A UK tax and advisory firm has called for the extension of the Brexit transition period which it believes will provide much-needed reassurance to the economy.
David Hough, a business advisory partner at Blick Rothenberg, said it was disappointing that the government was refusing to countenance extending the deadline for a trade deal beyond the current deadline of 31 December.
“Both the UK and the EU have more pressing concerns at this time and extending the transition period, ideally for at least a year, would provide some much-needed reassurance to the economy, and just as importantly allow government to focus on matters currently at hand.
“The government may well ultimately secure a good trade deal but now is not the time for grandstanding. Business needs reassurance now as it contemplates how to come out of the lock down.”
Hough said that over the past few weeks business owners had been working out how to address the immediate challenges they were facing of generating short-term cash flow and finding the best way to look after as many employees as they could.
“The risk of a second peak later in the year should not be discounted and the ability, and means, to negotiate a trade deal would be significantly impacted by this if the UK has allowed 1 July 2020, the date an extension has to be legislated, to pass. Allowing for the time required for approvals by the UK and EU states that means that an extension needs to be agreed in principle by probably no later than the end of May,” he added.
“The reassurance that an extension would bring is important because certainty improves the quality of forecasting which makes lenders and investors more willing to part with their money, giving businesses the platform to trade with confidence.”
