Food taxes and certificates: UK accounts for Brexit costs

A tangle of post-Brexit paperwork, duties and taxes disrupts trade ties between Britain and the European Union that have often taken years to build, resulting in additional costs for small businesses that can make trade cross-channel not profitable.

The changes since the UK left the single market and the bloc’s customs union on January 1 have made it “commercially and virtually impossible for us to continue shipping to the EU,” laments cheese maker Simon Spurrell.

Owner of Hartington Creamery, which produces flavorful and crunchy Stilton cheese, Spurrell must now include a food health certificate signed by the vet with every order shipped to the OR.

Regardless of the size of the package, a geographically protected slab of the goody or a complete box, the cost of the certificate is the same: £ 180 (204 euros, $ 247).

A huge price to pay for the dairy, which previously relied on EU customers for around a fifth of online sales.

“We may have to exit the EU market entirely until both sides come to their senses,” said Spurrell, who is now considering selling in North America to fill the void.

The food certificate, which also applies to meat and fish products, is not the only bitter financial consequence of Brexit, despite Britain having struck a free trade deal with the EU.

UK customers who buy EU products with a sales price above £ 135 (152 euros, $ 185) in some cases have to pay a so-called import value added tax (VAT) from about 20 percent.

They may also have to pay higher customs duties and courier charges.

The result is that some small EU-based companies have decided to stop selling products to UK buyers.

– “ Reality of Brexit ” –

“It is certainly not a tariff, but it will nonetheless have an implication for UK customers and will make EU products more expensive,” said Gary Rycroft, partner at the law firm Joseph A Jones & Co in Lancaster . North of England.

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“In this sense, it is a protectionist policy because it creates a barrier to trade.

“This is the reality of Brexit,” the consumer legal expert told AFP.

For businesses, there is also the headache of ‘rules of origin’, which results in new taxes on goods exported from the UK that have been made from imported materials.

“We are hearing about a growing number of small exporters grappling with rising courier costs, customs declarations, rules of origin, tariffs and VAT charges,” said Mike Cherry, national president of the British Federation of Small Business lobby group.

Around 20% of small and medium-sized businesses have suspended exports to the EU due to the new rules, a recent study by UK accountants UHY Hacker Young found.

“What we have … seen is that EU customers are desperate to get the products they need from the UK,” said company VAT specialist Michelle Dale.

And “there are still many consignments which do not leave the EU,” he added.

However, Dale expressed his optimism for the future.

“As people get used to the information required and transport companies become more familiar with import declaration and export declaration, things will start to improve.”

jbo-bcp / rl