More than a third of small firms in the East of the country believe that a no-deal Brexit scenario on October 31 will negatively impact them. 

According to new research from the Federation of Small Businesses (FSB), more than one in ten (12 per cent) believe that it will have a positive impact on their business.

Nationally, among those small firms that believe a no-deal scenario on October 31 will negatively impact them (39 per cent), only one in five (21 per cent) have planned or prepared for anticipated issues.

Nearly two thirds (63 per cent) don’t think they are able to plan.

Preparations for a no-deal Brexit has come with a high price with the average cost for these businesses that have prepared, coming in at around £2,000.

That average cost rises to £3,000 for smaller businesses that export and import. Just under one third (31 per cent) of prepared small businesses have stockpiled ahead of October 31 while 34 per cent report temporarily or permanently reduced profitability.

Just under half (46 per cent) of these firms, along with those that plan to prepare for no-deal over the next few weeks, think that the volatility in Sterling has negatively impacted their business.

Almost half (46 per cent) of small businesses, that believe they will be negatively impacted by a no-deal scenario, would welcome some form of financial support.

FSB National Chairman, Mike Cherry, renewed calls for the provision of financial assistance such as vouchers worth up to £3,000 to assist with preparing for a potential no-deal scenario, including supporting small firms in reaching new global markets.

Given the number of small businesses unable to take specific actions to prepare, he also called for wide-reaching measures in an early budget to boost small business cash flow.

These include a temporary reduction in VAT, an uprating of the employment allowance, an expansion of HMRC time to pay arrangements and extending the two year ‘retailers’ business rates discount of 33 per cent, to a wider range of smaller businesses.

Mr Cherry said: “As the risk of a chaotic no-deal Brexit on October 31 remains alive and kicking, it is worrying that many small firms have either not prepared or are finding that they can’t prepare.

“Ongoing uncertainty is to blame for preparations hitting the skids with the picture still not clear as to how the UK will leave the EU on October 31.

Until we get clarity, small firms must prepare for the cliff edge where possible, and make preparations for a no-deal Brexit.

“Preparing for this outcome is coming at a high price though with small firms being hit by an unstable pound and having to shell out money on a potential outcome that has been highly disruptive, remains uncertain and is unwanted.

"Government must use what little time is left to provide small firms with the support they need to navigate the unchartered and turbulent waters of a no-deal Brexit.

“Raising awareness is important, but not enough. The Government must also turn to meaningful financial support.

"This is desperately needed and would certainly provide a much needed shot in the arm for those firms that have already spent money preparing.

"For those firms that can’t prepare, we need broader support including cutting VAT and National Insurance, uprating the £3,000 employment allowance and extending the two year ‘retailers’ business rates discount of 33 per cent, to a wider range of smaller businesses.”