Where might hidden Brexit costs arise?
From additional paperwork through to new legal requirements and supply chain risks, the impact of Brexit on UK business is wide-ranging, and can impact revenue in many ways. In this article, we will discuss the various hidden costs of Brexit, and how small businesses can plan ahead to minimise their impact.
Understanding and implementing the new Brexit rules is consuming valuable time for small business owners. In the latest episode of our podcast Business Class: Money Minutes, Trade Strategy and Brexit Leader at EY, Sally Jones, describes how paperwork that previously took just 30 minutes to complete can now take as long as 7 hours. And while part of that is due to ‘teething problems’ as companies familiarise themselves with the new formalities, it’s unlikely to ever get back down to the 30 minutes they have been used to.
“The single biggest headache we’re incurring at the moment is border control, with the required paperwork causing long delays and pushing transport prices up,” says Mark Craven, Commercial Director of Forrest Fresh Foods. “We used to send trucks from the UK to the Netherlands for around £300 per backload and that has gone up into the region of £1,500.”
Business owners need to consider whether they have the people, time and knowledge to complete Brexit formalities correctly, says Jones. She suggests several resources that can help, including the Government’s SME Brexit Support Fund which provides grants of up to £2,000 to help companies train staff and the Government’s own website that provides useful resources such as contract terms that you can simply cut and paste into your own contract.
In addition to increased paperwork and time spent navigating the new regulations, other discrete costs that are surfacing include a new requirement for exporters to use heat-treated wooden pallets when sending goods to the EU, which are more expensive and in greater demand. Then there’s legal considerations, such as changes to intellectual property laws and additional shipping costs, taxes and licenses. Without rigorous research, planning and forecasting, these subtle costs can quickly escalate.
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