HMRC’s new powers to tackle electronic sales suppression
The HMRC has issued advice about the new powers and penalties under the Finance Act 2022 to tackle electronic sales...READ MORE
British small and medium-sized enterprises are not adequately prepared for a no-Brexit deal because they do not see it as a sufficiently credible outcome, the government said in an analysis published on Tuesday.
"Despite communications from the government, there is little evidence that businesses are preparing in earnest for a no deal scenario," the UK government revealed.
For example, without an Economic Operator Registration and Identification (EORI) number, businesses would not be able to complete the necessary customs documentation for goods they are importing.
The government explained that as an EORI number registration is one of the most basic and straightforward parts of the process most businesses would need to undertake to prepare for no deal, this is assumed to be a generous indicator of overall readiness.
However, as of February 2019 there had only been around 40,000 registrations for an EORI number, against an estimate of around 240,000 EU-only trading businesses.
"In practice, the UK’s approach is based on, in the short-term, allowing hauliers to pass through the border without stopping, but they would be stopped if taking goods into France without the right paperwork.
"The lack of preparation for EU controls - of which this is an example - greatly increases the probability of disruption," the government disclosed.
In order to mitigate against the lack of business readiness for no deal, the government has announced transitional simplified procedures for EU trade at roll-on roll-off ports, which will make it easier for traders importing from the EU to comply with customs requirements immediately after EU Exit.
HMRC has also published its intention to phase in Entry Summary Declarations for imports from the EU over six months following 29 March 2019, rather than requiring these from day 1 of exit.
The government earlier estimated that, in the event of a no deal scenario, the UK economy will be between 6.3 and 9 per cent smaller than it would have been otherwise in the long term.