EU exports halt as UK firms encounter extra charges

Due to the new trade rules that came into effect on 1 January 2021, many UK businesses, who export to the EU, have been hit by extra charges, taxes and paperwork. Some have stopped exports to the EU as a result.

One business forced to stop its exports altogether is an English cheese company. When sending their £25-£30 gift sets to their EU customers, the company reported that the cheese now needs a veterinary-approved health certificate, which costs £180.

Under the post-Brexit trade deal, vets need to approve consignments of fresh food exported to the EU.

In 2020, the company sold £180,000 worth of cheese to the EU.

Exporters of fresh meat and fish have also encountered this costly restriction, which is one of the reasons why the UK Government announced their £23 million support fund for struggling fishing firms, on 20 January 2021.

However, the UK food industry is not the only sector that has taken a hit with EU shipping.

Fashion retailers highlighted issues of unsustainable charges when customers in the bloc return products ordered online. These costs are due to new customs clearance charges incurred by shipping firms.

There are reports that some retailers have had to burn their products that are stuck at borders, as it is cheaper than returning them to their place of origin.

EU businesses that export to the UK currently have a grace period over the command of some of the new trading rules. However, it will not be long until they face the same issues.

To keep exporting to European businesses without the added costs, firms may consider setting up an EU presence. But the Department for International Trade states that it is not Government policy to advise UK firms to set up EU centres and that it was “ensuring all officials are properly conveying” the right information.

The new trading rules and export costs can be complex to understand and you may wonder how to factor them in your operations. For guidance or help, please contact our experts today.

Posted in Blog, Brexit, Business tax, Retail, VAT.