Fewer than one in five small firms fearing end of transition have prepared, new study reveals

According to FSB's new research, a slim 18 per cent of firms are prepared for Britain's EU exit, compared to 21 per cent last September when the UK was told to prepare for a no-deal outcome.  

When asked about barriers to preparedness, firms most frequently cited uncertainty regarding the future relationship with the EU – more than two thirds (68 per cent) raised this as an issue.

“With only two weeks to go, small firms don’t have the time, money or clarity they need to prepare for the end of the transition period even if they want or need to," said FSB national chairman, Mike Cherry. 

“More than four years on from the referendum, and after such a torrid 2020, we urgently need to see negotiators strike a pro-enterprise free trade agreement in the days ahead, one that includes an ambitious small business chapter," Mr Cherry warned. 

The FSB's survey revealed that more than one in five (22 per cent) businesses that lack the time and resources to prepare for the EU exit do so due to the economic impact of COVID-19, which has held them back in this area.    

Among those that have managed to make some preparations, more than a quarter (27 per cent) admitted that the cost of doing so had been in excess of £2,000. One in 10 said the cost had exceeded £5,000.

“Fundamentally, if the government wants firms to make additional preparations over the coming days and into the new year, it needs to put its money where its mouth is.

“Transition vouchers - £3,000 grants that firms can use to buy the tech, training and advice needed to navigate a new trading relationship – would make a massive difference," Mr Cherry said. 

Among businesses that trade in goods, more than half (58 per cent) said they did not have experience of completing certificates of origin, which small firms will need to do under any deal, to unlock preferential zero tariffs from 1 January.   

Moreover, the FSB revealed that some one in five (23 per cent) of those fearing the end of transition are stockpiling, exacerbating a squeeze on capacity at UK ports in the run-up to Christmas.    

“The fact that so few small firms that trade with Europe are familiar with rules of origin requirements is deeply concerning, and highlights the need to phase in implementation of changes across some of these more technical areas," added Mr Cherry.

“The clock is ticking more loudly than ever before. It’s time for negotiators on both sides to get a free trade deal done.”