With only one month to go until the first working day on which full import controls for EU goods will apply, the UK’s largest business group is flagging a lack of capacity among small businesses to handle new paperwork.
Currently, full customs declarations for EU goods can be deferred at the point of arrival. From this coming 1 January, however, paperwork will have to be handled up front, and notice of food, drink and products of animal origin imports given in advance.
Due to the Ireland/Northern Ireland Protocol, different rules apply to direct trade between Northern Ireland and the EU - with no customs formalities required.
With fewer than five weeks left to prepare for the changes, new Federation of Small Businesses (FSB) research shows that only one in four (25%) small importers who are impacted by the changes, and aware of them, are ready for them to take effect.
One in eight (16%) of the importers surveyed by the group say they are unable to prepare for the introduction of checks in the current climate, and a third (33%) say they were unaware of their introduction prior to the FSB study, but will be affected by them.
Latest figures from the ONS show total imports to the UK from the EU rose 2.2% to £57.7bn in Q3 2021. The UK’s total trade deficit widened to -£39.9 billion over the same period.
FSB National Chairman Mike Cherry said: “Given the turmoil of the past 18 months, new concerns about the spread of Covid, and this being the busiest time of year for many, it’s understandable that few firms are fully prepared for the introduction of import controls from January.
“What we’re saying to firms is: there’s still time to act. Speak to suppliers to ensure you have all you need to make declarations, consider alternative providers if that looks like an efficient way forward, and think about different transportation routes.
“Stockpiling will naturally be a temptation for those fortunate enough to have the funds for it, but there is already a squeeze on warehousing space – if everyone ramps up storage, that squeeze will only tighten.
“We’re urging the government to do all it can to raise awareness, with our support, through every channel available to it in a climate where a lot of small firms simply don’t have the cash or bandwidth to manage this new red tape.
“Too little support was made possible by the first iteration of the SME Brexit Support Fund due to narrow eligibility criteria and application timeframes. Policymakers should learn lessons from that process and launch a new fund, with the same aim of helping existing international businesses with growing admin, and inspiring new ones, but with a truly global focus.
“We’ve recently had the very welcome launch of the Export Support Service. What we need now, as these stark figures demonstrate, is an Import Support Service to empower firms with the guidance and information they require to successfully navigate global trade as it evolves.”