Small British businesses have stopped selling to Northern Ireland as well as Europe due to extra administrative hurdles posed by new EU customs rules coming into effect.
Many small firms said they are unable to meet new requirements for paperwork and numbering of each product as well as the need to have an “authorised representative” in the EU or Northern Ireland.
A conviction and the penalty of fines mean business owners without the resources to get legal advice are not risking getting something wrong, instead simply halting Northern Ireland and EU exports, one businesswoman told Sky News.
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The result is legislation meant to improve product safety and protect online shoppers – the General Product Safety Regulation (GPSR) – is ending British deliveries to some shoppers in Northern Ireland and the EU.
Firms have already pulled the deliveries though the new laws don’t come into force until Friday 13 December.
Despite not being a member of the EU since January 2020 Northern Ireland is subject to EU rules by being part of the single market, the tariff-free bloc of European states. The arrangement was designed to prevent a hard EU/UK border on the island of Ireland.
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While some businesses made a difficult decision to end shipping to Northern Ireland and Europe, others said their hands were tied.
Owner of Weirdstock bedding company Johanna Haughey-Lewis, herself from Northern Ireland, said she is upset about it but added: “I don’t feel like I had a decision. You get fines if you don’t comply with this… I just don’t have the resources to comply, at least not at this stage.”
Short notice and limited information
The issue has been made more uncertain, confusing and harder for three business owners Sky News spoke to as they only heard of the customs changes in the past few days or weeks from fellow business owners on social media. Getting clear, relevant and sufficiently detailed information hasn’t been straightforward
“It’s come out of nowhere,” Ms Haughey-Lewis said. “Everyone is scrambling, even people who we kind of expect to have the answers.”
While the government does have a webpage on GPSR, some would have liked more information and to be contacted directly about the changes, rather than receive information from social media contacts.
Kathryn Hunt, owner of home decor business Kath & Kin, thinks clearer guidance through training, workshops or perhaps allowing firms to self-certify for some items could help.
Pic: Bella Longman/The Daydreamer London.
Seeing as the government has a list of UK businesses via Companies House, Bella Longman who owns the handmade clothing business The Daydreamer London, pointed out she could have been contacted via email like she receives tax returns reminders.
“When we do our taxes, I have to say how much of my income came from the EU, it feels crazy that [the government] couldn’t get a list together and just send an email, like, ‘did you know this legislation is coming in? If you want to know more click here’, because they send emails being like, ‘you must do a tax return’,” she said.
The timing issue
But the timing was always going to be tricky with the announcement coming during the busy Christmas season.
Most businesses make enough money in November and December to see them through January and February, Ms Longman said, meaning distractions during those months can cost firms.
Pic: Weirdstock
“It is just a very precious time of year and having extra regulation now… I can’t do this right now,” she said.
Too onerous regardless
Some small businesses, however, could arguably never comply with the rules as they currently stand, even with a longer lead time.
Businesses that sell hundreds of items from different suppliers, like Kath & Kin, realised it’s just not possible despite extensively looking for solutions, Ms Hunt said.
Items have to have a batch or serial number and clear instructions and safety information “in a language which can be easily understood by consumers”, the GPSR said.
Pic: Kathryn Hall/Kath & Kin
This has led British makers to fear having to translate documents into other languages, despite the requirement not applying when it can be used “safely and as intended by the manufacturer” without instructions and safety info.
Exporters are also required to have a record of where goods come from.
Unknown scale
Business owners may not yet know the difficulties these new rules will pose to their operations.
Watch dealer and component seller Darren Townend said his businesses Forstner Bands and Vintage Speedmaster may only discover a difficulty if a product gets held up by customs, potentially for months on end.
What the economic impact of the export halting will be is not yet known.
There will be “a real barrier to international trade“, the Federation of Small Businesses (FSB) said, but they don’t have a way to quantify who’s impacted most.
Pic: Weirdstock
A Department for Business and Trade spokesperson said: “Small businesses are the backbone of our economy, and are therefore front and centre of this government’s growth mission. We have also been clear that we want to reset our relationship with the EU to make it easier for businesses to trade with Europe.
“We are supporting SMEs across the whole of the UK to get ready for GPSR and will be publishing more guidance shortly. We will keep this under review and continue to engage businesses to ensure they are supported to trade freely.”
When asked if it had an estimated trade impact it did not provide one.
An extra pressure
The obligations come at a time when small businesses already are feeling the squeeze from cost of living pressures and previous Brexit trading changes.
They feel like they’re being hit harder than medium or large-sized operations that can hire a solicitor to give advice, or possibly absorb extra costs.
Pic: Bella Longman/The Daydreamer London.
“My concern is if you’ve got the infrastructure and you’ve got the money to spend on it, and you know how to go about all of this, then you can get through that,” Ms Hunt said.
“So these big businesses are going to thrive, while the smaller businesses that take care, that take pride in their work, that love what they do, really, really care about their customers, it’s those that are suffering.”
Time taken to understand trade updates is time not spent earning.
“Any time I’m not working on my business, I’m not earning money,” Ms Longman said.
“How do I take a week or two out of my business just to do this compliance and not take a huge financial hit?”