Icas tracker shows most UK firms not planning for Brexit

Icas chief executive Bruce Cartwright called for 'much needed clarity' surrounding Brexit. Picture: Contributed
Icas chief executive Bruce Cartwright called for 'much needed clarity' surrounding Brexit. Picture: Contributed
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Only a third of large businesses and one-fifth of small firms in the UK are planning for the impact of Brexit, prompting finance professionals to call for more clarity surrounding the process.

The latest Brexit tracker survey from accountancy body Icas and legal firm Brodies found that just a third of bigger businesses have started “scenario planning” for the potential impact the UK’s departure from the EU may have on hiring and logistics.

Slightly more, 43 per cent, have begun preparing for regulatory change, according to the survey.

Among smaller organisations, classed as businesses with fewer than 250 employees, eight out of ten said they had taken “no action” to prepare for Brexit.

The research cited lack of clarity as a potential factor in preventing companies from making Brexit scenario preparations, as it revealed the majority of businesses did not understand several of the key elements the UK government is currently negotiating with the EU.

Only 32 per cent described the customs partnership as “very or fairly clear”, with just 26 per cent giving the same rating to the “common rule book” covering trade in goods.

Meanwhile, confidence that the UK government can negotiate a free trade deal with the EU is waning, the survey said.

The number of chartered accountants who believe the government will be able to negotiate a free trade agreement has fallen to 29 per cent, down from 36 per cent in autumn last year. The number of respondents who selected “don’t know” has doubled, rising 9 per cent last autumn to 18 per cent this summer.

Despite these changes, participants’ preferences regarding the future relationship between the UK and EU remained stable, with 62 per cent preferring that the UK remains in the single market, 5 per cent wanting the country to stay in the EU customs union, and 26 per cent favouring a free trade agreement with the bloc.

Bruce Cartwright, Icas chief executive, commented: “It has always been the case that ‘nothing is agreed until all is agreed’.

“Icas members’ concern over the outcome of the Brexit process is understandable, since there would appear to be some fundamental areas of disagreement with only a few months to go.

“There is, however, a clear shared objective to reach agreement and deliver much needed clarity.”

Christine O’Neill, chairman at Brodies, added: “Many small and medium-sized enterprises simply do not have the resources to ‘scenario plan’ or to invest in contingency measures in anticipation of Brexit.

“Rather, they will rely on industry bodies and on government to provide guidance and support.”

She added that businesses should pay close attention to the guidance and proposed orders being released over the next few months under Brexit legislation.