A tsunami of red tape coming into force on New Year’s Day is threatening 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 1st 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”.
1st January 2022
From 1st January 2022, UK companies must make customs declarations for goods imported from the EU, 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.”
Pass on extra costs
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.”
Still a ‘lose, lose’ situation
Meanwhile, Michel Barnier said Brexit remains a “lose, lose” situation for both the UK and the European Union a year on from the trade agreement he helped negotiate.
Mr Barnier led the EU side in the talks which resulted in the Trade and Co-operation Agreement (TCA).
The Christmas Eve 2020 deal put in place the arrangements for continued trade with the UK outside the single market and customs union.
Mr Barnier said: “One year later, Brexit remains a lose-lose decision.
“Yet I remember a great negotiating team and our daily work for the unity of the 27.
“The European project deserves to be defended and reformed with the same unity and the same energy.”