Certainly, if your small business is one of those making up 99.3% of all private sector businesses in the country, you will probably appreciate some guidance on the effects that Brexit is likely to have in both the short and long term, as we have attempted to explain below.
What are the advantages of Brexit for businesses?
In general, the arguments for and against Brexit from the perspective of British businesses are well-worn and familiar, and have persisted following the referendum. Proponents of the UK leaving the EU have long argued that British businesses are burdened by the ‘red tape’ brought by certain EU trade regulations, which often disproportionately impact small firms.
The expectation that the UK will, indeed, now leave the EU will therefore lead many to expect a loosening up of these regulations. It has also been argued that the UK no longer needing to contribute to the EU budget could enable the reduction of business taxes.
Furthermore, it has been suggested that a post-Brexit UK could retain its membership of the European Economic Area (EEA) in an arrangement like Iceland’s, thereby enjoying such advantages of the EU as access to the single market, while freeing British businesses of the EU’s red tape.
What are the disadvantages of Brexit for businesses?
However, many fears have also been voiced about the consequences for businesses of the UK leaving the EU, not least the prospect of a gradual rise in the expense and complexity of trade if unfavourable tariffs are imposed on British goods and services.
British firms have also long been able to compete on a level playing field with the continent’s other businesses due to the lack of import taxes within the EU, with the uncertainty alone caused by the UK’s impending departure risking EU businesses deciding to cut back investment here.
In addition, the various free trade agreements that the UK presently enjoys with non-EU countries may no longer be applicable, raising the prospect of tough renegotiation.
What impact will Brexit have on various business sectors?
Different parts of the UK economy have already been affected in different ways by the UK referendum and the subsequent vote to leave the bloc.
The retail sector, for example, has already struggled markedly in recent times due to changing shopping habits, with the uncertainty surrounding the referendum even before the vote took place leading to the first drop in fashion sales in seven years as customers decided to reign in their spending.
For the travel and leisure sectors, however, there is a slightly more mixed picture. BA owner International Airlines Group and Easyjet have already warned about the adverse effects of Brexit, with the latter indicating that it could relocate its base from the UK.
This contrasts with the situation for many British bed and breakfasts and small hotels, however. Hotel reservations software specialist Eviivo, for example, has suggested that such businesses could be in greater demand due to the combination of more ‘staycationers’ and foreign visitors as a result of the weak pound.
With so many questions about the impact of Brexit on British businesses still to be answered, only time will tell in terms of the longer-term effects for SMEs across the sectors. One thing, however, is for sure: British business and its relationship with the European continent will never be quite the same again as a result of the UK and the EU parting ways.