Brexit yet to have a significant effect on insolvency, according to R3

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New research by the insolvency and restructuring trade body, R3, has revealed that less than a fifth of businesses (16 per cent) in the UK have been negatively affected by the vote to leave the EU.

The same study found that three-in-four UK businesses (74 per cent) had yet to feel any financial impact, while 5 per cent of businesses, equating to around 85,000 companies, had seen a positive financial impact.

The figures are from a survey of 500 key decision-makers and were conducted by market research firm BDRC and R3.

In response to these findings Andrew Tate, president of R3, said: “The immediate shock of the referendum result was much briefer than expected, and many businesses – and importantly, consumers – have adopted a business as usual approach since then.”

“The UK is, of course, still a member of the EU, so the impact of the vote itself will be limited for the time being. When we find out what Brexit actually means, things might begin to change.”

“In the short-term at least, there are likely to be one or two instances of ‘Brexit’ being used as a bit of a convenient excuse by companies when they run into trouble.”

Andrew Tate added: “That said, Brexit will be causing genuine problems for a significant minority of companies, and it will be benefitting others.

“The main reason for this is the sharp fall in the value of the pound, importers will have been hurt, while exporters may have seen an increase in demand for their products. Uncertainty over the future of the UK-EU relationship may put some important deals on hold, at least temporarily.”

“Anecdotally, while our members say they are yet to see any increase in Brexit-related appointments, some have reported an increase in calls from worried business owners looking for advice.”

“While a number of recent surveys have reported business confidence falling since the vote, that doesn’t appear to have yet translated into a financial impact for most businesses.”

According to the study those most likely to have seen a negative financial impact from the referendum result are large companies employing 251 or more people, of which 23 per cent of large companies (2,000) said they had already been affected in some way.

Andrew Tate said: “Larger businesses have much more of a direct exposure to Europe or are much more likely to import materials than the UK’s smaller businesses. They will bear the immediate brunt of any Brexit effect, whether positive or negative.”