Many businesses that export only to the EU do not have the necessary papers to continue trading after a no-deal Brexit, reports have shown.
According to the Liberal Democrats, statistics showed that no deal would be a “wholly irresponsible political choice,” but the government said that despite only a small number acquired the necessary documentation, these were nonetheless “the firms responsible for the bulk of exports to the EU.”
Once the UK crashes out of the EU, UK firms would require an Economic Operator Registration and Identification (EORI) number to be able to comply with economic operators and customs authorities.
What is an EORI number?
EORI stands for “Economic Operators Registration and Identification number” and can be used by both business and individuals when trading. The EORI number acts as an identification number in all customs procedures making processes efficient, not only for customs authorities, but also for statistical and security purposes.
The EORI number is made up of two parts. One includes the country code of the issuing Member State and the other a code or number that is unique in the Member State.
According to the European commission, a legal entity such as a company or a natural person can request an EORI. More particularly, “persons established in the customs territory of the Union should request the assignment of the EORI number to the customs authorities of the EU country in which they are established.” Also, “persons not established in the customs territory of the Community should request the assignment of the EORI number to the customs authorities of the EU country responsible for the place where they first lodge a declaration or apply for a decision.”
Exports and imports
If you are a firm that exports and imports outside the EU, you will have an EORI number, but as The Guardian notes, “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.”
In another article by the Business Insider titled “Just 3 in 10 British firms that export to the EU are prepared for a no-deal Brexit,” it is said that only a 27% of British businesses have secured an EORI number and that there is a growing concern that British businesses will not be prepared for a no-deal exit on 31 October.
Lib Dem MP Chuka Umunna obtained information from the Treasury that shows that many firms are simply unprepared for a no-deal Brexit. The figures also show that if exporters apply for an EORI number at the current rate, all businesses won’t be registered until maybe the start of 2021. Umunna said that the statistics show “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.”
He added: “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. Any form of Brexit will harm the economy and put obstacles in front of UK firms which is why Liberal Democrats not only want a final say for the people on any deal but are also the only party that can get into Government which is committed to stopping Brexit altogether.”
British small businesses are not prepared for a no-deal Brexit in October, and, as the Business Insider pointed out, are even less prepared than they were back in March. On the other hand, businesses that already spent millions of pounds for a no-deal Brexit in the spring are now less motivated to spend more money in case there are further delays, while others just simply cannot afford it.
Chancellor Sajid Javid’s announcement last week for additional no-deal Brexit funding is not especially encouraging as most of it will be used towards government competencies, and not really towards helping businesses prepare.
A spokesperson for the HMRC – the department responsible for issuing EORI numbers – said it was doing “everything we can to help businesses get ready for the UK leaving the EU. Businesses who import or export goods need to take action, the first step of which is obtaining an EORI number (if they don’t already have one.) It’s simple and free and can be done online.”
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