An alarming number of UK businesses reliant on imports from the EU to operate are falling behind in their Brexit planning and would not be ready for a hard exit from the European Union, with a leaked Cabinet note warning it would take ‘at least four to five months’ to improve the readiness of British firms trading with the EU.
Research by Newsnight has found that just 10% of UK firms importing from the European Union have prepared for a hard exit and aren’t taking advantage of new government schemes to support trade with the EU.
The data hinges around the new Transitional Simplified Procedures scheme, launched by HMRC in February, which is designed to make it easier for businesses to import in the event of an abrupt exit from the single market and customs union.
The new scheme (TSP) would allow UK firms to import goods from Europe without the need to complete new customs declarations, whilst also affording a 12-month import duty payment delay.
According to Newsnight, just 10% of businesses for which the scheme would be applicable have signed-up, meaning nine in 10 UK firms that import from the EU would not be best positioned in the event of no-deal and would likely experience heftier delays.
Spokespeople from the British Chambers of Commerce commented on the figures that: “If it really is this low we’re far, far away from being day one no-deal Brexit ready – it’s a very low number.
“The TSP data is terrible. The top-level lesson is that most small firms are not even close to being ready for a No Deal scenario.”
In total, around 240,000 UK businesses would be affected and are eligible for the TSP scheme, but just 17,800 have so far applied.
In order to get TSP status, a company must first register for an Economic Operator and Registration Identification number from the HMRC.
HMRC commented on Newsnight’s findings that: “Many businesses have already registered with HMRC as international traders – accounting for around two-thirds of the trade carried out by UK VAT registered businesses that only trade with the EU.
“HMRC’s plans include actions and easements to ensure that as many traders as possible are ready on day one to keep trading.”
If your organisation is unsure what crucial preparations and procedures should be put in place to ensure readiness for a hard exit from the European Union, talk to us today about a Brexit audit for your business.