Although 64pc of SMEs believe that Brexit has negatively impacted the UK economy, 68pc also think it has had an adverse effect on British society.
Furthermore, 25pc said the treaty has directly affected their business, according to new data from cloud accounting provider FreeAgent. The company found that over half of SMEs have experienced shrinking customer bases and 43pc have been impacted by supply chain issues and were finding it harder now to obtain cost-effective supplies or products for their business.
Additionally, 20pc of SMEs said their costs have increased since Brexit, especially on imported goods, while 16pc have suffered a talent deficit and are still struggling to recruit staff.
Roan Lavery, CEO and co-founder of FreeAgent, comments that, without doubt, Brexit has had a substantial impact on all businesses, large and small. However, he says, the research highlights how the challenges presented by Brexit are now being felt increasingly by SMEs.
Lavery adds that leaving the EU has resulted in significant obstacles that threaten the survival of these businesses, such as supply chain issues, additional red tape and higher costs.
To demonstrate how SME owners feel about Brexit, nearly one in five (19pc) had considered closing their business during the Brexit process and 20pc believed their business would not survive the departure from the EU.
Govt must do more to support SMEs
Even now, almost half (46pc) of SME owners are concerned about the future of their business. The anxiety is greater for younger business owners, with 57pc of 18-34-year-old entrepreneurs uncertain as to the future of their company.
At the same time, more than 50pc believe that Brexit is having a greater negative impact on SMEs than on large businesses. While 68pc think the treaty has resulted in a more divided United Kingdom, the figure rises to 79pc if they agreed that Brexit has had a negative effect on the UK economy. To sum up, a majority of SME owners have some concerns about the future of their business.
Lavery says the responsibility rests with the Government to support these businesses, which make a significant contribution to the wider economy. Many SMEs are still facing uncertain times as the country emerges from a pandemic-stricken world, he adds.
In view of this and the concerns voiced by SME business owners in this research, government support is evidently still needed to overcome these worries, he concludes.
Post-Brexit payments industry ‘Wild West Culture’
Once the UK left the EU, some payment providers reported so-called IBAN discrimination as a number of companies across Europe started to refuse Euro account bank details if they contained the country code ‘GB’. Sending a payment to Eurozone countries now results in additional charges. Although the fee is nominal, it can mean that payments fall short of the required full amount being sent.
Anastasia Demetriou, general counsel at IFX Payments in London, warns that the cross border payments industry is a potential ‘breeding ground for financial crime’ without much-needed regulation post-Brexit. Part of the problem, she says, is that there is no global consensus; different juridictions have varying attitudes to consumer risk, consumer protection and the role ‘top-down’ governance should take in mitigating risk.
A good regulatory framework, she adds, will seek to ensure that customer funds are safe and that sensitive data is secure. In addition, it will seek to maintain the sector’s reputation and take an active role in the prevention of financial crime, which will further promote consumer confidence.
Demetriou stresses that a lack of standardised regulation in the payments industry could allow ‘a Wild West culture’ to develop. She believes the sector needs to ‘retain its legitimacy but also be given the tools and freedom to innovate’. And finding that delicate balance on a global scale is ambitious but necessary.