A No Deal Brexit for most firms

Most firms that export only to the EU do not have the paperwork they need to carry on their business after a no-deal Brexit, government figures suggest.

The Liberal Democrats said the statistics showed that no deal, which increasingly seems to be the outcome ministers think is most likely, would be a “wholly irresponsible political choice”.

But their analysis was disputed by the government, which claimed that, even though only a minority of firms have already acquired the right documentation, these are the firms responsible for the bulk of exports to the EU.

After the UK leaves the EU, firms that trade with their EU counterparts will need an economic operator registration and identification (EORI) number to comply with customs rules.

Firms that export and import beyond the EU already have an EORI number, but registration has become a pressing issue for the 245,000 who trade internationally only within the EU. A no-deal Brexit would be particularly difficult for them because, instead of having current rules apply during a transition, they could find their trading opportunities shut down after 31 October without an EORI number.
Chuka Umunna, the former Labour MP who is now the Lib Dem Treasury and business spokesman after defecting to the party, said he had obtained figures from the government showing that just 66,000 of these traders had an EORI number. He said that at the current rate of progress it would take until 2021 for all firms to get the paperwork they need.

“These figures reveal that an overwhelming majority of UK exporters to the EU are unprepared for a no-deal Brexit and will not be in a position to deal with the mountain of red tape and bureaucracy it will burden them with on 31 October,” Umunna said.

“Pursuing a no-deal Brexit is a wholly irresponsible political choice of the new administration for which there is no mandate and which will put businesses and jobs at risk.”

HMRC has not challenged the Lib Dem figures, but a source said those firms that had already registered for an EORI number accounted for almost three-quarters of the total volume of trade undertaken by firms that traded solely with the EU.

An HMRC spokesman said it was doing all it could to get firms ready for Brexit and that getting an EORI number was “simple and free” and could be done online.