The British government plans to automatically enrol companies for extra customs documentation in a bid to address a huge gap in the number of exporters with the correct paperwork in the event of a no-deal Brexit
HM Revenue & Customs, along with the Treasury, will begin automatically allocating Economic Operator Registration and Identification (EORI) numbers to over 88,000 VAT-registered companies over the next two weeks. These unique identifiers are needed to track companies trading with the EU and collect the duties.
So far 72,000 companies have already registered for EORI numbers, but the government is speeding up the rollout following concerns that businesses were not taking the necessary actions to prepare for no deal. Non-VAT registered businesses will still have to apply manually.
Earlier this month, internal Treasury data obtained by the Liberal Democrats revealed that only 27 per cent of businesses that trade solely with other EU member states had obtained an EORI number. HMRC figures suggest a total of 245,000 UK businesses would need one in the event the UK leaves the EU without a deal.
Government sources accused Philip Hammond, the former chancellor, of blocking the automatic rollout of EORI numbers while he was at the Treasury. Allies of Mr Hammond said he was advised by HMRC it could be counterproductive as it would not necessarily ensure businesses are engaged with processes for a no deal exit.
Sajid Javid, the chancellor, earlier this month ordered the Treasury to step up preparations in response to concerns that tens of thousands of small and medium-sized enterprises are unprepared for the introduction of tariffs and other customs checks if the EU imposes new controls after a disorderly exit by Britain. UK trade with the EU is currently free of tariffs, quotas and associated paperwork.
Mr Javid said it was only “right” to ensure businesses were ready as the government stepped up its own preparations for the UK’s departure on October 31. “There can be no time for delay which is why HMRC has allocated thousands of businesses with a trading number to ensure they can continue to trade their goods through Europe from day one,” he said.
The Federation of Small Businesses welcomed the announcement, saying it was vital to assist smaller traders who would be “the first ones off the cliff” if the UK leaves the EU with no deal. “These businesses are the ones that need to prepare the most, so it is welcome to see the Government has listened to us and is taking concrete action,” said FSB chairman Mike Cherry.
“Focus must now move on to what other support government can offer to small businesses including those small businesses exclusively trading with the EU that are below the VAT register.”
Mr Cherry called on the government to prepare for an emergency Budget ahead of a potential no deal to “boost cash flow and help small business prepare and adapt to any new trading circumstances”.
Separately, the government also announced it was releasing £9m to councils and local authorities in areas of the country with ports and airports to ensure they had enough staff and access to expertise to deal with any disruption from a no-deal Brexit.
The funds are part of the £2.1bn in extra funding announced by Mr Javid to prepare the country for a no-deal Brexit.
