Brexit impacts businesses: increased red tape, higher costs, and supply chain shifts - 8 years after the vote. Read business examples and assess their impact.
Introduction
Eight years have elapsed since the UK's decision to exit the European Union on 23 June 2016. The pledges of decreased red tape and enhanced autonomy were pivotal aspects of Brexit's appeal. Nevertheless, numerous businesses have encountered a starkly contrasting reality. The Observer interviewed six companies spanning different industries to delve into the persisting obstacles they confront and to consider the potential assistance that a service such as Customs Manager Ltd could offer in surmounting these challenges. The Guardian has surveyed many businesses. We summarise and provide lessons to draw and explain how we can help.
Increased Bureaucracy for Exporters
Royal Lemkes: Plant Exporters from the Netherlands
Maurits Philippo, a business unit manager at Royal Lemkes, discusses the significant transformations that his company has undergone. Royal Lemkes, a Dutch plant exporter, serves key UK retailers such as Ikea and B&Q. The impact of Brexit has led to the implementation of almost 50 new procedures in their export operations, including customs declarations and plant health certificates. In response to this increased workload, the company had to update its IT systems and recruit additional personnel. Furthermore, they established a distribution centre in East Yorkshire to alleviate some of these difficulties. Despite these measures, the company still faces operational challenges due to the added expenses and delays.
Lesson to Draw: The complexity and additional costs of post-Brexit trade can significantly disrupt operations, requiring substantial adjustments and investments.
How Customs Manager Ltd Can Help: Customs Manager Ltd can streamline the customs declaration process, obtain necessary certificates, and provide ongoing support to ensure compliance with new regulations. This reduces the administrative burden and helps companies like Royal Lemkes manage costs more effectively.
Legal Complexities Boost Business for Law Firms
MDDP: Legal Firm in Poland
For some, like the Warsaw-based law firm MDDP, Brexit has meant more business. Agnieszka Kisielewska, a partner at the firm, notes a significant increase in demand for their services. Polish trade with the UK has surged, necessitating advice on customs, excise duties, and VAT regulations. MDDP has expanded its team to cope with the influx of clients seeking guidance on setting up warehouses in the UK to maintain smooth operations post-Brexit.
Lesson to Draw: Navigating the new trade landscape post-Brexit requires specialized knowledge, making professional advice crucial for businesses looking to adapt.
How Customs Manager Ltd Can Help: Customs Manager Ltd offers expert guidance on customs regulations, trade compliance, and VAT issues. Their tailored advice can help firms like those working with MDDP navigate the complexities of post-Brexit trade more efficiently.
Brexit's Toll on Small Businesses
Wack’s Wicked Plants: Carnivorous Plant Traders in Yorkshire
Peter and Helleentje Walker, the owners of Wack’s Wicked Plants, have seen their business suffer. New rules have made it prohibitively expensive to export their plants, leading them to cease all EU exports. Furthermore, importing young plants from Europe, essential for their business, now involves costly and time-consuming permits. These bureaucratic hurdles culminated in their withdrawal from the Chelsea Flower Show, marking a significant setback.
Lesson to Draw: Small businesses are particularly vulnerable to increased regulatory burdens, which can stifle growth and expansion opportunities.
How Customs Manager Ltd Can Help: Customs Manager Ltd can assist small businesses like Wack’s Wicked Plants by handling regulatory paperwork, securing necessary permits, and providing strategies to minimize compliance costs, allowing them to focus on core business activities.
Northern Ireland’s Mixed Blessing
Denroy: Manufacturer in Northern Ireland
Denroy, a manufacturer in Northern Ireland, finds itself in a unique position due to the Northern Ireland protocol. CEO Kevin McNamee explains that while they benefit from free access to the EU and Great Britain, the complexities of Brexit have led them to reassess their supply chains. Tariffs on goods sourced from outside the EU and UK have forced them to shift suppliers from Great Britain to the EU to avoid additional costs.
Lesson to Draw: While certain regions may have strategic advantages post-Brexit, businesses must still navigate complex supply chain and tariff issues.
How Customs Manager Ltd Can Help: Customs Manager Ltd can help companies like Denroy optimise their supply chains and manage tariffs by providing insights into regulatory changes and offering solutions to maintain competitive advantages while ensuring compliance with EU and UK regulations.
Wine Industry: Costs and Savings
Kingsland Drinks: Wine Bottler in Greater Manchester
Kingsland Drinks has experienced both the benefits and drawbacks of Brexit. Eliminating EU customs duties on wine from Australia and New Zealand has resulted in significant savings. However, these savings are offsets by increased excise duties on wine, which have risen substantially. Managing Director Ed Baker points out that while some costs have decreased, others have risen, ultimately affecting the end consumers.
Lesson to Draw: The benefits of new trade deals can be offset by increased domestic duties, necessitating a balanced approach to cost management.
How Customs Manager Ltd Can Help: Customs Manager Ltd can help businesses like Kingsland Drinks navigate new trade agreements, maximise benefits from tariff eliminations, and strategise around domestic duties to maintain profitability.
Challenges for Musical Instrument Traders
Amber Violins: Musical Instrument Trader in Gloucestershire
Matthew Gryspeerdt, owner of Amber Violins, has seen his business model disrupted. Pre-Brexit, he could easily import and sell second-hand instruments from the EU. Now, total VAT charges on imports have eroded his profit margins, forcing him to scale back operations significantly. The increased bureaucracy has made it infeasible for him to continue his previous business practices.
Lesson to Draw: Changes in VAT and import regulations can significantly impact niche markets, necessitating strategic adjustments to business models.
How Customs Manager Ltd Can Help: Customs Manager Ltd can assist niche businesses like Amber Violins by providing detailed guidance on VAT and import regulations, helping them to restructure their operations to minimise negative impacts and continue serving their markets effectively.
Conclusion
Brexit’s promise of reducing red tape has not materialised for many businesses. From increased costs and bureaucratic hurdles to shifting supply chains, companies still grapple with the consequences of the UK’s departure from the EU. As these stories illustrate, the impacts are wide-ranging and continue to evolve, painting a complex picture of post-Brexit business in the UK and beyond.
Customs Manager Ltd can be an invaluable partner in navigating these challenges, offering expert advice and solutions to help businesses adapt and thrive in the post-Brexit landscape.
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About Customs Manager Ltd.
We aim to empower people with import, export, and transport responsibilities with helpful advice, insightful training and relevant trade intelligence services. We devote all our passion and energy to helping businesses grow faster cross-border. Working with us means having your own multilingual Customs Manager on standby to help you trade effectively, efficiently and, of course, compliantly wherever you want to go. Includes Brexit support and the ability to lodge customs declarations + Rules of Origin
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