More than 60% of businesses are still struggling with the impact of Covid-19 and the uncertain economic outlook, coupled with the challenges posed by Brexit, according to the latest research by the Association of Practising Accountants (APA).
The research found that 8% of the 172 businesses surveyed across the North West, North East and Yorkshire, between April and May, reported that it is likely they will have to make redundancies in the next three to six months, though this is below the national average of 11%.
Meanwhile, 15% reported a “negative or very negative” impact on their business since the UK left the EU, with 14% citing Brexit supply chain issues as their biggest challenge.
However, 87% of businesses are either confident or somewhat confident they would be able to access the finance they need over the next six months, with anecdotal evidence suggesting the major banks were continuing to lend.
Paul Dickson, CEO and managing partner of APA member firm Armstrong Watson, said: “As the country continues on the roadmap out of lockdown, it is still a testing time for some business owners throughout our regions and across a variety of sectors. Added to this is the impact of Brexit which is highlighted in these results, with almost a quarter suffering as a result.
“Over the coming months, it is vital that the government maintains a flexible and targeted approach to business support focusing resources on those sectors where there is the greatest need. Owner-managed businesses form the backbone of the UK economy and need continued targeted support.”
He added: “Coming to terms with a potential new reality will be difficult but preparing for it is essential, whether that means utilising alternative funding, considering restructuring or optimising tax liabilities, these are just some of the many options businesses could take to aid survival.”