How New Brexit Import Charges Impact Small UK Businesses

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1 May 2024 – The new Brexit import charges are now official. Despite a delay (five times, in fact), agricultural imports worth £21bn will be subjected to a much more stringent importation procedure.

This will include physical checks, health certificates, and identification for 3% of all UK imports. Adopting the new measures could cost importers £2bn. Experts say it has the potential to drive up inflation by +0.15pp.

What are the new Brexit import charges?

The new charges result from a much more comprehensive biosecurity model. As mentioned, trade checks will be based on the product’s risk level. 

High-risk goods, including live animals, bees, and hatching eggs, will be subjected to routine identity and physical checks for pests and diseases. 

Medium-risk commodities, which encompass milk, meat, and eggs for consumption, will require checks at a rate between 1% and 30%. 

Low-risk goods such as honey and canned pet food will not be inspected. 

You can access the complete list of commodities categorised under each risk level for more information.

The inspection charges can vary depending on the product’s associated risk level.

Medium and high-risk products are charged £29. Meanwhile, low-risk animal products have a common user charge of £10. 

As a clarification, importers will be charged a maximum of five commodity lines within a single common health entry document (CHED). Medium and high-risk CHEDs are also capped at £145, while low-risk products are capped at  £50.

In the event of mixed risk level commodities in each CHED, the rate would depend on the highest risk category present. For example, a combination of six low and medium-risk commodity lines would cost an importer the capped rate of £145 in one CHED.

In addition, importers may have to pay additional fees for non-compliance. You can access the official document outlining when and how the charges apply for a more in-depth breakdown. 

Why are there new import fees?

When the UK left the EU, new trade rules were introduced. These included stricter regulations for goods travelling to and from the British Isles. 

The government defended the updated biosecurity checks despite concerns from business owners. The new system is intended to protect the country’s food supply chain in the event of a disease outbreak. 

The cost of checks is negligible compared to the impact of a major disease outbreak, such as Foot and Mouth disease in 2001 which cost businesses and our wider economy more than £12.8 billion in 2022 prices.

Government Spokesperson

Impact of new import charges on small businesses?

The ones that will be hit the hardest by the new import charges will be SMEs. 

At a glance, the maximum fee of £145 per consignment might not seem like much. However, the common user charge can add up when a business imports various products.

Case in point, food retailers will be disproportionately affected by the new trade checks. 

An extra fee will surely reduce margins further for an already struggling SME population. In other words, small and medium-sized businesses will have no choice but to raise prices. 

This leads us to our next point: Food prices will increase. 

Britain already imports 22% of beef, 21% of sheep meat, and 49% of pork supplies. With new charges in the picture, struggling businesses could cope by passing expenses to buyers. This will limit choices for consumers who are already grappling with food price inflation.

Ultimately, the new Brexit import fees could leave small businesses with only four options: shoulder new expenses, pass on costs to customers, choose new local suppliers, or close up shop. 

Our Opinion

When the Leave Campaign talked about ending red tape and giving UK businesses more trade opportunities, I bet this isn’t what many businesses expected.

Rather than reducing red tape, since the UK’s exit from the EU importing to and exporting from the bloc has become more complex, time-consuming and expensive. And the newest import fees are just a further addition.

These new Brexit import charges have already been postponed five times. But now small UK businesses have to face the additional costs and potential delays and supply issues.

Small businesses must feel like this government is out to get them. And who can blame them? The recent years have been challenging to say the least and the support given was minimal compared to the problems they faced.

Many businesses will have to make a decision now. Do they try and absorb the costs, which isn’t an option for some who are already struggling to make ends meet? Increasing prices could put off their customers, who are still having to deal with high prices.

One appealing option could be to switch to local suppliers instead, where possible. So much for Brexit bringing new opportunities, right? Or they give up.

Given the resilience of our small businesses, most will do all they can to make it work. And this is the government’s saving grace. Because without our small and medium-sized businesses our economy won’t grow.

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The Business4Beginners news team consists of several writers who each have their own unique experience in businesses. By keeping their fingers on the pulse, they bring you the latest in news and trends impacting small UK businesses.
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