Unanswered questions remain for businesses as end of Brexit transition period nears

The body which represents Business West nationally, British Chambers of Commerce has today, (24 September) published an update on its Brexit guidance dashboard, outlining 26 key questions that remain unanswered for businesses as the end of the Brexit transition approaches. 

The document has been published alongside research which suggests business preparedness for the impending regulatory changes is low, with just 98 days to go until 1 January 2021. 

The report shows that of the 527 businesses surveyed, just 38% of companies have done a Brexit risk assessment this year, compared with 57% in 2019. 

More than half (51%) of firms surveyed have not taken any of the eight steps the UK government has recommended businesses consider in their preparations for exporting to the EU.  

Unanswered questions include firms being unaware of which rules of origin will apply after the transition, therefore preventing them from planning adequately. 

There is also a lack of clarity on how food and drink should be labelled from goods travelling from the UK to EU, and very limited guidance on the movement of goods from Great Britain to Northern Ireland.

Finally, there is no information on the UK Shared Prosperity Fund which the government proposed to, ‘level up’ the regions and nations, supporting vulnerable communities and providing funding and support to businesses and individuals looking to develop their skills.

British Chambers of Commerce, which represents 75,000 businesses in the UK, 30,000 of which trade internationally each year, has written to Cabinet Office Minister Michael Gove “seeking action for businesses and urgent discussions to help firms prepare.”

Responding to the results of the survey, James Monk, Director of Commercial services at Business West, said: 

“With just 98 days to go until the end of the transition period, it is clear there are significant questions that remain unanswered for businesses. 

“Any uncertainty surrounding the end of the transition period among the 21,000 businesses we support is something Business West is dedicated to alleviating. We are confident that both our Trading through Brexit Hub and our dedicated team of over 80 trade advisers and experts will help ease the transition. 

“But there needs to be sufficient guidance from the government where questions remain unanswered. While it is the case that aspects of the transition have not yet been agreed on, it is imperative that the government addresses these concerns urgently, providing clearer information while re-engaging businesses facing this period of change.”

What can businesses do to prepare?

Northern Ireland

In terms of exporting goods from the UK to Northern Ireland, there are ways in which businesses can prepare, regardless of the outcome of ongoing trade talks. 

Under the Northern Ireland protocol, Northern Ireland will continue to enforce the EU's customs rules and follow its rules on product standards (known as the single market on goods). This will result in administrative processes and checks for UK exports, including digital import requirements. This will be administered by UK authorities (HMRC and Border Force) and will be needed to ensure tariffs are not paid on trade within the UK. It will also ensure that goods travelling to Ireland and the EU (or at risk of doing so), will pay tariffs when required. 

The new Trader Support Service will help streamline this for traders and ensure no further costs are incurred. Businesses can register to sign up for more information here.

Businesses will also need to apply for an EORI number, if they do not already have one.  This is required for all businesses who need to manage customs operations with HMRC. Further information, including a link to apply for an EORI number, is available. 

It may be the case that if you are a VAT registered business with EU trade that you already have a number, but you can check here.

Rules of Origin 

These allow certain goods to be treated as being manufactured in a particular place, even if their components have been created, designed, or manufactured elsewhere. There is a lack of certainty currently for exporters over whether their products will benefit from any Free Trade Agreement through preferential tariffs. 

If the UK leaves without a deal, it is likely that businesses exporting to the EU will need to comply with Rules of Origin and prove where the components of their product have come from. 

It is yet to be decided whether goods arriving in the EU from the UK will have preferential origin which is where exporters have to prove that their product was wholly manufactured in the UK and therefore does not require additional tariffs. 

Food and drink labelling

We recently published a blog outlining some of the issues businesses can expect to face when exporting food and drink products to the EU. The EU will require an EU-based address on the product label, whether that is a Food Business Operator (FBO) or their representative (often importers/ distributors). 

We have recommended that businesses talk to their current distributor in the EU to discuss labelling requirements and their obligations. 

The EU also differentiates between requirements on importation of food from animal and non-animal origin. Further information can be found here. 

Our support

Business West is dedicated to offering businesses support throughout this uncertain time. Our new Chamber Customs service will offer you much needed assurance that goods will pass through borders unhindered. Follow this link to find out more and register your interest.

Our team of trade experts has also launched the Trading through Brexit Hub where you can ask questions around the EU transition with information being updated regularly in the resources section.