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13 September 2018

Extra costs and more red tape the risk of No-Deal Brexit

Responding to today’s release of no-deal Brexit technical notes, Federation of Small Businesses (FSB) National Chairman, Mike Cherry, said: “With each release of the Government’s technical notes, we get a clearer picture of how dangerous and damaging a sudden no-deal Brexit will be for our small businesses.

“What these technical notes highlight is the risk that in particular exporting and importing small firms will be hit with additional cost burdens and complicated levels of compliance that they simply can’t handle.

“Small businesses have been working hard to be compliant with new personal data protection changes such as GDPR. For many, this has come at great cost both in time and money. If we leave the EU on the 29 March without a deal, businesses using data for customer lists, or for selling products online, may be required to spend more time and money going through contracts and paperwork to figure out how they can legally continue to do so. This is time and money they can ill afford.

“The Information Commissioners Office (ICO) now potentially has a critical role to play in providing support and guidance for smaller firms to ensure that they remain compliant in the case of a no-deal scenario.

“Product testing is no different and having a situation where potentially small firms looking to sell certain products to the EU, which have been tested by a UK based body, now having to ensure their goods are retested by an EU recognised body, can only act as a barrier to easy trade. It will cost more, take longer and lead to extra regulatory hoops that small businesses may be forced to jump through.

“Our research shows that more than half of small firms consider non-tariff barriers just as important as tariff barriers in deciding where they import or export. The biggest concern being an increased administrative burden that they would bring.

“Our smallest firms simply do not have the capacity or resources to deal with added costs and administrative burden that an unplanned no-deal Brexit will bring.  We are fast running out of time to secure a business friendly Brexit that avoids this scenario and centres on a transition period.”