The Department for International Trade has this month launched two new digital tools to support businesses exporting goods in and out of the UK.
The tools, available on the gov.uk website, explain product and country-specific details regarding tariffs and regulations. Pooling this information into one online location is designed to make it easier for businesses to trade, as well as saving them time in the process.
Trade with the UK
The first tool, Trade with the UK, provides information on tariffs, taxes and rules and is always up to date. It also details any duty relief schemes, if import licenses are needed and details UK commodity codes.
Use it now here – https://www.gov.uk/get-rules-tariffs-trade-with-uk
Check How to Export Goods
The second online tool, Check How to Export Goods, provides exporting firms in the UK into international markets with information around duties and customs procedures for more than 160 territories.
It also sets out what exporting documents you’ll need as well as pooling related information from other government departments including HMRC and the Department for Environment, Food and Rural Affairs where they relate to the exporting of products overseas.
See that here – https://www.gov.uk/check-duties-customs-exporting
The new tools will be welcomed by exporting businesses as the UK enters the transition period with the European Union, helping to pool required information surrounding exports in one handy online place.
Read more: SMEs have bigger worries than Brexit
Whilst for large and enterprise organisations, Brexit has dominated the list of top headaches for over three years, for small businesses, other challenges are deemed far more pressing.
That’s according to a new report from Clearwater International, titled Growth Europe, which surveyed some 2,100 small and medium-sized businesses across Western Europe.
Of those firms questioned, from the UK, Ireland, France, Germany, Italy, Spain, Portugal and Denmark, Brexit only ranked as the fifth biggest challenge that their company currently faced, behind maintaining market position and recruiting skilled staff.
The top 10 challenges included:
- Recruiting skilled staff (33.3%)
- Maintaining market position (31.7%)
- Finding new customers (28.3%)
- Access to foreign markets (24.4%)
- Brexit (23.9%)
- Political uncertainty (22.9%)
- Dealing with regulation (19.9%)
- Late payments (15.4%)
- Getting external investment (15.3%)
- Access to finance (14.5%)
Whilst the data in relation to concern over Brexit was somewhat skewed by the EU-wide SME survey, analysis of the 500 UK firms who took part in the study still only ranked the imminent departure from the EU as their third biggest challenge, with 45% saying they were still exploring markets within Europe and nearly 50% saying they are looking to expand further afield.
Meanwhile, in the Republic of Ireland, 62% of small firms report that they expect a positive impact as a result of Brexit.
Nearly all of the countries who’s businesses took part said that recruiting was their primary challenge, followed by maintaining market share and finding customers.
In essence, for small businesses anyway, the same challenges exist now as always have done – despite the huge upheaval that Brexit and recent political wranglings may have suggested.
Clearwater International’s David Weavers commented on the report’s findings that: “A lot has been said about the supposed sluggish performance of European companies in comparison to their rivals in the US and China. But the results of our study show that there is a lot to be optimistic about in both the UK and continental Europe.
Read more: UK SMEs confident of achieving 2020 aims despite Brexit uncertainty
“The biggest challenges facing SMEs at the moment, such as difficulties in meeting expansionary recruitment targets, relate to things which may constrain growth but aren’t necessarily suggestive of excessive downward pressures.
“As such, the data seems to indicate that companies are looking to the future from a position of relative strength and a desire to maintain or enhance their current market position, rather than from a position of weakness.”
Two years ago, the United Nations warned that the planet had just 12 years to limit climate change catastrophe. Now, as 2020 gets into full swing, the latest UN report suggests little progress has been made. In fact, it’s getting worse.
A study by the Climate Accountability Institute highlighted the effect that some businesses are having on the climate, with the top 20 worst emitters, including Saudi Aramco, Chevron, Gazprom and BP causing a third of all carbon emissions.
But what can businesses who want to make a positive contribution to changing the direction of travel for the environment do? Organisations still want to (and should want to) strive for profitable growth and globalisation has created so many opportunities for businesses all over the world – especially in the UK where goods exports are at a record high.
But what can environmentally-aware businesses do to support a decline in greenhouse emissions whilst still remaining successful on the international stage?
How can an exports business become a green exporter?
Understand most environmentally-costly modes of transport
How are your products currently shipped around the world? Cargo ships are the most popular mode of distribution with around nine in 10 items shipped across the globe onboard giant vessels. But shipping produces more carbon emissions than most countries and pollutes the ocean with toxic fuel and other waste too. In fact, ships are responsible for more than 18% of some air pollutants.
But air freight is just as costly, with global business operations emitting almost 171 million tonnes of CO2 in 2018 – although alternative fuels, operational efficiency and airline carbon offset initiatives are starting to pave a way to a greener airline industry. But this will take time.
Some shorter deliveries could instead be replaced by road haulage, especially once electric lorries become more commonplace. Train freight (electric) would also be a viable alternative, although the costs and added travel time would need to be factored in.
Some shipping companies are greener than others, and the US Environmental Protection Agency’s SmartWay Program can suggest transport companies with the best emission performance.
And the way that product is shipped can also be reviewed. Is the packaging recycled or can easily be re-used? Can your fulfilment and delivery suppliers implement an initiative where packaging is reclaimed once the items are delivered to the customer to be used once more?
Adopt a local fulfilment model
There are a number of distribution, shipping and fulfilment models enrolled by businesses. Some, like just-in-time, are fantastic for cost-saving and space-saving too, but require the frequent shipment of specific parts all over the world.
An alternative which could work for some companies is to create fulfilment hubs in parts of the world where they’re most active. So, for example, instead of shipping 10 products from the UK to Germany every week, ship 40 in one go and hold the stock.
Sure, this is an over-simplified view and the planes or cargo ships carrying your original 10 products will still sail without them with other goods on board, but a shift in thinking across an entire market segment can begin to pay dividends over time.
Change the way business is done
It has never been easier to conduct international business – without having to leave the office or even the kitchen table. Free business chat tools such as Skype and conference call systems can start to replace some of the meetings which really could have been an email, saving on travel emissions as well as time and costs.
Of course, some meetings have to happen face to face to form initial relationships, visit sites or inspect procedures. But with 60% of aviation emissions arising from international flights, there’s a good chance a video conference would work almost as well as an in-person one for a large chunk of business meetings and interactions.
Make carbon savings at home
Global organisations can have numerous bases and hubs, from head offices to satellite work stations and fulfilment centres – not to mention manufacturing plants. All of these areas can enact localised initiatives to make a positive contribution towards tackling climate damage.
Read more: UK exports outside the EU growing five times faster
These could range from going paper-free in offices to switching energy suppliers to one which guarantees a certain percentage of supplied power is from a green source, such as solar, tidal or wind.
Offset carbon contributions
After installing a number of green initiatives, it’s still highly unlikely that an active and successful exports business is going to reach carbon neutral. So, instead, businesses can look to offset the remaining contribution to global warming but offsetting carbon contributions.
Some airlines have already started to do this, as well as smaller retailers, by making promises to plant trees for every sale or flight – trees which act as natural CO2 sponges. Other approaches could be to support charities which invest in saving natural habitats which have been damaged by an increase in global temperatures, such as coral reefs and forests.
Data from the Office for National Statistics have shown how UK firms have been capitalising on opportunities outside of the European Union over the last 18 months.
The figures show that in the year to September 2019, EU exports grew by 1.3% to just under £300 billion. Non-EU exports, however, grew 6.3% to £373.7 billion – including 60% of service-sector exports such as finance, travel and transport.
The ONS data also showed a further quarterly increase in exports, reaching a record high in Q3 last year. The trade deficit of goods also fell to £29.2 billion from £34.7 billion between Q2 and Q3 with increased exports helping shrink the gap.
Liz Truss, Internationa Trade Secretary, commented on the figures that: “These figures show how big the opportunities are for British businesses exporting across the world, and the strength of the trade relationship with the USA and Japan.
“This government will continue to back our business communities to ensure they have the tools to seize this opportunity and take full advantage of all its benefits.
“My priority is to strike new trade deals with key partners and to open up new markets to British products as we go forward and leave the European Union.”
Read more: UK business confidence on the rise
The increase in worldwide trade for UK firms, or that outside of the EU bloc, is a positive movement for businesses as Brexit looms in just over two weeks.
It indicates that companies have for the last 18 months been broadening their horizons, either as a strategic ploy to dampen any impact of whatever EU market access agreement is rolled-out – or indeed facilitating organic orders fuelled by increased global demand for British goods and services.
Is your business looking to increase demand and sales on the global stage? Find out how Go Exporting can help introduce your businesses to new worldwide markets through our international trade consultancy services.
The confidence levels of UK businesses are slowly starting to rise after three years of political uncertainty – though investment caution remains.
The resounding majority delivered to Boris Johnson in the general election caused a sharp increase in directors’ confidence in both their own firms and the economy at large.
The Institue of Directors reported that confidence in the economy for December 2020 grew from negative 18% in November to positive 21%, whilst organisational confidence rose by over 20 percentage points to 46%.
Much of the new-found confidence is derived by the election promise from Johnson to take the UK out of the European Union by the end of January, bringing an end of over three years of uncertainty for businesses of all sizes – as well as costly preparations and planning.
The service sector, in particular, saw an increase in activity at the end of 2019 with the IHS Markit/CIPS UK purchasing managers’ index for services rising 0.7 points to 50, indicating activity increases for the majority of companies.
Read more: UK SMEs confident of achieving 2020 aims despite Brexit uncertainty
Economics associate director at IHS Markit, Tim Moore, commented to the Financial Times that: “The modest rebound in new work provides another signal that business conditions should begin to improve in the coming months, helped by a boost to business sentiment from greater Brexit clarity and a more predictable political landscape.”
With the UK’s departure from the EU just three weeks away, it’s now or never for businesses to ensure they’re prepared. If your company is yet to make concrete strategic plans to manage any disruption, including additional shipping paperwork or regulation changes, find out more about Go Exporting’s Brexit consultancy here.
There have been numerous ways in which businesses have looked to prepare for Brexit. For some, setting up operational hubs on the continent has proved popular. Others have switched head office locations, whilst some are still resolute in their lethargy to make any operational or structural changes at all.
But for some UK companies, a digital approach to avoiding the potential steepest of pitfalls has proved most popular – claiming an e-residency in Estonia.
The Estonian government created e-Residency over fifteen years ago as a means for residents to communicate with the government, alongside 99% of other governmental services. And five years ago, this programme was opened up to foreigners who were already attached to Estonia to some degree – including companies who which to have a digital identity as being an EU firm.
Managing director of the e-Residency programme, Ott Vatter, whilst speaking to readyforbrexit.co.uk, noted an increase in applications from UK businesses since the Brexit referendum result.
Vatter said that: “We have seen a significant increase in applications for e-Residency since Brexit. e-Residency is useful for Brits because it means that they can still have a company within the EU and still remain in the EU’s legal framework without actually physically leaving the UK space.
“It is a virtual gateway to the EU, without being in the EU.”
For €100 you can register for e-Residency, and it costs €190 to establish a company alongside additional bookkeeping services if required. Yet whilst personal applications don’t result in becoming a physical resident or requiring to pay tax to Estonian authorities, businesses set-up using the programme it becomes a tax resident, yet tax will likely still need to be paid to UK authorities in this example if that’s where the customer base and main premises reside.
Vatter explained that: “Before e-Residency, you could create a company in the EU by travelling to Germany or Estonia or France, for example, and pay quite an expensive fee to a lawyer and create an EU company.
“So its conception, e-Residency is not anything new. What’s different is the fact that you can do it from the comfort of your home using your computer from anywhere in the world and when you become an e-Resident there are no obligations. It doesn’t mean that you become a tax resident or a resident of Estonia. There are no strings attached when you apply for e-Residency. It’s a personal status.
“Now, when you create a company using e-Residency then that company is automatically a tax resident of Estonia, but if your main customers are still in the UK and your permanent establishment is in the UK then you will probably have to pay your corporate tax in the UK.
“The general rule is where you create your value, there you pay your tax. It gets a bit more complicated with cross-border services and service-based industries. And, if you are travelling around a lot as a freelancer and you don’t have one permanent establishment, then we see that the benefit for them might be to pay your taxes to Estonia because you don’t have one permanent establishment.”
It takes around two months to apply to become an e-resident, whilst company registration takes around 30 minutes.
Read more: UK SMEs confident of achieving 2020 aims despite Brexit uncertainty
But critically for UK firms, once the EU company has been established via e-Residency, that business has the right to offer goods and services across the EU and in accordance with the EU’s legal framework – even if that company is actually based in the UK and EVEN after a potential no-deal Brexit.
So far, 3,200 UK residents have signed up for the programme – including 450 companies.
A new study has found that globalism is strong and well in the world of international business, despite a turbulent period of trade conflict and political separation.
The Global Connectedness Index (GCI), published by DHL, found that international flows were smoother than feared, with the annual barometer of global goods, capital, information and people flow showing only a slight overall dip for 2018.
However, international investment has taken a hit, in part because of US tax policy changes aiming to repatriate earnings held overseas.
Chief executive of DHL Express, John Pearson, commented that: “While current geopolitical tensions could seriously disrupt global connectedness, this 2019 update finds that most international flows have remained surprisingly resilient so far.
“Ultimately, what we’re seeing today is the evolution of globalisation, not its decline. Decision-makers need to be careful to not overreact to strong rhetoric or headlines.”
And on claims that trade was shifting away from globalisation towards regionalism, Steven Altman of the NYU Stern School of Business said that: “Our analysis does not confirm a robust regionalisation trend. Instead, we see that the average distance across which countries trade has held steady since 2012.”
Read more: US imports from China drop 13% in 2019 as trade war continues
“While fraying relations between major economies could lead to a fracturing along regional lines, such a shift has not yet conclusively taken place.”
The GCI report suggests that the outlook for 2020 remains stable with just a slight decline in trade intensity forecast.
The vast majority of small business owners say they’re confident of achieving their company goals in 2020 according to a new study.
The research, carried out by Vistaprint, quizzed 500 SME bosses on their primary goals for next year and their optimism for being able to achieve them.
And despite the ongoing Brexit uncertainty, the General Election and rising costs, 86% of respondents said they were confident of achieving their 2020 business goals.
The study found that UK business owners are more likely than not to feel ‘confident’, ‘prepared’ and ‘optimistic’ about the future, with just one in five saying they felt apprehensive.
Of the primary goals for SMEs in 2020, the most popular were:
- Substantially increasing revenue and growth
- Reaching a new customer base
- Surviving the year
- Generating return customers
- Breaking even
- Introducing new products/services
- Increasing social media presence
- Building or updating website
- Expanding marketing/advertising efforts
- Selling the business
However, despite the optimism, a quarter of firms expect a struggle in the year ahead, with half saying they’re concerned on how political changes will affect their business and 38% saying they may struggle due to bills and expenses rising.
Customer strategy and insights director at Vistaprint, Simon Baier, commented on the findings that: “While political changes and economic barriers are very real challenges facing Britain’s small businesses, our research shows that these factors haven’t dampened the UK’s entrepreneurial spirit.”
Read more: Exporting SMEs grow twice as fast as non-exporters
“It’s encouraging to see small business owners’ confidence and optimism going into 2020.
“The better they do, the more chance they have of generating jobs for local people, giving an economic boost to their community and continuing to provide significant value to customers.”
Perhaps the most pleasing statistic of the study, however, is that 90% of SME owners said they were pleased they took the initiative to start their own firm.
New research has uncovered small and medium-sized businesses trading internationally have grown at almost twice the rate as small firms selling within local markets.
The study, carried out by the government’s export credit agency, UK Export Finance, found that firms trading domestically experienced an 8.4% growth rate over the last five years, compared to 15.2% for those exporting internationally.
The survey, which quizzed 1,000 UK SME’s, also uncovered that almost half of those exporting businesses said trading internationally increased profits by up to 20%, whilst for 9% of firms, exporting increased profits by over the 20% mark.
Despite the opportunity to expand into new, less saturated markets, as well as improving bottom-line results, 19% of SMEs say they believe they’re ready to export but choose not to do so, citing challenges over managing export procedures, paperwork and also finance issues due to delayed payments.
Secretary of State for International Trade, Liz Truss, commented that: “Finance is a key barrier coming between SMEs and their export potential. If small businesses were to export more, Britain would see even more stronger economic growth.
“In its centenary year, UKEF continues to enable companies from across the UK to expand their global reach by helping them succeed abroad. That’s why it is at the heart of my plan to get businesses ready to trade as we leave the EU.”
Despite this, the opportunities for SME exporters are evident, with research finding that businesses with fewer than 50 employees have seen the fastest revenue growth through exports, and higher average growth annually (10.9%) compared to non-exporting firms (7.4%).
Opening a world of opportunities
Despite strong global trade headwinds, ongoing trade wars between the US and China and the little matter of Brexit, exporting has been a success story for British businesses over the last four years. In the 12 months to May 2019, overall exports grew by 4% to surpass £647 billion – the highest levels on record – whilst the number of exporting manufacturers also grew to their highest levels in over a decade.
Read more: Global pressures having little impact on UK export growth as trade reaches new record high
If your business is considering broadening its horizons and looking to expand into the international marketplace, conducting thorough market research and analysis, devising an entry strategy and understanding how to mitigate the challenges that international trade can arise are critical to ensure early-years success.
Find out how Go Exporting’s international trade services can help your company make a success of exporting and open a world of opportunities here.
The ongoing trade war between the USA and China has seen imports into the US from China drop by 13% so far in 2019.
Tariffs were the primary cause of the decline on imports from China, with Vietnam proving to be the biggest benefactor with exports to the States increasing nearly 35%, primarily in the sales of computers, telephone equipment and other machinery.
Despite proving to be the biggest benefactor of the US / China trade war, Vietnam is actually struggling to cope with the demand and number of inquiries due to a lack of skilled labour.
Associate director at IHS Markit who released the trade report, Michael Ryan, commented that demand is ‘currently outpacing the current ability to supply’.
Latest news from within US and Chinese trade teams are that a path to an agreement could be within reach, with China’s top negotiator saying on Tuesday that they had higher hopes of a trade deal and that ‘consensus on how to resolve related issues’ had been found.
Read more: Boost in non-EU trade for UK firms
A key sticking point had been demands surrounding intellectual property theft – estimated to cost businesses in the US $600 billion every year.