lorries queue traffic

Britain’s small businesses started to “feel the pinch” by the end of January, a month after the start of post-Brexit controls on goods sourced from the EU, a survey of importers has suggested.

Although the overall changes at the border “have not been as chaotic as expected”, some 58% of companies that imported from the EU this year said they had “found the new customs controls challenging”, according to research by the Institute of Directors (IOD), which canvassed over 200 British businesses.

The difficulties were likely greater among food importers, according to Emma Rowland, policy advisor to the IOD, as “controls relating to SPS [sanitary and phytosanitary] goods” are likely “to impact food/drink/farming sectors much more than others”.

The UK sources around a quarter of its food from the EU, though Ireland, the third-biggest supplier in the bloc after the Netherlands and France, was given a temporary exemption from the new British controls.

Smaller businesses across all sectors found the new regime to be harder going, with 67% choosing the survey options of “very challenging” or “quite challenging”. Many “do not have the capacity that larger businesses do to shoulder this burden, both in terms of time and resources”, said Rowland.

Only 7% of big businesses asked said they found the new system to be “very challenging”, according to the survey. Bigger food businesses, according to previous reporting by The Grocer, were more likely to have the money and administrative staff needed to manage the extra costs and paperwork incurred by Brexit. Established large-scale importers were deemed more likely to already source from further afield and from countries already subject to British customs checks.

Another headache for by importers, big or small, was how the checks had affected trade partners in Europe.

Rowland said the IOD had “heard anecdotal stories of EU companies pulling out of trading with the UK”, with some citing new hurdles such as “hauliers having to deal with additional declarations, digital customs systems, and less accessible guidance from EU governments on the new requirements for exporting to the UK”.

It comes as HMRC last month wrote to 13,000 hauliers across the EU to remind them about requirements relating to the government’s goods vehicle management system (GVMS), an online portal aimed at speeding up trade. 

“Since it is a new system, and we are only one month in, we think we may be able to put these issues down to teething problems,” Rowland said of the GVMS.

The system has also been linked to intermittent delays to outbound goods, with long lines of trucks seen outside the Port of Dover last month as trade picked up after a post-Christmas lull. Some British milk and fish consignments bound for the EU have been separately held up by new European Commission animal health rules in place since the middle of January.

British border controls on EU imports, which started on 1 January and partly reciprocate EU checks on British goods that have been in place since last year, are to be mostly administrative and paperwork-based until July, when some physical checks will start.

So far, according to Rowland, the overall challenges had been “mainly due to added administration and paperwork, which in many cases means taking on extra costs”.

Ahead of the more far-reaching checks due to start in July, the government “must ramp up awareness and resources for SMEs learning from the difficulties many companies have experienced in the last month”, Rowland said.