The European Union (EU) on Monday told small businesses to prepare for more bureaucracy and costs should Britain crash out of the bloc without a deal, the latest step in its contingency plans reflecting the potential impact of a hard Brexit, the Reuters reported.

Economy Commissioner Pierre Moscovici said that checks on goods moving between the EU and the UK would be introduced immediately should that scenario come true.

"This is key to protecting our consumers and our internal market. A lot depends on the ability of businesses trading with the UK to get up to speed with the customs rules that will apply on day one in case of no deal," he stated.

According to the bloc's executive European Commission, the companies dealing with Britain must prepare for customs formalities and duties and take into account the need for import/export licences and more restrictive VAT arrangements if World Trade Organisation's (WTO) rules come into effect.