern over Brexit (30%) than Coronavirus (21%).
The least pessimistic were businesses trading in beauty, wellbeing, and performing arts, where only 15 percent thought Brexit would hinder their cash flow.
I am worried about how Brexit could affect my cash flow
I’m concerned about new data regulations regarding leaving the EU
I rely on EU/EEA/Swiss-national employees and I am concerned how Brexit regulations could affect this
Now the UK has come out of the Brexit transition period, people arriving in the country have to apply for access through a new immigration system.
These new rules have caused headaches for businesses who rely on EU/EEA/Swiss-nationals for work.
The media and internet sector, in particular, expressed fear over how these changes would affect operations, with nearly half (48%) employing people from outside the UK.
Likewise, SMEs working in information research (47%), information technology (45%), and business consulting (43%) share the same unease.
Another hot topic of discussion between SMEs was custom duties. The most concerned were those operating in healthcare, where 45 percent said additional custom duties could affect their sales or supply chain.
Similarly, 42 percent of businesses working across the charity, voluntary, beauty, and wellbeing sectors vocalised fear about how changes could impact their finances. What’s more worrying is that only 15 percent of SMEs said they’re up to date with changes to VAT and custom duty requirements — once again suggesting that there is Brexit knowledge missing from many small businesses.
I’m concerned Brexit additional custom duties could affect my sales or supply chain
I’m concerned how Brexit will affect my imports and exports
I’m up to date with changes to VAT and customs duty requirements for Brexit