In the report, Bridging the Brexit Gap: Options for transition, the IoD has suggested several paths the government could follow if it is to succeed in executing a painless extraction from the European Union.
Possible routes that could be taken include extending the Article 50 deadline, even if this solution would involve some very delicate political tap-dancing on the part of both EU and UK politicians.
The IoD believes it may be possible to keep the UK within the European Economic Area, with membership allowing the UK a degree of autonomy when it comes to implementing EU rules.
However, time constraints imposed by Article 50 could hamper the effectiveness of negotiations.
The March 2019 cut-off point could also prove the Achilles heel in a further plan, which is to delay the date when UK law would replace EU law.
This proposal would be designed to ensure both parties have more time to iron out any legal difficulties and ensure the two legal frameworks can operate alongside one another efficiently.
This proposal would probably meet resistance from those who fear it would weaken the UK’s position.
The introduction of a transitional customs agreement could also be brought into play.
This would need to operate alongside other options, and include proposals to deliver the same benefits as the country currently has by being within the EU Customs Union.
These would include keeping Common External Tariff alignment and operating in accordance with EU customs and VAT legislation, both of which the UK would be excluded from after exiting the EU.
Allie Renison, head of EU and trade policy at the Institute of Directors, said:
“Businesses will be pleased that ministers increasingly acknowledge the importance of a transition period in the Brexit process to minimise economic disruption.
"There is now a window of opportunity for the government to flesh this out as a policy objective in order to reassure companies that a smooth and orderly Brexit is on the cards.
"Prioritising interim arrangements and thereby mitigating the risks of EU exit means the eventual opportunities aren’t diminished by short-term chaotic cliff edges.
"The IoD has put forward this range of options for transition in the hopes that it sparks a proper debate on the practicalities of how best to Brexit. We look forward to engaging with both the government and the EU on these proposals.”