Despite many declarations, the long-term effect that Brexit will have on the UK’s small to medium enterprise (SME) businesses is still largely unknown.
After all, SMEs make up more than 99 per cent of our private sector business.
There will be challenges but it can also create opportunities, but this has largely been ignored by commentators so far, seeming to prefer the doom and gloom approach.
Research found that 30% of SMEs find raising finance to be the biggest obstacle to new business, with more than half of UK SMEs describe banks as being hostile to businesses.
The pounds depreciation may provide a solution by encouraging fresh investment, creating other avenues for growth thus encouraging private equity firms to invest more in UK business.
In fact, one in four SMEs report improved exporting opportunities due to the fluctuating exchange rate which is back-up by research from PayPal.
Also, are we heading for the predicted employment crisis? While this is a little melodramatic, we’re likely to see a shortfall in workers once we leave the EU.
VAT is a major concern. No VAT is currently levied on trade within the EU: it is only charged when goods are sold to the end customer. If the UK were to leave the EU VAT regime without agreement, businesses could be required to pay VAT upfront, for the first time. This change would create both cash flow and time burdens, which could be costly for SME’s
Service companies would need to become VAT-registered in each member state where they operate. At present, being registered in one-member state is sufficient to trade in all.
Watch this space for more information