The Dutch economy will be hard hit if Britain leaves the EU without a trade agreement, according to research carried out on behalf of the Dutch cabinet.

A hard Brexit would cost Dutch firms between €387m and €627m in import and export costs and red tape, the research by accountants KPMG found. This does not include customs rights, value-added tax issues and sector specific entry demands

In particular, the meat processing industry faces an extra bill of up to €28m a year to ensure its products can still be sold in the UK. The cut flower industry will face new charges of €4.4m to €7.3m a year, the report said.

The researchers warn that firms are not taking the risk of a hard Brexit seriously enough and have not yet started looking at what needs to be done. Nor has the customs department begun preparing for the extra work.

Junior economic affairs minister Mona Keijzer said she is in talks with customs officials and various government inspectors to assess what should be done.

‘But companies have to do the most important work themselves,’ she said. ‘Entrepreneurs should prepare themselves in time.’