Brexit: UK tech firms aren't prepared for leaving the European Union with no-deal

Large numbers of small and medium-sized tech businesses haven't made any preparations for the UK leaving the EU - and many believe the government isn't listening to the concerns they have ahead of Brexit.

Another Brexit delay continues to fuel confusion in the UK ZDNet's Danny Palmer tells TechRepublic's Karen Roby about the latest Brexit decision that is, yet again, delaying the UK from leaving the European Union until October. Read more: https://zd.net/2IzAH5Z

Unless an agreement is reached soon the UK could be leaving the European Union without a deal on 31 October  – but many organisations in the UK technology sector haven't made any preparations for the country crashing out of Europe.

Research by industry body techUK found that while some UK-based technology firms are making preparations for a no-deal Brexit, many small and medium-sized enterprises (SMEs) haven't taken any active steps towards preparation for a no-deal Brexit when it could be a matter of weeks away.

When it comes to small businesses – those with under 50 staff – over half (53%) haven't taken any steps to prepare for a no-deal Brexit, while a third of medium-sized businesses – those with between 50 and 250 staff – have also yet to make any preparations ahead of 31 October.

SEE: The Brexit dilemma: Will London's start-ups stay or go? (TechRepublic cover story)  

According to the techUK survey, the top reason for medium-sized businesses not taking any steps to prepare for a no-deal Brexit is because they're not able to predict the implications of what it will mean for their organisations.

Almost 90% of large businesses say they've taken active steps towards no-deal Brexit preparations. The larger figure among big firms is due to these businesses being more aware of information and support ahead of the Brexit deadline.

However, only around a third of SMEs said they were aware of information from the government about Brexit, while just 15% of small businesses and 19% of medium businesses said they were aware that the government is supposed to be offering support.

The knock-on effect of this appears to be that many organisations aren't sure how to prepare and the majority believe that a no-deal Brexit will be negative for their businesses – two thirds of small businesses and three quarters of medium-sized businesses believe that a no-deal Brexit will have a negative impact on them.

Respondents to the survey cite recruitment as their main concern, with some organisations of the view that the uncertainties around Brexit have made the UK a less appealing place to work for EU nationals, which has led to additional competition to recruit homegrown workers.

SEE: Investments in UK tech startups hit record levels in 2019, despite looming Brexit

When asked what the government could to do help remove uncertainty around Brexit, a common response was to extend Article 50 to allow more time to prepare. Members also voiced concerns about leaving the Single Market and the impact it will have on their businesses going forward.

"In the run up to a possible no-deal exit on 31 October, it is vital that the concerns of SMEs are recognised by government," said Neil Ross, policy manager for digital economy at techUK.

"techUK presents this research in the hope that the findings presented translate into targeted assistance to ensure that SMEs in the tech sector are given the information and resources that they need to prepare," he added.

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