Dame Carolyn Fairbairn, head of the CBI, has stated that any buffers that businesses had built to cope with the additional cost and planning of a no-deal exit from the EU customs union and single market had been exhausted by the COVID-19 pandemic.

"The resilience of British business is absolutely on the floor," she is quoted as having said, "every penny of cash that had been stored up, all the stockpiles prepared have been run down. The firms that I speak to have not a spare moment to plan for a no trade deal Brexit at the end of the year - that is the common sense voice that needs to find its way into these negotiations."

The fourth round of negotiations between the UK and EU ended last week with both sides suggesting that very little progress had been made, and that key sticking points remain (such as fishing rights and commitments to maintain a "level playing field" over regulation and competition). 

The deadline for the UK to request an extension to the transition period, which is set to end on 31 December 2020, is the end of this month. Yet the UK Government's message is that, despite the disruption caused by COVID-19 and lack of progress in the negotiations to date, they will not request an extension. 

Spokespeople for the UK Government are quoted as saying "Whatever happens, we will be leaving the single market and customs union at the end of this year. We have taken unprecedented action to support businesses through this pandemic and to ensure the UK's economic recovery is as strong and as swift as possible. Extending the transition period would simply prolong the negotiations and create more uncertainty for businesses."

This means it is increasingly likely that the UK will leave the EU at the end of this year, and potentially more likely that we will do so without a deal - reverting to trading with the EU on WTO terms. However, even if the UK and the EU were to conclude some form of trade deal, the impact on trade will still be significant.  

So what is the advice is for businesses? 

Firstly, businesses should look to understand the key differences between a no-deal Brexit and a trade-deal Brexit, as well as the impact of each on trade. Secondly, they should continue, or begin if they have not already done so, planning for how either form of Brexit will impact them and their business, and what mitigation steps they can put in place. 

However, as noted by the CBI, with many businesses' resources dedicated to COVID-19 contingency plans, Brexit preparation clearly is an increasing challenge...