Seven years after the referendum, Brexit continues to create challenges throughout the UK, mainly with small and medium-sized enterprises (SMEs). Whilst new opportunities were anticipated, the Federation of Small Businesses has revealed that SMEs are facing various hurdles, including:
• Increased barriers to trade both to and from the European Union (EU)
• Administrative complexity when exporting goods
• The strain placed on SME finances and cashflow
Increased trade barriers
Despite promises of simplified trading, without specialist resources, many UK SMEs struggle to navigate more complex custom procedures. This is resulting in an increased number of costs and delays. This challenging trading environment with the EU has meant that the British economy is estimated to lose over £100 billion annually.
Historically, SMEs have relied on the import of goods and components from the EU. Many have found that post-Brexit the increased bureaucracy, paperwork and border checks have contributed to delivery delays and other uncertainties, disrupting their supply chains and impacting their ability to meet consumer demands and expectations.
Export Challenges
Brexit stopped the free movement of goods and services between the UK and the EU, and the introduction of non-tariff barriers such as regulatory compliance and certification requirements have hampered the ability of SMEs to reach European consumers.
In a recent article by The Loadstar, one SME owner explained some of the operating challenges they are now facing:
“VAT charges at point of entry to the EU have crippled small businesses like mine. Our prices have doubled. I know a lot of people who just gave up selling abroad. I’ve had to discount on postage just to try and keep an EU customer base.”
• More than 25% of SMEs were not ready for the changes in customs and border checks
• A survey revealed that 38% of SMEs believe their EU exports will continue to decrease within the next 12 months
Financial Strain
Additional administration and compliance costs associated with post-Brexit trade have stretched the resources of UK SMEs. Many lack the necessary infrastructure and expertise to handle the increased paperwork, leading to additional expenses and reduced profitability.
Working with our customers to help mitigate these challenges, Evolution Time Critical has emerged as a valuable partner for SMEs. By providing a specialist skill set in tailored and time-sensitive logistics, we have helped SMEs navigate complex customs procedures, mitigate delays, and minimise disruption in their supply chains. Our sector experts ensure they are up to date with the latest regulatory changes in customs requirements, including introducing new import control systems, helping businesses avoid costly mistakes such as demurrage fees or fines for non-compliance and streamlining import and export processes.
Commenting on the challenges faced by SMEs operating between the UK and EU, Peter Hewett, Customs Clearance Manager at Evolution Time Critical said; “Although Brexit allows free trade to and from the EU, this is very different from the free movement that was in place previously. There is now an administrative burden, and therefore an extra cost, placed on business, to effectively apply for free trade for every shipment in the form of a customs declaration.”
He continued; “Hurdles such as tariff classification, rules of origin, and Inco terms are all factors to be considered before a customs declaration can be made. SMEs need expert knowledge, access to customs systems, and specialist software, which is why many SMEs now rely on brokers to ensure they can maintain their profitability and navigate the minefield of regulations.”
Evolution Time Critical has over 20 years of experience working with customers of all sizes. Our specialist UK/EU team are on hand 24/7 to support customers and ensure that their products get to the right place on time, every time. If you would like to find out more about how the team can help you contact us on +44 (0)1332 814914 or through our website https://www.evolution-timecritical.com/contact
