By Jaspreet Kulair
The Brexit referendum was announced on the 24th of June 2016 leaving many of the UK’s small and medium sized business or enterprises unsure of the financial stability of ones business, after the referendum results are triggered on the 29th of March.
For many SME’s trading outside of the UK is one of the lesser issues involved, but for those that do trade outside of the UK, it is likely that export from Britain will drastically decrease due to the tariff the UK is likely to place on European import, in order to encourage trading with in the UK.
The majority of the concern lies in employment, although remaining in the EU creates a lot of ‘red tape’ concerning small business and their employees, it could also mean a drastic dip in unemployment for EU citizens if certain legislations are amended. Total employment in SMEs is15.7 million; 60% of all private sector employment in the UK according to National Federation of Self Employed & Small Businesses statistics. This could reduce if EU citizens are not provided with the privileges they have access to today.
In terms of finances it is said that Brexit could lower the value of the British pound, having a knock on effect for interests rates for borrowers, causing expenses to rise for small business owners.
Although it would mean the UK would be able to create its own trade agreements.In a recent survey conducted by YouGov UK ,Small business owners were asked if they would favour remaining in or leaving the EU, in this instance 47% of owners voted to remain where as 42% voted to leave. With the majority voting to remain in the EU it is evident that small business owners are not on board with the uncertainty that accompanies the EU referendum.
When looking at the financial landscape of the UK it is evident that small businesses have a key role in its up keep, with small businesses accounting for 99.3% of all private sector businesses at the start of 2016 and 99.9% were small or medium-sized. If the misgivings of the referendum on small business reign true, this figure is likely to decrease.
The future of small businesses is evidently uncertain when concerning the Brexit referendum, the first Brexit summit will be held in April 2017, where UK officials will iron out the guidelines that will affect the future of the UK’s small business.