UK Border Controls set to hit EU trade from New Year

Brexit has added to the difficulties facing British companies in 2021. And 2022 seems unlikely to be better, with the UK about to introduce full Border Controls for EU imports.

Opinion over Brexit has shifted sharply over the past year as the reality of Brexit has become clearer. Fewer than 1 in 5 of those who voted for Brexit now think that it has gone as well as they had expected. And smaller firms exporting to the EU have been hit by a double whammy of increased paperwork and new Customs duties. The Cheshire Cheese Company says it has lost its entire “wholesale and retail business” with the EU27 in 2021, worth £270k. And 2022 is set to see the problems ramping up:

  • New Year’s Day will see the UK finally introduce its Border Controls. These will require full Customs Declarations for imports, and the payment of relevant duties. Unsurprisingly, the Institute of Directors has recently reported that nearly a third of companies are unprepared for the change.
  • Rules of Origin are also set to become a major issue, as the “one year grace period” for dealing with this complex issue also expires. As the Financial Times reports:
    “A shoe shop in Bristol, say, that imports shoes from the EU which came in tariff-free (but actually were imported from Asia and shipped onwards, so didn’t qualify) may find themselves paying a nasty retrospective bill. UK companies that export to the EU will have angry EU customers on their hands if they’re unable to prove their goods qualified for zero-tariff access if challenged by EU customs authorities.”
  • From 22 May, new rules will also come in for the import/export of goods over 2.5 tonnes by van or trailer, which include the need to pay up to £1100 for a goods vehicle operator licence. 
  • And then, of course, there are growing labour shortages in areas such as care homes, hospitality, truck drivers and agriculture, which don’t meet the UK’s new minimum pay levels for work visas.

On the positive side, however, it does seem that Lord Frost’s resignation may lead to a softening of tensions over the N Ireland Protocol. As the UK in a Changing Europe poll shows:

  • A majority of people in N Ireland itself now think the Protocol is a good thing on balance.
  • A majority also think it is having a positive impact on the local economy, which has avoided the shortages seen in Britain.
  • Interestingly, too, the same poll shows 87% of the population distrust the UK government – double the level of distrust for the EU Commission.

Trade data also shows that businesses are proving very flexible in taking advantage of N Ireland’s unique position within both the UK and EU Single Markets.

32 new ferry services have started up between Ireland and other parts of the EU during the year, as companies sought to avoid the Brexit-related increases in paperwork and cost for the traditional routes via Britain. This trade has soared 50% over the past 6 months. As the Belfast Telegraph reports:

“There has been a 15% uplift in traffic in Belfast, 18% in Larne and 20% at Warrenpoint, which have benefited as demand for ferry services to Wales and Liverpool has declined“.

 

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Our consulting team have personal experience of operating before the Single Market and Customs Union began.
We know the issues and can help you solve your problems.

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