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Anger builds among manufacturers as EU customers cancel orders due to Brexit red tape

Ben Chapman
·4-min read
<p>Close to 30 per cent of small British firms have stopped shipping goods to the EU, according to  accountancy firm UHY Hacker Young</p> (REUTERS)

Close to 30 per cent of small British firms have stopped shipping goods to the EU, according to accountancy firm UHY Hacker Young

(REUTERS)

EU customers are cancelling orders from the UK because of a mass of red tape, UK manufacturers have said, as anger builds over a lack of government Brexit support and antiquated customs systems.

While problems have been most acute for perishable goods like meat and seafood, manufacturers are now also reporting cancelled orders and some haulage firms are refusing to move goods.

Close to 30 per cent of small British firms have stopped shipping goods to the EU amid widespread confusion about customs forms and extra costs, according to accountants UHY Hacker Young.

"Particular challenges are now very evident around just how hard it is to get anything out of and into the country," said Ben Fletcher, executive director of policy for manufacturers trade body Make UK.

"There are not enough customs agents to help businesses through this and there is not enough capacity in the freight forwarding system. The burden is particularly falling on SMEs to fight their way through."

One customs expert who had worked at HMRC for 30 years and now advises MakeUK even admitted the new requirements were "very complicated", Mr Fletcher said.

Compounding the problems is the fact that there is no helpline to resolve issues with the 30-year-old IT system required to log customs documents for imports and exports. Instead, businesses are referred to an HMRC email address which promises a response within five days.

Once a response is received, if the issue is not resolved firms must wait a further five days.

That is an "unrealistic timeframe if you are trying to make a quick decision", Mr Fletcher said. "There are real frustrations when trying to get hold of government helplines, and real uncertainty about how to use government forms," he said.

"There is a tangible anger among some members that I have not experienced before."

One business told The Independent they had been waiting for 10 days for a response from HMRC to their query while others said tiny errors on paperwork meant shipments were rejected or faced lengthy delays.

Up to half a million firms are estimated to have to file customs declarations for the first time following the end of the transtion period.

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Most have never previously had to use the CHIEF system, which was built in 1989, because they had free access to import and export from with the EU.

A replacement Customs Declaration Service which was hailed by the government as a way to streamline Brexit bureaucracy but two years after it was supposed to be ready it is still not fully operational.

Former Brexit secretary David Davies had said in 2017 that the technology would be ready by January 2019.

EU customs systems are also leaving UK firms with a huge burden of paperwork, particularly for products of animal origin which require additional safety certificates.

“We are dealing with a system that is so antiquated," said David Lindars of the British Meat Processors’ Association. "If there are any changes required [to paperwork] at the border they have to manually go through each of the pages and manually cross things out putting an old-fashioned 1950s-style ink stamp on every single crossing out.”

“If you miss something your consignment could be refused entry. In some cases, when it doesn’t work it’s catastrophic. ”

Michelle Dale, a senior manager at UHY Hacker Young said 30 of around 100 export clients had stopped sending goods to the EU.

“The number of SMEs who have no option but to halt exporting to the EU could continue to grow,” Ms Dale said.

“These extra costs and paperwork could be devastating for UK SMEs who rely on their EU customer base. EU customers will inevitably look elsewhere if it means they can avoid paying import costs and UK businesses could see part of their client base evaporate.”

HMRC, which is already under intense pressure from additional work due to Covid-19, did not say how many people were assigned to help businesses deal with customs issues.

A government spokesperson said: “Now the UK has left the EU customs union and Single Market, there are new rules and processes businesses will need to follow.

“We have encouraged companies new to dealing with customs declarations to appoint a specialist to deal with import and export declarations on their behalf - and we made more than £80 million available to expand the capacity of the customs agents market. Most businesses use a specialist such as a customs broker, freight forwarder or fast parcel operator to deal with this.

“The government will continue to work closely with businesses to ensure they are able to trade effectively under the new rules.”

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‘It’s madness’: UK manufacturer battles against Brexit bureaucracy