UK businesses are not educating themselves on what Brexit actually means

Some companies have been been altogether ignoring vital preparations and contingency plans for Brexit

The most pressing issue for UK businesses of all sectors and sizes is finding the right staff (Getty)

“Nothing is agreed until everything is agreed,” so the UK and EU negotiating teams say. While it wasn’t signed, last week saw the transition agreement endorsed by the European Council – meaning that firms across the UK and the EU can confidently make investment and hiring decisions over the next three years.

The trouble is that companies have not only been waiting to enact expansion and investment plans – many have also been ignoring preparations for Brexit altogether.

Large, well-resourced firms have both the time and the capacity to analyse and plan for the ups and downs of the negotiations, as well as put contingency plans in place.

But what about SMEs (small- and medium-sized enterprises)? When you are a business with 50 employees, focussed on making a profit at best or making ends meet at worst, you will be dealing with issues as and when they arise.

Over the last two years, many firms have had to simply absorb higher input costs due to the depreciation of sterling. Most are just getting on with their day-to-day job, with any “extra” time being spent on trying to fill gaps in staffing – the most pressing issue for UK businesses of all sectors and sizes.

Only a minority have started thinking about administrative costs related to border checks, potential exposure to regulatory changes and increased VAT burdens. While we have not had much clarity yet on the future UK-EU relationship, we know that we are leaving the EU VAT area, and that we will no longer be in a customs union.

To prepare for changes, firms will need to find more working capital, apply for guarantees from their banks, make new arrangements with freight forwarders and even potentially decide to move some of their operations to the EU. All of this takes time, money, as well as a thorough review of their existing arrangements. This means that transition is not extra time – it is the minimal time necessary to prepare for the changes ahead.

The same applies to governments both in the UK and the EU – if we are to have a “minimal friction” system of customs checks in the future, then physical infrastructure such as inland clearance and IT systems for quick risk assessments must be implemented as soon as possible. But above all, governments need to start preparing people: educating companies in doing customs declarations, as well as making sure there are enough customs officers ready to support businesses. Failure to do so could risk leaving tens of thousands of SMEs that trade across the Channel unprepared when the transition period comes to an end.

Change is not to be feared – but it must be met head on, with shared business interests and realities always front of mind. Aside from the withdrawal agreement and the framework for the future relationship, it is this practical preparation – unsexy and administrative, but absolutely critical – that must be the priority for the UK government for the year ahead.

Anastassia Beliakova is head of trade policy at the British Chambers of Commerce