• Sat. May 25th, 2024

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Fall in trade will hit UK SMEs forced to shun EU exporting, warns NE tax expert

A fall in trade between the UK and EU shows UK SMEs are shunning EU exports, a leading tax expert is warning.

Latest data from the Office for National Statistics (ONS) shows a second consecutive monthly fall in trade, with the effects of Brexit and the global pandemic resulting in the total exports of goods, excluding precious metals, falling by £1.3 billion (4.6%) in August 2021. This was in part due to a £0.6 billion (4.3%) fall in exports to the EU.

Total exports of goods, excluding precious metals, in the three months to August 2021 decreased by £1.2 billion (1.5%).

Stephen Harris, Associate Tax Director at Azets in the North East, the UK’s largest regional accountancy firm and business advisor to SMEs, believes the fall in trade between the UK and EU is a result of a failure to support EU exporters.

He said: “Small UK businesses have been completely overwhelmed by bureaucracy and the additional time and cost it takes to trade across Europe. New duties, border delays and transport costs are pushing UK SMEs into rethinking trade with the EU.

The UK’s focus has been on facilitating and streamlining the importation process and easing the associated documentary demands. It has not focused on assisting exporters.

“The temporary customs easements implemented by the UK since Brexit, such as deferred declarations, extensions to the UKCA safety marking of products, product labelling and the numerous health certification requirements, are not reciprocated by the EU. This means UK exporters to the EU have been faced with extra documentary and tariff burdens from day one.”

Stephen is urging businesses in the region to prepare for new border processes when the extensions and deferral period ends.

He added: “North East businesses importing products from the EU should be ready to comply with the UK’s new border processes. Businesses should make sure they maintain good communication with suppliers and ensure that all relevant paperwork is provided in a timely manner to avoid delays at the frontiers.

“VAT registered businesses should consider using postponed VAT accounting to avoid having to pay Import VAT at the frontier and become aware of all the special duty reliefs that can defer or exempt them from customs duty. These measures will help cash flow and ease the bureaucratic burden.”