NEARLY three in 10 large UK businesses are considering moving activities to other European Union countries because of Brexit, or are doing so already, while small firms are signalling continued easy access to EU markets is crucial.

These key findings of two new surveys underline the major potential impact of Brexit on businesses big and small as Prime Minister Theresa May prepares to begin the formal two-year EU exit negotiation process by triggering Article 50 - a move expected next week.

The survey findings highlight the danger of a major shift of activities from the UK, and the importance to small businesses of being able to trade with key EU markets without tariffs or other barriers.

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Responding to a survey by the Institute of Chartered Accountants of Scotland, eight per cent of CAs in large businesses with 250 or more employees said their organisations were already transferring some activities from the UK to elsewhere in the EU because of Brexit. And another 21 per cent revealed their organisations were considering moving at least some activities to other EU countries.

About 40 per cent of more than 1,000 CAs polled, across businesses of all sizes, predict the UK Government will not be able to negotiate a free trade deal with the EU by the time Brexit takes place.

The survey, which appears in the latest issue of The CA magazine, found 59 per cent favour continued participation in the EU single market, although 98 per cent believe this will not be the outcome of the Brexit talks.

ICAS members highlighted the importance of minimising regulatory barriers and reaching a free trade deal with the EU in the Brexit negotiations, with large businesses highlighting a continuing ability to hire people from other EU countries for UK roles as crucial.

The other survey, published by the Federation of Small Businesses, shows 63 per cent of its UK members regard the EU as a priority market. This is significantly greater than the 49 per cent citing the US as a key trade destination.

Meanwhile, Australia, China, and Canada were flagged as key trade destinations by a respective 29 per cent, 28 per cent and 23 per cent of small businesses.

The survey found 27 per cent of small firms that currently export would be deterred from trading with the EU should any tariff - no matter how small - be introduced.

The FSB notes about one-sixth of its members in Scotland currently export.

About 45 per cent of small firms which export and 53 per cent of current importers find it cheaper to trade with the EU single market than with countries outside the bloc, the FSB survey shows.

The FSB notes around 20 per cent of small exporters trade exclusively with the EU. And its study finds non-tariff barriers – such as requirements relating to packaging or transportation – can also pose problems for smaller firms.

Andy Willox, the FSB’s Scottish policy convenor, said: “The UK and Scottish economies cannot afford to see a slowdown in exports. FSB is calling on the UK Government to secure the easiest, and least costly, access to the EU single market in the Brexit negotiations. Lots of first-time exporters regard EU markets as a training ground, and a lower-risk first step to realising their global ambitions.”

He added: “In addition, we cannot underestimate the importance of an arrangement which works for firms which import. Speciality shops and manufacturers need access to global suppliers so they can service customers.”