British Retail Consortium warns of VAT and red-tape Brexit bombshell for businesses

Responding to yesterday’s release by the government of 24 “technical notices” regarding a no-deal Brexit, the British Retail Consortium warns of "increased delays and red tape at borders, and a VAT bombshell for consumers and businesses".

The BRC chief executive Helen Dickinson said that the notices “demonstrate the facts of a no-deal Brexit".

Head of consumer research at delivery company ParcelHero David Jinks said the first tranche of notices were “reminiscent of government advice to ‘use tables if they are large enough to provide you all with shelter’ in case of a nuclear attack."

The long-time Brexit critic added: “If the Government thought its first batch of 25 documents advising businesses and individuals how to plan for the event of us leaving the EU without a deal would reassure people, they are mistaken.

“Just like with the threat of a nuclear attack, we very much hope that a no-deal Brexit is a worst-case scenario never actually happens.

“Anyone planning to use a parcel courier to ship to the EU in the future must trust that the threat of a hard Brexit never actually comes true – because British exporters know ducking under a table won’t help them survive the extra duties, red tape and delays on their exports to the EU.”

Former trade negotiator to Hong Kong Jason Hunter has "read every word of both the UK ‘technical notices’ and the EU Preparedness notices" and concluded that "Boris Johnson was speaking for the entire Government when he said "f*** business".

Hunter went on: "The complexity that is being forced on importers and exporters in the UK will cost jobs, and if its less than a million jobs lost as a result of Brexit then I’ll be surprised. Take just the 334,000 SMEs that currently export only to the EU, they will require new customs agents to handle all the new paperwork, find out how to then apply for UK EORI number, review all their contracts and International Terms and Conditions of Service reflect that they are now an exporter, consider how they will submit export declarations, whether to engage a customs broker, freight forwarder or logistics provider if they can afford it,

"Or if they want to do this themselves will need to acquire the appropriate software and secure the necessary authorisations from HMRC. All this comes at a cost – whose job will be lost to pay for all this extra work? For every shipment, they’ll now need to submit an export declaration to HMRC using their software or online or get their customs broker, freight forwarder, or logistics provider to do this for them. By the way, The export declaration may need to be lodged in advance so that permission to export is granted before he goods leave the UK. Businesses may also need to apply for an export licence or provide supporting documentation to export specific types of goods. Then prepare to be aware of Regulation (EEC) No 2658/87 on tariff and statistical nomenclature which will push up the price of the product that businesses used to export frictionlessly. 

"Business must also familiarise themselves with Regulation (EU) No 952/2013 and be aware that customs formalities apply, declarations have to be lodged and customs authorities may require cash guarantees or bonds by UK business up front for potential or existing customs debts in the EU. Authorisations granting the status of Authorised Economic Operator (AEO) and other authorisations for customs simplifications issued by the UK will be in-valid after we leave the EU so find out if you will even be able to export at all. Also, bear in mind that goods originating in the United Kingdom that are incorporated in goods exported from the EU to third countries will no longer qualify as "EU content" for the purpose of the EU’s Common Commercial Policy.

"This affects the ability of EU exporters to cumulate with goods originating in the United Kingdom and may affect the applicability of preferential tariffs agreed by the Union with third countries. And also covers the percentage of UK goods for export, need to ensure that the country of origin rules are UK-made. The amount of paperwork required by UK businesses will run into the tens of thousands of pounds a year for each SME and many SMEs don’t have that kind of spare cash – overheads will need to be reduced and you know that means that redundancies will happen… assuming that these businesses can even continue to operate."

He concluded: "Brexit is an economic disaster for the UK and it must be stopped as soon as is physically possible."

Meanwhile, Jacob Rees-Mogg has said there’s nothing to worry about.

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