According to EY, only one in nine businesses have a good understanding of the risks of not being prepared and have mitigations in place and just one in six claim they have a good understanding but are simply not ready.

As equally concerning is that one in four have a poor understanding and have made little attempt to take any actions to prepare.

EY canvassed the views of over 2,200 international businesses – both UK and international headquartered – to gauge the extent to which businesses had put plans in place to mitigate the risks of trading in a post-Brexit world.

Sally Jones, EY’s Brexit strategy and trade leader, said: “Whether businesses’ lack of Brexit preparedness is a result of crisis fatigue, inertia, too little information, or complacency, the results are really concerning. With under 100 days to go until the UK leaves the EU there is little time to focus efforts and resource on the parts of their operations that are business critical.

“One of the reasons behind the lack of understanding of the risks could be the international nature of those businesses polled, with some of the respondents being UK subsidiaries with HQs located overseas. Businesses with executive boards who sit in overseas locations might not have the same knowledge and understanding of the potential damage that Brexit could have on their organisations if they fail to prepare.

“This is a call to arms for those UK subsidiaries of foreign parents to urge their boards to make the necessary investments and take the practical steps to mitigate the risks, in the little time they have left.”

Looking beyond December 31, businesses have predicted that customs and supply chain are likely to be the areas of their operations most impacted by Brexit (55%), while regulatory and legal aspects were way down the list of concerns, accounting for just over one-fifth (23%) of respondents.

Ms Jones said that while businesses are focusing on important areas, they might not be focusing on those business-critical aspects and need to re-assess to ensure there are no insurmountable barriers on Brexit day one.

She added: “It’s apparent from the businesses polled that many see customs and supply chain as the areas most likely to be impacted when the UK leaves the EU, but there are others that are potentially more critical.

“In a worst-case scenario, if businesses haven’t quite got their ducks in a row with customs, they may see additional costs and time delays to their operations post Brexit. However, if they fail to prepare from a regulatory and legal point of view, for example don’t have the necessary regulatory presence or authorisations to sell their products in an EU country, they won’t be able to trade at all and the consequences will be far worse.”

Faced with a once in a generation crisis, it is understandable that businesses have refocused their efforts away from Brexit to navigating and surviving the COVID-19 pandemic. Over 55% of respondents said that COVID-19 had impacted their Brexit preparations in some way.

Sally Jones cited four key reasons: Brexit committees had either been disbanded to focus on other more pressing concerns or personnel had been furloughed; stockpiles in anticipation of Brexit disruption had been burnt through in March when the UK’s supply chains came under intense pressure; cash reserves are so light as a result of the pandemic that there are no funds to rebuild stockpiles; and some businesses had to fundamentally change their supply lines at break-neck speed as trusted trade routes were closed or delayed following the outbreak of COVID-19.

Only one in 20 respondents thought that the Brexit negotiations would result in an ambitious and comprehensive trade deal, with the lion’s share of respondents (38%) believing there will be a no deal, but negotiations will continue.

Ms Jones concluded: “For many businesses, Brexit planning has really taken a back seat since the beginning of the pandemic, with survival from the immediate impact of COVID-19 taking much of their band-width and resource.

“But with so much hard work and resilience shown over the last six months to continue trading, we’re urging businesses to review the practical commercial actions they need to take that will, at the very least, allow them to transition into a post Brexit trading environment. Companies that have managed and survived the impact of COVID-19 can’t allow their lack of Brexit preparedness to be the final straw that breaks the camel’s back.”