A major report from the British Chambers of Commerce has found that 49% of UK exporters are facing difficulties adapting to new Brexit regulations around the trading of goods.
The survey of 1,000 firms, the majority of which were SMEs, found that firms are struggling with the changes following the ratification of the UK_EU Trade and Cooperation Agreement.
Key results from the survey included 30% of respondents reporting difficulties adapting to changes in moving or trading goods in the first month of the year. Only 10% said they’d found adapting easy, with another 16% saying it was too early to say (the survey was conducted between 18th and 31st January).
In total, 49% of businesses and 51% of manufacturers reported struggles with increased admin, costs, delays and confusion over the rules and which to follow proving the most common difficulties.
Adam Marshall, BCC director-general, said of the survey results that: “Trading businesses – and the UK’s chances at a strong economic recovery – are being hit hard by changes at the border.
“The late agreement of a UK-EU trade deal left businesses in the dark on the detail right until the last minute, so it’s unsurprising to see that so many businesses are now experiencing practical difficulties on the ground as the new arrangements go live.
“For some firms, these concerns are existential, and go well beyond mere ‘teething problems’. It should not be the case that companies simply have to give up on selling their goods and services into the EU. Ministers must do everything they can to fix the problems that are within the UK’s own control, and increase their outreach to EU counterparts to solve the knotty issues that are stifling trade in both directions.
Read more: Free webinar on exporting goods & services to the EU at Emerging Tech Fest
“This situation could get worse if the UK sticks to its guns and introduces additional SPS checks in April and full customs checks on imports in July. These timescales need to change – and the support available for businesses who are battling to adapt to new trading conditions significantly increased.”
SMEs grants for expert support
To help small firms adapt to the new trading relationship with the EU, many are now eligible for grants of up to £2,000 to help cover the cost of training and professional advice as part of the £20 million SME Brexit Support Fund.
If your business is still working to adapt and change to the new trading relationship with the EU, we can help. Our Brexit FastTrack service can deliver a detailed review of your business post-Brexit to resolve the issues you are encountering.
Small and medium-sized businesses in the UK can now apply for grants of up to £2,000 to help cover the cost of training and professional advice in relation to Brexit.
The new £20 million SME Brexit Support Fund, announced by Michael Gove last week, will help SMEs adjust to new customs, rules of origin and VAT rules when trading with the EU.
The grants, worth up to £2,000 per trader, are relevant to EU-only exporters who won’t be up to speed with the customs regulations associated with global trade.
National Chair at the Federation of Small Business, Mike Cherry, said of the new grant that: “Today’s announcement is very significant. Small businesses, often with few cash reserves, are for the first time facing complex new customs processes, VAT requirements and rules of origin.
“While many have come to FSB for help, we have been asking for proper financial assistance of this scale, so that a cash-strapped small business can afford to buy-in expertise, training and practical support.
Read more: Survey shows majority of UK SMEs aren’t expecting EU trade slowdown following Brexit
“The new fund will make a significant difference, and we are pleased that Ministers have really engaged with us on this, and come up with an excellent response.”
If your business is still working to adapt and change to the new trading relationship with the EU, we can help. Our Brexit FastTrack service can deliver a detailed review of your business post-Brexit to resolve the issues you are encountering.
This month we joined a fantastic line-up of speakers for Emerging Tech Fest 2021.
In this webinar, Go Exporting CEO Mike Wilson spome with Tony Hicks about exporting goods and services to the EU in the wake of Brexit. Key themes included what’s changed since 1st January, the trade agreement itself and its’ implications, how to identify challenges to your business and how to address the challenges whilst maintaining exports.
Watch the webinar in full below.
If you need support with your post-Brexit export strategy, we can help.
First, download this free Brexit Checklist to get you started.
For a professional service to assess your Brexit positioning, learn more about our Brexit consulting here.
The volume of exports heading into the EU from British ports has fallen almost 70% as the immediate realities of Brexit take hold.
The data, compiled by the Road Haulage Association, compared exports data via ferry and rail onto the continent in January this year compared to 2020. A letter from the association to Michael Gove stated that recent warnings before the end of the transition period, especially around the lack of customs officials, had been largely ignored, despite a new mountain of paperwork.
It said that the shortfall in exports was largely due to EU vehicles returning empty as UK companies had either temporarily or permanently halted exports to the EU.
RHA chief executive Richard Burnett said of Gove that: “Michael Gove is the master of extracting information from you and giving nothing back. He responds on WhatsApp and says he got the letter but no written response comes.
“Pretty much every time we have written over the last six months he has not responded in writing. He tends to get officials to start working on things. But the responses are a complete waste of time because they don’t listen to what the issues were that we raised in the first place.”
Whilst a combination of Brexit and the pandemic will have led to some reduction in exporting activity, trade experts fear that worse could be over the horizon.
Chief executive of the Cold Chain Federation, Shane Brennan, noted that: “As we look to April through to July what really worries me is we face a perfect storm.
“We will have an economy looking to come out of lockdown at the same time as the UK is imposing a range of import controls on EU business that may be no more prepared than UK businesses have been – and possibly less so – and a supply chain that is incredibly reluctant to service the UK. The full Brexit crisis that we were predicting could well come into effect at that point.”
Read more: Survey shows majority of UK SMEs aren’t expecting EU trade slowdown following Brexit
The news of the sudden drop in exports to the EU comes as hundreds of companies make moves to switch operations to countries inside the EU.
Reported by The Observer, data from the Netherlands Foreign Investment Agency reported that by January 1st this year, over 500 businesses with UK connection had already made inroads into setting up branches, depots or warehouses in the Netherlands alone. The majority cited ‘Brexit-related reasons’.
A new survey has shown the positive mindset of UK SMEs in the wake of Brexit, with the majority of small firms saying they don’t expect trade with the EU to shrink in the coming years.
Conducted by Politico, the survey found that 62% of small and medium business directs don’t expect their trade with the EU to slow down, though manufacturers say it’s too early to tell whether leaving the bloc will be good or bad for their prospects.
Whilst combined figures show a positive mindset, there are more SMEs who expect trade to shrink rather than grow. Thirty-eight per cent said they expected some fall in orders compared to 23% who expect growth.
This sentiment is mirrored by The Engineer’s poll of British firms, with 41% saying it’s too early to tell, 31% saying Brexit will cause a drop and 27% saying they’re optimistic for growth.
‘Brexit for real’ has already caused some major headaches for businesses on both side of the Channel. Freight rates have spiked whilst re-exported products are causing tariff and Rules of Origin headaches for retailers.
Added bureaucracy, new rules on business travel and ongoing uncertainty surrounding personal data and services are challenges that will likely continue long into the future as well.
Read more: 5 issues UK businesses face despite the UK/EU trade deal
If your business is still working to adapt and change to the new trading relationship with the EU, we can help. Our Brexit FastTrack service can deliver a detailed review of your business post-Brexit to resolve the issues you are encountering.
Last week, Go Exporting CEO Mike Wilson joined Sue Firth for a podcast on strategies for international expansion and exporting.
The podcast goes into depth on the reasons for exporting, how businesses can begin to explore international markets and the inevitable challenges that Brexit has presented.
Listen to the podcast below:
Sue Firth is a performance coach and business psychologist, international speaker and Associate Fellow of the British Psychology Society. See more great podcasts on business, marketing and strategies for success from Sue here.
The price of shipping freight across the Channel has surged following the end of the transition period as the realities of ‘Brexit for real’ kick in.
The price of moving truckloads from France into the UK rose almost 40% in the first week of January – according to a report by Transporeon.
Despite relatively quiet flows of commercial traffic at the start of the year, particularly following the stockpiling and Covid delays seen around Christmas, new Brexit-related paperwork and the events towards the end of 2020 have seen many shippers – who typically work on tight margins – increase costs.
And those heightened prices are likely to remain to help cover the added administrative costs, with Transporean CEO commenting that: “There is a likelihood that we will be seeing higher rates for lanes into and out of the UK into the EU as a result of Brexit.
“Carriers, which normally operate on very tight margins, are reacting to market dynamics.”
Read more: Re-exported products causing tariff and Rules of Origin issues for retailers
Chief executive of the Road Haulage Association, Richard Burnett, said that there appears to be a lack of customs brokers able to manage the paperwork for traders and hauliers.
Elsewhere, policy directory of Logistics UK, Elizabeth de Jong, noted that whilst the number of vehicles being refused passage was low, the next few weeks will be telling as to whether planning, understanding and systems currently in place are sufficient.
Growing into the future
At Go Exporting, we help business just like yours plan for the future, research new markets and helping you to plan and implement your export strategy for profitable growth.
Learn more about our international trade consultancy here.
The UK will continue to participate in and help fund five key EU research programmes, including the €95.5 billion Horizon Europe project.
Under the terms of the trade and co-operation agreement between the UK and EU, the UK will continue to play an active roll in the programmes which includes the Euratom nuclear research scheme, as well as the UE satellite and surveillance services.
The UK’s annual financial contribution to EU programmes is calculated on the country’s gross domestic product as a share of EU GDP – known as the ‘operational contribution’. There will also be an additional participation fee, calculator at 4% of the country’s operational sum.
The two further projects the UK will continue to contribute towards are the ITER project to build the world’s first functioning nuclear fusion system, and the earth monitoring project called Copernicus.
The UK has been a major benefactor of the various EU research programmes so far, securing €7 billion in funding between 2007 and 2013, as well as €5.9 billion in funding from Horizon 2020.
Read more: 5 issues UK businesses face despite the UK/EU trade deal
UK institutions had suffered as a result of the Brexit referendum in 2015 with EU-backed funding dropping by almost a third. However, the deal agreed on Christmas Eve ends uncertainty surrounding the UK’s eligibility for EU competitions.
Read more detail on the various frameworks here.
Retailers in the UK have warned the government that supply chains and trade flows are being affected by new post-transition customs and trade requirements.
M&S was one of the first retailers to take action by temporarily suspending sales of hundreds of items in Northern Ireland stores as it fears food would be blocked due to new rules. Many other firms have spoken out about delays fuelled by increased paperwork at ports too.
The trade agreement between the EU and UK was designed to preserve zero-tariff and zero-quota access, but retailers which use the UK as a distribution hub for EU business operations are facing the possibility of tariffs when re-exporting goods back into the European Union.
The most prominent example so far has been M&S’s popular Percy Pigs which is manufactured in Germany, shipped into the UK and then exported once more into Northern Ireland – something which chief executive Steve Rowe suggests should, under the new trade agreement, incur tax.
“Tariff-free does not feel like tariff-free when you read the fine print,” he told Reuters.
“For big businesses, there will be time-consuming workarounds but for a lot of others this means paying tariffs or rebasing into the EU.”
Read more: 5 issues UK businesses face despite the UK/EU trade deal
Elsewhere, John Lewis has said it will scrap overseas deliveries into the EU due to confusion surrounding post-Brexit trading rules. Debenhams, Fortnum & Masons and ASOS are just three further examples of UK retailers suspending deliveries onto the continent.
Growing into the future
At Go Exporting, we help business just like yours plan for the future, research new markets and helping you to plan and implement your export strategy for profitable growth.
Learn more about our international trade consultancy here.
After years of political wrangling and to-the-wire negotiations, Brexit for real has finally happened. For many in the general public, that’s it. Brexit is done. But for UK businesses returning to work from a well-earned festive break, the real work is yet to begin.
The end of the transition period and arrival into a new era of UK/EU relations arrived with little fanfare. No great rip appeared in the waters south of Dover and supermarket shelves haven’t emptied overnight.
Of course, the ongoing pandemic continues to take up much of the public and news bandwidth and, probably not until summer holidays come around and UK holidaymakers are no longer allowed to join the EU queue at airports – and when they return home to a roaming data bill – will many really notice the effects of Brexit.
But businesses reeling from pandemic mitigations now have very real, but also very actionable, challenges ahead.
Here’s a look at just some of the key issues for UK firms:
Added bureaucracy
Customs, origin, VAT, safety, livestock health… there’s a raft of extra red tape that exporters now have to deal with to continue trading relatively seamlessly with the EU.
The government itself has admitted that there could be ‘bumpy moments’ in the weeks ahead as both businesses and hauliers get used to new rules and requirements.
Business travel has a new set of rules
The good news for fans of international meetings is that short-term business visits to the EU can continue, up to a limit of 90 days in a six-month period.
However, the scope of what a business visit now covers without the need for a work permit has changed. Meetings, consultations, research, training and trade shows are all good, but selling goods or supplying services to the public are not.
The government advises that business travellers check what visas and permits may be required for specific trips into the EU.
What’s happening with data?
Much like with the introduction of GDPR, there is still some confusion and large grey areas around the use of handling of personal data between UK and EU businesses. The EU has yet to decide if the UK’s personal data protection rules are tough enough to allow continuous flow, something which if altered could leave British firms less competitive than their EU competitors.
A temporary arrangement to continue allowing data flow for the next six months has been agreed, but the lack of detail on financial services and the potential requirement for a legal data representative on the continent are just two big future potential stumbling blocks.
Firms may accidentally break the law
There may be a raft of UK firms that accidentally break the law or, in the very least, the new trade agreement rules over the coming weeks.
The IfG gave some examples where this could take place, noting that: “Some industries, especially food, will simply be unable to do this: cane sugar imported from the Caribbean and refined in the UK will not qualify for access to the EU tariff-free, nor will basmati rice imported from India and milled in the UK.
“Any meat product must contain only meat from animals born and raised in the UK or the EU.”
Businesses that aren’t aware of new requirements within the trade agreement may continue trading as normal but be in violation of the new agreement.
Whilst there will no doubt be a certain level of understanding and a grace period to cover issues like this, that won’t last forever.
Planning for the future
There’s no doubt that the agreement of a trade deal has brought some certainty for the future. Businesses now know that tariffs and taxes won’t be levied on their goods, and Rules of Origin is far less restrictive as it could have been.
But there are still gaps in the agreement, and we don’t know how fast or how expansive the new Global Britain will be.
The Department for International Trade has been sprinting to form new trade and continuity agreements with a host of countries, and there will no doubt be more to come.
The advice for UK businesses right now would be to get to grips with the new trade deal, make the required changes as soon as possible and then, once some stability has been restored, make preparations to be able to capitalise on new global opportunities as they arise.
Growing into the future
At Go Exporting, we help business just like yours plan for the future, research new markets and helping you to plan and implement your export strategy for profitable growth.
Learn more about our international trade consultancy here.
