New research from leading business and financial adviser Grant Thornton UK LLP finds that, with the rapidly approaching transition deadline and the increasing likelihood of no deal, almost a third (31%) of 642 UK mid-market business leaders (polled over the first two weeks of December) do not expect Brexit to have any impact on their business in the next six months.
The research finds that mid-market business leaders are more immediately concerned about the negative impact of ongoing COVID-19 restrictions to trade and global travel, with 41% saying further lockdown restrictions would be bad for their business over the next six months, versus 22% for Brexit. Many of those surveyed welcomed the end of the Brexit transition period, with 38% even predicting Brexit would have a positive impact on their business.
Overall, 71% of respondents feel confident in their preparations so far and believe that their ongoing preparations are effective. Those expecting positive impacts from Brexit were most likely to feel confident in their preparations, while those expecting negative or no impact were far less confident.
However, with just days to go to the end of the transition period, a significant number of UK mid-market business leaders - one in four (24%) - do not feel confident that their business is ready for the upcoming changes. Twenty-two per cent of respondents say they expect Brexit to have a negative impact on their business in the next six months, while a further 9% were unsure of the impact it will have at this stage.
The biggest Brexit related worry for mid-market business leaders is legal and regulatory changes. This is followed by people related concerns such as recruitment and mobility as well as data challenges and tax and customs changes.
Dave Munton, Head of UK Markets and Clients, Grant Thornton UK LLP, commented:
“It is unlikely that any business will be able to totally avoid the impact that Brexit, especially a ‘no deal’ scenario, will have. Whether it’s the consequences to the UK economy and the strength of the pound, or the impacts on the day-to-day aspects of doing business in a global market, the effects of Brexit will hit different businesses, in different ways over different timeframes.
“While mid-market business leaders clearly feel that the end of the transition period will be a good thing, it is surprising to see that so many don’t believe there will be an immediate impact on their business. Our work with our mid-market clients, however, does suggest that while many businesses have successfully dealt with the unique challenges thrown at them over the last nine months, the uncertainty surrounding the short term consequences of Brexit has resulted in the deferral of some activity until more clarity is available.
“All business leaders have spent 2020 fighting the more immediate threats presented by the global pandemic. We see from the data that the big definable problems, such as further restrictions in terms of workplace safety, travel restrictions, people productivity, and looming regulatory changes, are higher up the mid-market leader’s list of potential threats than Brexit.”
*Censuswide (on behalf of Grant Thornton UK LLP) surveyed 642 senior decision makers in UK mid-market businesses between 1 December 2020 - 11 December 2020. The mid-market is defined as companies with an average annual turnover between £50million - £500million.