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Financial support needed for business Brexit adjustment

29 Dec 2020

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The Institute of Directors has urged the Government to ‘step up to the plate’ and support SMEs frantically trying to adjust to Brexit.

The business leaders’ group called for fiscal support to help businesses, such as vouchers to help smaller firms access specialist advice or improved tax reliefs. The support would run into the new year to facilitate and speed up the adjustment process.

The IoD has campaigned over the past four years to get the UK’s fiscal support for Brexit planning and adjustment at least on a par with its European neighbours, where similar schemes have long been in place.

Allie Renison, Senior Policy Advisor at the IoD, said:

“The absence of a genuine implementation period means businesses have an enormous task to adjust rapidly to Brexit proper. With the end of transition now upon us it is beyond critical that Government step up to the plate to help the effort.

“While there has been some Government assistance for customs purposes, this only covers a fraction of the issues companies face. There is a much bigger panoply of firms across different sectors who are now left scrambling to adjust. We also know from our research that many businesses, particularly in light of the pandemic, couldn’t adjust properly until changes were known so the need for this support will continue well into the new year.

“We have long argued support could take the form of vouchers to help SMEs access the specialist advice they need in a number of areas. This kind of measure was provided long ago in countries like Ireland and the Netherlands. Alternatively, the Treasury should look at making the tax treatment of Brexit adjustment activity more efficient. Either way, Government must not sit on its hands.”

Further details

Under the IoD’s proposed voucher scheme, small and medium-sized businesses could submit online applications for immediately redeemable vouchers to purchase legal and professional advice in order to adjust to Brexit changes.

The scheme could target SMEs, with firms submitting applications for grants via an online form. Qualification criteria for the grant would also include that the business has a satisfactory trading record and the voucher must be redeemed against Brexit-related activity.

Over half of IoD members have previously said they would be likely to take advantage of financial support to help with their preparations, and voucher systems have precedent in the Netherlands and Ireland. A grant of between £2000 and £3000 based on the InterTrade Ireland and Enterprise Ireland rebates could be spent on Brexit-related advisory services from approved suppliers.

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