Challenges for UK SMEs in the Post-Brexit Trade Environment

New Legislation and Checks for Importing Goods into the UK

The recent implementation of the Border Target Operating Model (BTOM) has introduced significant changes to how goods are imported from the EU to the UK. These changes include:

Enhanced Checks and Certifications: All imports, particularly perishable items like food and plants, now require rigorous health certificates and must undergo detailed safety checks.

Logistical Delays: The need for pre-notification of shipments 24 hours in advance and the commencement of physical checks have introduced delays that are especially problematic for perishable goods.

Increased Costs and Inflationary Impact: The operational costs for businesses have increased due to the new administrative requirements. These costs are contributing to the overall inflation, further complicating the economic landscape.

This new regulatory framework has increased the complexity and cost of importing goods from the EU, affecting supply chains and market stability.

Challenges for UK SMEs Exporting to Europe

Post-Brexit trading conditions have imposed severe challenges on UK SMEs exporting to the EU, including:

Increased Red Tape and Costs:New tariffs and customs procedures have significantly raised the operational costs for UK SMEs, impacting their competitiveness in the EU market.

Closure of SMEs: The additional financial and administrative burdens have led to the closure of numerous SMEs that found the new export requirements unsustainable.

Difficulties with Groupage Shipments: Changes in the handling of pallet shipments and groupage have severely impacted the ability to send mixed consignments. Traditional networks that facilitated the sending of single pallets containing plant or animal goods are no longer viable. Logistics companies are now hesitant to handle groupage shipments that require multiple veterinary certificates, due to the risk of delays and rejections at Border Control Posts (BCPs) caused by paperwork issues.

Inconsistent Border Controls: Another major issue has been the differing interpretations by BCPs regarding the completion of health certificates and additional paperwork like CN 26 forms. This inconsistency leads to delays and, in some cases, the return of goods if the documentation is not accepted. This not only delays specific shipments but can also delay entire containers, affecting all goods therein, not just those with questioned paperwork.

Hardline Brexit V's common sense

The cumulative impact of these challenges continues to reshape the landscape of UK-EU trade, with long-term implications for small and medium-sized enterprises across the UK. As the UK navigates its post-Brexit landscape, the challenges facing SMEs due to the new border regime highlight significant areas of concern. The introduction of the Border Target Operating Model (BTOM) and subsequent regulations have increased costs, administrative burdens, and logistical hurdles, particularly impacting SMEs that trade with the EU. The variability in how Border Control Posts interpret and enforce new health certificate requirements has added to the uncertainty and complexity of exporting to Europe. The situation is further complicated by political figures such as Jacob Rees-Mogg, whose positions often do not align with the practical realities faced by SMEs. The insistence on maintaining a hard-line Brexit approach without considering the nuanced impacts on small businesses highlights a disconnect between government rhetoric and the operational challenges these businesses face. This disconnect suggests that without a willingness from certain government quarters to genuinely engage with and listen to SMEs, there is little hope for a meaningful review or adjustment of the current trading terms.

A common-sense solution, as many business leaders and trade organizations suggest, would involve moving towards a customs union with the EU or at least establishing a common veterinary agreement. Such measures would ease the movement of animal and plant products across borders and reduce the need for the onerous and often duplicative paperwork currently required. Pre-Brexit, the free movement of these goods was effectively managed without these burdens, indicating that a return to a more integrated approach could be beneficial. This would not only alleviate some of the direct costs imposed on SMEs but also simplify the bureaucratic processes that currently throttle the efficiency of trade between the UK and its largest trading partner, the EU.