No-deal Brexit: Majority of cross-border businesses unprepared for EU crash-out
Only one in 20 international firms fully aware of ramifications for contracts if UK crashes out of Europe
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Your support makes all the difference.As few as six per cent of cross-border traders are prepared for cashflow issues in the event of a no-deal Brexit, a report has found.
New research has found that most are choosing to disregard the potential impact a no-deal Brexit could bring.
While the UK is due to leave the EU on 31 October, only six per cent of cross-border businesses have examined the possible legal implications for business contracts.
The consequences of market access changes could mean firms are exposed to significant additional costs, cross-border body InterTradeIreland said.
The trade body found that just six per cent of cross-border traders are prepared for cash flow and liquidity issues in the event of a no-deal Brexit. It has urged business owners to take steps to protect themselves.
“Ignoring Brexit is a bigger issue than not preparing for it," InterTradeIreland’s officer and director of strategy and policy, Aidan Gough, said.
“Failing to take into account how it may impact your business could be very detrimental down the line.”
There are about 20,000 cross-border traders on the island of Ireland.
A substantial proportion of these are micro-businesses, which are particularly vulnerable to changes in current trading arrangements and are more likely to be reliant on the cross-border market as their only export destination.
The latest research also shows continuity of supply is an additional problem that could hinder cross-border businesses and the ability to trade, but fewer than one in 10 have taken steps to interrogate their supply chain.
Tariffs are a further issue that could strike at the viability of small and medium-sized enterprises (SMEs) in the event of a hard Brexit.
InterTradeIreland’s latest business monitor highlighted that just 12 per cent of SMEs that trade across the border have looked at the possible impact of extra taxes on their business.
Mr Gough said that InterTradeIreland has launched a new campaign to encourage cross-border traders to plan for Brexit, adding that the research underlines the need for companies to start acting now.
“We want to reach as many SMEs as possible to help them prepare, that’s why InterTradeIreland is launching our new campaign,” he added.
“It recognises that Brexit is the elephant in the room and with the deadline of 31 October fast approaching, Brexit is now just too big to brush under the carpet."
The Department of Business, Enterprise and Innovation has been working with companies for more than two years to raise awareness of the key Brexit challenges, a spokesperson said in a statement.
“The department’s ongoing engagement and research indicates that the proportion of businesses preparing for Brexit is increasing, particularly among those businesses identified as most exposed to Brexit-related impacts, and that awareness of the key Brexit challenges is also increasing,” she said.
“Almost 60 per cent of Irish SMEs report a good understanding of the likely implications of Brexit impacts that are relevant to their business.”
The department said that a survey carried out in February this year suggested that planning for Brexit is increasing, with almost half of SMEs saying they have taken “some form of engagement” to prepare for Brexit.
“Among the most impacted businesses, progress is also being made, for example more than half of exporters indicate that they have a Brexit plan,” the statement added.
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