What benefits will Brexit bring to small businesses?

How could businesses be affected post-Brexit?

As Britain prepares to leave the European Union, Parliament needs to take the opportunity to further support small businesses, according to new statements.

Responding to Treasury Select Committee Chair Nicky Morgan and Labour MEP Mary Honeyball’s concerns about potential changes to the way VAT is collected in the UK after Brexit, officials are being urged to take note of the country’s growing small businesses to help ease pressures expected from the departure from the union.

Arguing that VAT is the most time-consuming tax to manage, small business expert Mike Cherry believes the strain should be lifted as much as possible to help encourage the growth of SMEs.

“If we move to an environment where small firms are forced to stump up for VAT on products bought from the EU before having the chance to recover those costs through their own sales, that could create real cash flow issues and add further complexity to the system,” said Mike Cherry, the national chairman for the Federation of Small Businesses. “Small firms are already having £18 billion withheld from them due to the late payment crisis.”

Amidst fears that everything from recruitment and retention to corporate travel will be affected by Britain’s exit from the EU. As Europe has been largely responsible for VAT rules in the country, leaving European Parliament could provide a massive opportunity to reassess rules, so long as it doesn’t negatively effect trade with the rest of the continent.

“Maintaining frictionless trade with the EU needs to be the top priority for Brexit negotiators. Nine in ten small firms that do business internationally have ties to Europe,” continued Cherry. “Agreeing a time-limited transition period for the years after the UK’s withdrawal from the EU is absolutely vital to providing these businesses with some stability.

“We look forward to working with the Chancellor on the VAT consultation announced at the Autumn Budget to help reform a tax which currently places huge administrative burdens on small businesses.”

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