Small businesses in London are “facing a cliff edge” if the UK leaves the EU without a Brexit deal, it has been claimed.

The impact of leaving without a deal was discussed during a London Assembly EU exit working group meeting yesterday.

The Government has until March 29, 2019, to come to a decision.

Sonali Parekh, head of policy at the Federation of Small Businesses (FSB), said: “There will be a significant impact on those businesses that were exporting to the EU directly or indirectly.

“We are pushing for a deal to stop this ‘cliff-edge’ scenario.”

The FSB, which represents small businesses in the UK, says only eight per cent of small and medium businesses have prepared for a no-deal Brexit – compared to 14 per cent nationally.

A survey by the FSB also found if the UK leaves the EU without a deal, one in ten small businesses would stop exporting to the EU altogether.

Ms Parekh said she is “encouraging” small businesses to start thinking about having a contingency plan in case the UK leaves the EU without a deal.

She added: “Even businesses that thought they would not be affected by Brexit are realising they are; even if they are not trading with the EU they are realising there are areas of their business that will be affected.”

If the UK leaves the EU without a deal it means companies in the UK might not be entitled to import and export goods and services to mainland Europe free of charge or face tariffs to move these goods.

Green party assembly member Caroline Russell was keen to know when small businesses need to start acting like there will not be Brexit deal and prepare for that scenario.

Ms Parekh replied: “I think that point is coming very shortly, and some small businesses have already started.”

Other concerns about a no-deal Brexit on businesses which were raised in the meeting included fears about drastic rises in the price of food in the UK.

William Bain, a European and International policy advisor at the British Retail Consortium, highlighted that if there was a no-deal Brexit the price of beef could increase between 15 and 29 per cent and tomatoes by between nine 18 per cent.

Mr Bain also highlighted that leaving the EU without a deal could reduce the number of food and drink items that came to the country from the EU through UK ports.

A total of 30 per cent of food in the UK comes from the EU.