Full post-Brexit customs controls coming into force on New Year’s Day are likely to cause “significant disruption” and could see some British businesses collapse, trade and logistics chiefs have warned.
The government has been told that lorries could be delayed or refused entry to ports because many UK firms are unprepared for the extra red tape and costs required to import goods from the EU from 1 January.
Small business owners told The Independent they are still struggling to understand the new customs declarations, rules-of-origin checks and relevant tariffs – with one calling the guidance issued by the government “mumbo jumbo”.
UK companies must make customs declarations for goods imported from the EU from 1 January 2022, following the introduction of export declarations at the beginning of 2021.
But it’s not the only major change due to take place at the end of the grace period – British importers and exporters will have to provide extra paperwork required for food, drink and products of animal origin to avoid tariffs and get a reduced rate of customs duty.
The Federation of Small Businesses said some small traders don’t have the time or money to adjust to the new red tape, and warned that only one in four small British importers are prepared for the changes.
“We have seen some small businesses fold because of the changes which have come in already after Brexit,” said James Sibley, head of international affairs at the group. “It’s possible some small businesses won’t be able to deal with the new changes and will have to wind up.”
David Thomas, co-founder of organic gin company Jin Talog, is worried about the extra paperwork needed to import juniper berries and alcohol from the EU. He fears he may have to pay higher duties on alcohol, as well as extra fees to a customs agent.
“It’s so frustrating. We can’t pass on extra costs to our customers, because we’ve already lost orders in the EU from all the changes that came in earlier this year,” said Mr Thomas.
“The government told us Brexit was done – but it’s barely even started. I know a lot of small businesses struggling to survive with all the red tape since Brexit.”
Maurice Greig, co-owner of fashion business The Greig & Greig Partnership, is still unsure whether he needs to fill out new rules-of-origin forms for the leather products – made in the UK – that he exports to the EU.
“The advice on the government website is mumbo jumbo – it’s just not clear,” he said. “I’ve made enquiries and attended seminars about whether I need new certificates of origin, and nobody seems to know. The answer seems to be, ‘You might, you might not.’”
Mr Greig said he fears losing customers in Europe because of the extra paperwork and potential hold-ups. “I’ve spoken to other businesses and they’re worried about losing customers too. It’s a disaster. It’s bound to cause chaos next year.”
The Road Haulage Association (RHA) predicts the knock-on impact of the changes will cause disruption at ports similar to that in January 2021.
“These changes have the potential to cause significant disruption,” said Rod McKenzie, the RHA’s director of policy. “If their forms are not correct, you will see lorries fail customs checks and not be allowed to board ferries.”
He added: “I’m sure trucks will be pulled up. I’m sure loads will be turned back. We could see queues away from the border while paperwork is checked. It’s difficult to know the extent of disruption. There will be some friction that will take some time to work through.”
Robert Keen, director general of the British International Freight Association (BIFA), said he was “alarmed” that so many small importers appeared to be unprepared for the changes coming next month. The logistics chief urged UK firms to “appoint a specialist to deal with import and export declarations”.
The FSB said many small traders are unaware of the complexity of the evidence required for rules-of-origin forms, but cannot afford to pay a customs agent or freight forwarder to help sort out the red tape.
“If you’re not set up properly you could find your shipment confiscated, or severely delayed, which then affects your reputation with customers,” said Mr Sibley. “Some small traders may find they can’t afford the admin costs, so they can no longer import. For some it could mean their business model just doesn’t work anymore.”
MPs and peers on the cross-party UK Trade and Business Commission have called on the government to relaunch the financial support fund for small and medium-sized enterprises (SMEs) hit by post-Brexit red tape – a scheme which closed in June.
Labour told The Independent that the government had “not given businesses the support they need to prepare” for the changes coming on 1 January.
“Ministers need to get a grip of this situation, and provide the support and guidance required to complete the new paperwork, even at this late stage,” said Nick Thomas-Symonds, shadow minister for international trade. “Otherwise, once again, people will be paying the price of Conservative incompetence.”
A government spokesperson said: “Overall trader readiness for the introduction of import controls is strong. The government is also on track to deliver new systems, infrastructure and resourcing needed for these controls.
“We have been running a targeted campaign across print, radio and online to signpost businesses to the relevant information – and officials across government are leading a series of sector-based webinars to help traders and hauliers get ready.”