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22 April 2021

In the final part of her blog, Andrea Collins predicts how the situation in Europe will improve and details how Leicestershire’s businesses can get support right now to negotiate their way to continuing trade with Europe. 

During the programme of sessions we’ve been providing for clients of the Growth Hub, we’ve seen that smaller businesses, particularly in the ecommerce side of things, are switching off EU shipping until the new cross-border e-commerce VAT scheme is launched in July. B2B suppliers with long-standing relationships, suppliers, and customers in the EU, are determined to ride out the storm. I think those relationships will endure and both sides will settle into a rhythm. It’s the B2C side of things that’s suffering at the moment.

We’ll see shipping costs – which have been high due to Covid as well as Brexit – reduce. Some of the agents are making hay while the sun shines and charging astronomical fees for making declarations. That can’t continue. We’ve also got a shortage of agents as they grapple with the increased demand for their services.

For Leicestershire businesses that want to continue European trade, there are mechanisms that we can help them to use. For importers, there are a number of facilitations and special customs procedures available that can help suspend both duty and VAT so that they can continue trading with less friction. There are lots of different easements and mechanisms that companies just won’t be aware of as they’ve not had to explore or consider them before. We can go through all of those with them. Fore exporters, we can talk about whether they’re impacted by leaving the EU VAT regime; how they can continue to supply the EU and how that will change in July when this new VAT regime comes into play.

And we can go through all the documentation that’s required to accompany goods irrespective of what those goods are. We can do a deep dive on product origin because it’s not just a case of saying ‘I buy all my goods in the UK so they must be of UK origin’. Source can be different from origin and some of those goods may well have been imported originally. It’s vital to establish what the origins of your goods are because at any time, under the UK-EU Trade and Cooperation Agreement, local customs in the EU or HMRC in the UK can ask you the exporter for that proof of origin i.e. bill of materials, etc.

We’ll also talk about the need to be more robust in terms of our record keeping because we’re exporting to and importing from the EU for real now. Especially on the importing side of things, where we are now generating duty and VAT revenue for HMRC, they expect a level of record keeping and can go back as far as five or six years to determine if you’ve paid the right amount of duty and VAT. Companies aren’t used to being that compliant when they’ve exclusively traded within the EU.

I do believe it will be worth it in the long run. We’ll see a change to people’s supply chains with UK companies sourcing more domestically and EU companies doing the same to overcome some trading barriers and eradicate some of that friction and cost. But we won’t see a divorce of our supply chain.

Growth Hubs typically attract smaller businesses but with EU transition and EU exit we’ve seen some really quite big ones come through. Several large companies have said to us ‘we think we’ve got it sorted’ but within about 10 minutes of talking to them we’ve found gaps and vulnerabilities that need to be addressed. Talking to us has saved companies a lot of pain, even when they thought they were well-prepared. Even with bigger companies, they don’t know what they don’t know. It’s an unfolding story that changes daily and nobody can know what the full ramifications of that trade agreement are – unless like us you’re following it every day.

Read Part 1.
Read Part 2.

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For more EU support information from the Growth Hub, visit