Early trade difficulties are “just the tip of the iceberg” as businesses adjust to new demands after Brexit, according to a compliance expert.
Hurricane Commerce, which specialises in cross-border e-commerce, said the dawn of the UK’s new relationship with the EU was throwing up a string of issues caused by a lack of complete and valid customs data and VAT now being payable on low value goods into the UK.
It highlighted retailers – on both sides of the channel – ceasing orders as a result of additional red tape and unforeseen charges.
The complexity of the UK’s trade deal with Brussels, struck on Christmas Eve, meant businesses had little time to take in the specifics of the new rules before they were implemented on 1 January.
Hauliers have had particularly hard time of it given COVID-19 restrictions on top of the new era for trade.
Michael Gove, the Cabinet Office minister, warned on Friday of “significant additional disruption” for freight in the days and weeks ahead as the effects of stockpiling before 1 January unwound and trade traffic increased.
Before giving evidence to a committee of MPs on the complications encountered so far, policy director for Logistics UK Elizabeth de Jong told Sky’s Ian King Live that there were “particular challenges” over trade between Great Britain and Northern Ireland that needed “urgent” attention before freight volumes increase.
She explained how border-like administration – demanded by the EU to avoid the return of a hard border with EU member Ireland – is required.
She told the programme: “Earlier this week there was about 25% of lorries arriving at Holyhead… which didn’t have the correct documentation.”
Ms de Jong called for additional government help for hauliers and ferry operators to navigate and simplify the paperwork and for further mitigation to ease trade flows.
She also said that supermarkets in Northern Ireland were sourcing some products from the Republic to get around early logistical difficulties.
Online supermarket Ocado has blamed a weekend warning relating to the availability of some products on pandemic-related staff absences in its supply chain rather than Brexit.
Martin Palmer, Hurricane’s chief content and compliance officer, said: “Online merchants and marketplaces, postal operators and carriers are starting to see the reality of Brexit and the ending of VAT exemption on low value goods by the UK government.
“With the EU also removing the low value VAT threshold in July, the compliance pressures on all parts of the cross-border supply chain are set to intensify even further with similar issues to be experienced in all EU countries to those current being experienced in the UK.
“The first week and a half since Brexit is just the tip of the iceberg.”
A string of British retailers, including M&S, have also complained of potential tariffs for re-exporting goods to the EU under so-called rules of origin.
Hurricane described those requirements as particularly “complex” given that they applied to parts of goods and not just finished products.
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